[CoachKandSportsguy]

My advice is to pay off the bond, non tax deductible interest, and recoverable in 5-6 years with average 2-3% inflation in the house price. Especially if you want to retire with minimum expenses and want to live in the house for 5 or more years, which is an ideal financial goal. BUT we don't know your financial asset strength, so if you have the full amount and that won't impact your retirement or life style, yes. However, to get the early payoff cash back, you need to have the house sale price to appreciate above your cost+ bond amount by sale time.

The other argument, the reason why people don't pay off the bond early is that new or recent construction appears cheaper as the cost of the bond isn't included in the house sale price, as listed on the county records. Adding the bond to a 1 year old house listed as purchased at $355 K a year ago, and then adding a $30K bond is an instant 10% appreciation of asking price against a 2-3% annual appreciation looks overpriced. . .

Optics of comparison for naive or impulsive buyers, as most house purchases are an emotional decision, with the backstop of the mortgage affordability.. . . the bond doesn't pay into that equation for lenders, and buying emotions . . . behavioral finance 101. . . Amazon shipping is not free, its just bundled in your price, but you can't see it, so you really don't know what it is. . . could be a percentage of the price, which is averaged out over all items forecast to be sold. .

finance guy

[cj1040]

We sold a home up north for much more than our new home here and it had been paid off for many years. We could easily have paid cash for this house but with a mortgage of 2.75 percent we decided to invest our house money and we never plan to pay off either the bond or this house!!! We are in our 70s so the 30 year mortgage will last longer than we will !!!

[LuvtheVillages]

Originally Posted by Stu from NYC

Wonder what percentage of villagers actually have a mortgage which would make it more likely to itemize.

With the increased standard deduction of $27,400, and today’s low interest rates, it doesn’t pay to itemize even with a mortgage.

[Garywt]

Originally Posted by LuvtheVillages

With the increased standard deduction of $27,400, and today’s low interest rates, it doesn’t pay to itemize even with a mortgage.

I still itemize, 2 mortgages, 2 tax bills and more. I think I was over $50k in deductions this year.

[GOLFER54]

I called James and he said, “ Pay off Bond .”

[Northerner52]

Newer bonds have lower interest rates. Realtors suggest not paying it off

[Villages Kahuna]

Pay off your mortgage. Paying off your bond will not make your house sell any faster.

[tsmall22204]

Paying off the bond is saving of the high annual interest rate of, I think, around 6 percent. I paid off my bond because of that, not for resale value. This is .y forever home.

[kidnerkim]

Originally Posted by retiredguy123

I agree, but sometimes plans change. As soon as you pay off the bond, the cash out value of your house will immediately decrease. You will only come out ahead if you actually keep the house for about 8 years or longer as "planned".

Why would cash out value of your home decrease? Bond paid off is a selling point ! We are looking at homes & are NOT looking south of 44 due to the very large bonds. I have even heard of people making offers on homes & offering less than the asking because of the bond. The interest rate is higher than mortgage rates right now so I would pay off.

[Stu from NYC]

Originally Posted by GOLFER54

I called James and he said, “ Pay off Bond .”

James?

[noslices1]

Just pay cash for your house and then pay cash for the bond. You won’t have any monthly charges, or the big bond pay off when you pay your taxes. Easy Peezy.

[dewilson58]

Originally Posted by Northerner52

Newer bonds have lower interest rates. Realtors suggest not paying it off

Don't forget to figure in the Admin Fee to get your Effective Interest Rate......ain't that cheap.

[Tmarkwald]

I've struggled as well. Then I looked at investments, and I'm doing about 16% a year vs a 2.8% mortgage. Doesn't make sense to pay off the mortgage. Even though I no longer have enough write offs to need the mortgage interest deduction, it still doesn't make sense.

So, balance what your money can do for you in the market. The increase in home values in TV - historically 6% or so, will probably go up to 10% annual as so many people are moving to Florida and we are a magnet in TV.

It's a tough call..

[NY2TV]

When first buying the house, I put more of a down payment toward the mortgage rather than paying off the bond because the bank gave me a lower interest rate for putting a larger down payment. If that had not been the case, I would have paid off bond since rate was much higher than mortgage rate. I recently paid off bond because savings account rates are so low, it was worth it to take money out of savings. I chose bond instead of mortgage because bond rate is higher and not tax deductible. And my mortgage payment will go down whereas if I had paid down mortgage I wouldn't have seen savings until the last year when it got paid off early.

[terenceanne]

Although it may not be financially sound - to have zero debt is comforting and a nice position to be in. Something financial people never take into account is peace of mind.
Get rid of all your debt including the bond. If you can afford it of course.