[biker1]

I believe he was trying to state that by not paying off the bond then you are choosing to pay interest that cannot be deducted on your Federal taxes (it is not an ad valorem tax) and if you are at the start of the 30 year amortization of the bond then you are paying down relatively small amounts of the principle.

Originally Posted by dwhite5773

wtf??

[Papa_lecki]

Originally Posted by Jazzman

Maybe you should go back to the same realtor and ask their view on resale homes that have no bond. Realtors I’ve spoken to all say that’s a plus versus a resale with a bond

I agree. The realtors downplay the bond, they say its like property taxes, you’re paying for infrastructure.
I also wonder if buyers of a resale, don’t always know the details of the bond, until they fall in love with a place.
As a buyer, the first question I ask the realtor is “what’s the bond”. Two identical houses, I’m going for the one bond free.
Agree, you may not get back 100% of the bond balance paid (just like you don’t get 100% of the cost of the pool or new kitchen) when you sell.

[Bay Kid]

Like credit card bad debt. Paid mine off 1st year. I hate to owe money.

[retiredguy123]

Originally Posted by Papa_lecki

I agree. The realtors downplay the bond, they say its like property taxes, you’re paying for infrastructure.
I also wonder if buyers of a resale, don’t always know the details of the bond, until they fall in love with a place.
As a buyer, the first question I ask the realtor is “what’s the bond”. Two identical houses, I’m going for the one bond free.
Agree, you may not get back 100% of the bond balance paid (just like you don’t get 100% of the cost of the pool or new kitchen) when you sell.

That is the problem. You don't get back 100 percent of the bond balance paid. That is why you can't view a bond the same way that you view a mortgage loan. When you pay off a mortgage, you always get back 100 percent of the amount you pay off in terms of your total investment return.

[Bill14564]

Originally Posted by Bay Kid

Like credit card bad debt. Paid mine off 1st year. I hate to owe money.

Only difference is if you think you might sell in the next few years you can pass that credit card debt on to the next owner.

If you plan to stay long term then definitely pay it off now rather than paying interest.

[mydavid]

Originally Posted by bandsdavis

Not sure when the best time is, but if you want the payment reflected on your annual bill, and therefore not have a charge on the November bill, you must pay off the bond by the end of July (actual date may vary by year). As for me, we have determined that we make more by leaving the money invested and paying annually than we would be withdrawing it to pay off the bond.

That don't make much since to me, I'm not a big on investments, but 6% is a lot of interest considering under 3% is the norm.

[Mrprez]

Originally Posted by mydavid

That don't make much since to me, I'm not a big on investments, but 6% is a lot of interest considering under 3% is the norm.

Very few people are paying 6%. Do the research, it isn’t that hard.

[Topspinmo]

Originally Posted by Kenswing

The interest rate for our bond will be 3.67%. Why pay it off? I can take that $30k and invest it in something that pays a better return.

Or you could lose you’re ?

[Bill14564]

Originally Posted by Mrprez

Very few people are paying 6%. Do the research, it isn’t that hard.

Over 10 CDDs with over 40 different amortization schedules each... sure, not really that hard but I sure don't have the time or inclination to calculate 400+ interest rates.

For mine, the pure interest rate seems to be 5%. However, that isn't all I pay. When I add in the Admin fee I get an effective interest rate of 5.5%. Still not quite 6% unless you round but since the Admin fee is the same every year, the effective interest rate will increase a small amount every year.

[Mrprez]

Originally Posted by Bill14564

Over 10 CDDs with over 40 different amortization schedules each... sure, not really that hard but I sure don't have the time or inclination to calculate 400+ interest rates.

For mine, the pure interest rate seems to be 5%. However, that isn't all I pay. When I add in the Admin fee I get an effective interest rate of 5.5%. Still not quite 6% unless you round but since the Admin fee is the same every year, the effective interest rate will increase a small amount every year.

What calculate? The interest rate is stated right there on the schedule. Plus all the of CDDs that are over 29 years old are paid off. Get real.😀

[VApeople]

We bought our house four years ago and were told our interest rate was 6%. We paid the bond off after two years.

[donfey]

Originally Posted by TNLAKEPANDA

When is the best time to pay off your Bond? Anyone know for sure?
I know that realtors do not recommend paying off the Bond... however the
Interest is around 6% which is very high.

Thanks

The bond is financed and is the same as any other loan. If you're making more money, net, in some investment, why would you use that money to pay off the bond "loan?"

[dewilson58]

Originally Posted by donfey

The bond is financed and is the same as any other loan. If you're making more money, net, in some investment, why would you use that money to pay off the bond "loan?"

Again, Personal Preference.

[manaboutown]

Originally Posted by donfey

The bond is financed and is the same as any other loan. If you're making more money, net, in some investment, why would you use that money to pay off the bond "loan?"

As I understand it the interest a homeowner pays on the bond is not tax deductible. Most investment income other than municipal bond interest is taxable either at regular income or capital gain rates; municipal bond interest may be subject to tax if one pays AMT. If bond interest is 5% one needs to net 5% after taxes just to pay the bond interest. One would likely need to securely earn at least 10% before taxes to make it worthwhile IMHO which might be pretty difficult to accomplish.

[Stu from NYC]

Originally Posted by manaboutown

As I understand it the interest a homeowner pays on the bond is not tax deductible. Most investment income other than municipal bond interest is taxable either at regular income or capital gain rates; municipal bond interest may be subject to tax if one pays AMT. If bond interest is 5% one needs to net 5% after taxes just to pay the bond interest. One would likely need to securely earn at least 10% before taxes to make it worthwhile IMHO which might be pretty difficult to accomplish.

Paying off a bond at 6% is also a guaranteed rate of return of 6%