[electricblue]

Was wondering if this is your forever home, does it make financial sense to payoff the bond? Pros and cons of doing this? Thanks...

[Bogie Shooter]

Originally Posted by electricblue

Was wondering if this is your forever home, does it make financial sense to payoff the bond? Pros and cons of doing this? Thanks...

Here is more than you want to know about this subject.

Bond and/or Bond Interest Deductiblitiy

When to pay off home bond

Bond Payoff

Words to The Wise on Bonds

[bandsdavis]

Originally Posted by electricblue

Was wondering if this is your forever home, does it make financial sense to payoff the bond? Pros and cons of doing this? Thanks...

Everyone's circumstances are different, but our financial adviser said we should not pay it off. He said we would make more from the investments than we would save by the payoff. After 5 years, this is proving to be accurate.

[retiredguy123]

Originally Posted by bandsdavis

Everyone's circumstances are different, but our financial adviser said we should not pay it off. He said we would make more from the investments than we would save by the payoff. After 5 years, this is proving to be accurate.

It would not make financial sense to borrow money at more than 7 percent interest to invest it, which is what you are doing by not paying off the bond. If you know that you will never sell the house, the best financial decision is to pay it off.

[ureout]

Originally Posted by retiredguy123

It would not make financial sense to borrow money at more than 7 percent interest to invest it, which is what you are doing by not paying off the bond. If you know that you will never sell the house, the best financial decision is to pay it off.

I agree.... unless you can find a financial advisor that will guarantee that you can make 4 to5% over what you are paying for the bond why take the chance....double digit % returns are not easy without taking risks....and I was always taught take the risk when you are young and still working

[Topspinmo]

Anybody that loans money they don't want you to pay it off. WHY? So the can collect the interest and fees on the payments and not deduct from the actual loan. ANY loan they making lots of money or they're not going to loan it to you, or stay in business long. This goes for financial advisors also. they in it for the fees or chipping away at your bottom line (your Money you have invested that they are in charge of).

[Chatbrat]

Remember the rule of 72 @ 7% interest in 10+ years you have paid double the cost of the bond and its still not paid off--so, if you plan on living in your house for more than 10 years--its a no brainer--

I was taught interest keeps some people poor , while it makes other people rich.

[Blessed2BNTV]

We paid our bond off on first home in TV and recouped our money. Payoff was $17,000

We sold to a smart buyer who understood bonds because it was their second home in TV.

[Bay Kid]

I looked at the bond like paying credit card interest, which I never pay. I paid off my bond the 1st year.

[Challenger]

Originally Posted by bandsdavis

Everyone's circumstances are different, but our financial adviser said we should not pay it off. He said we would make more from the investments than we would save by the payoff. After 5 years, this is proving to be accurate.

get a new financial advisor--- Quickly!!!

[Chatbrat]

Honestly unless you are netting 10%, real $$, not paper profit--your adviser is not doing you any favors --the more $ he controls, the more $ he makes

[dewilson58]

Lots of good advice here.

There are a number of old threads on this topic.

Bottom line..........the answer is maybe.

[Bonny]

Both of our homes here we paid the bond off. We don't like interest.

[manaboutown]

Originally Posted by bandsdavis

Everyone's circumstances are different, but our financial adviser said we should not pay it off. He said we would make more from the investments than we would save by the payoff. After 5 years, this is proving to be accurate.

I wonder if the bond interest would remain nondeductible if it could be shown that the unpaid bond principal was used solely to make investments? Otherwise, and most likely, the interest paid on the bond remains nondeductible while returns on the investments are usually taxable in one way or another. Of course the more a stockbroker has to invest for a client the more he can make in commission income and management fees if that is how he is compensated.

[Villageswimmer]

Originally Posted by Blessed2BNTV

We paid our bond off on first home in TV and recouped our money. Payoff was $17,000

We sold to a smart buyer who understood bonds because it was their second home in TV.

Ditto!

Some buyers understand implications of the bond. Some salespeople do not and think it's hardly worth mentioning.