Talk of The Villages Florida

Talk of The Villages Florida (https://www.talkofthevillages.com/forums/)

- The Villages, Florida, General Discussion (https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/)

- - Bond Payoff (https://www.talkofthevillages.com/forums/villages-florida-general-discussion-73/bond-payoff-233470/)

Quote:

Originally Posted by rustyp (Post 1371982)

///

This is simple also - you just described the case in which one can not afford to pay off the bond.

'Afford' doesn't necessarily have anything to do with it.

Under your logic and implication that some people can afford to pay off the bond and others can't, also means that same person who can 'afford' to pay off the bond...can also easily afford to pay the interest on it too.

Leaving them with more cash on hand.

What some people seem to be forgetting, is that you're not 30 years old anymore...and planning for your retirement.

How you manage your money at this stage in life, is a whole lot different than when you are planning...to get to this stage of life.

If people do some research, they will see that two of the biggest things affecting retirees...is living longer than expected and expenses not being reduced as much as expected.

Once again though...everyone has to make their own choice.

Quote:

Originally Posted by golfing eagles (Post 1371979)

:agree::agree: I agree. Now I'm REALLY starting to get scared:1rotfl::1rotfl::1rotfl:

3.5:1.5 :1rotfl:

:D

Quote:

Originally Posted by ColdNoMore (Post 1372013)

3.5:1.5 :1rotfl:

:D

isn't that 4.5:0.5?????:1rotfl::1rotfl::1rotfl:

Quote:

How you pay for your home is a very personal decision and paying in all cash will likely work for some people but not for others. This generally makes sense if the home’s price does not subtract a significant portion of your liquid assets and/or the interest rate you would pay on a mortgage is higher than what you could earn on other investments. It’s important to properly assess your financial situation and long-term investment strategies, the drawbacks as well as the benefits.

I personally chose a middle ground.

When I bought here in 2011, I decided that a small mortgage was by far the better choice for me.

I still do consulting work at times and therefore the mortgage deduction...really helps in my tax bracket.

In addition, the interest rates were historically low and the extra amount in the bank with investments paying much more than the loan %...made the choice easier.

I have a neighbor that liked to brag about paying cash for their home (about 10 years ago), but one spouse went back to work a few years ago, because they became concerned that their 'nest egg' (small pension/SS/savings)...was being depleted faster than anticipated.

Some of us have nice, solid pensions and don't depend on SS...but others have retired based on their acquired savings and SS.

I golf with a guy that was whining recently about the addition of an expensive drug he just started taking and the price of his co-pays being significant. Since I knew from his ridiculing others for not paying off their bonds in previous conversations, whereas he had, I asked him if he knew then what he knows now...would he still pay the bond?

His answer was..."probably not."

It really is a personal choice and I'm not going to criticize someone...for whichever way they decided to go. :shrug:

I know when we purchased our home 11 years ago,we couldn't make up our mind whether or not to pay off the bond, but we decided we would pay it off. We figured if we decided to move, it may be a tipping point. The Villages sales agents said having the bond paid off wouldn't cause our home to increase in value, as far as asking price, but if there were two homes priced the same, one had the bond paid and the other didn't, obviously the house with the bond paid off is the better buy. At the time, the break even point for our home was 11 years. In other words, if we made yearly bond payments for, after 11 years, we would have paid roughly $16,000, which was the price of our bond, but it would have been mostly interest, and we would still have owed many more years of bond payments. I'm happy we paid off the bond initially, and saved all that interest. We are now thinking about downsizing, and the real estate people say that having no bond is a selling point for at least some of the (educated) buyers.

The decision is relatively easy if you have any analytic skills and can make some reasonable assumptions. Paying non-deductible interest is generally a bad idea.

Quote:

Originally Posted by ColdNoMore (Post 1372024)

Paying off the bond, is not a lot different than paying cash for a house here in TV...or getting a mortgage.

While it seems intuitively to be a no-brainer to pay cash and avoid the mortgage payment...that isn't necessarily the case.

Should You Pay Cash for a Home Instead of a Loan | Money

I personally chose a middle ground.

When I bought here in 2011, I decided that a small mortgage was by far the better choice for me.

I still do consulting work at times and therefore the mortgage deduction...really helps in my tax bracket.

In addition, the interest rates were historically low and the extra amount in the bank with investments paying much more than the loan %...made the choice easier.

I have a neighbor that liked to brag about paying cash for their home (about 10 years ago), but one spouse went back to work a few years ago, because they became concerned that their 'nest egg' (small pension/SS/savings)...was being depleted faster than anticipated.

Some of us have nice, solid pensions and don't depend on SS...but others have retired based on their acquired savings and SS.

I golf with a guy that was whining recently about the addition of an expensive drug he just started taking and the price of his co-pays being significant. Since I knew from his ridiculing others for not paying off their bonds in previous conversations, whereas he had, I asked him if he knew then what he knows now...would he still pay the bond?

His answer was..."probably not."

It really is a personal choice and I'm not going to criticize someone...for whichever way they decided to go. :shrug:

Quote:

Originally Posted by biker1 (Post 1372041)

The decision is relatively easy if you have any analytic skills and can make some reasonable assumptions. Paying non-deductible interest is generally a bad idea.

Over-simplification is what is easy.

Even those who have excellent analytical skills can disagree...due to individual circumstances.

Life expectancy is always an unknown and all of the "assumptions" in the world...doesn't change that.

Quote:

Originally Posted by ColdNoMore (Post 1372010)

No problem - I'm not losing sleep at night over $20G's. Good luck to you.

Quote:

Originally Posted by rustyp (Post 1372056)

No problem - I'm not losing sleep at night over $20G's. Good luck to you.

Neither do I...but there are some that do.

In post #62, you stated that you only looked at homes with the bond paid off...so there must have been a reason. :shrug:

Good luck to you also.