Pay your bond or not?

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  #16  
Old 06-05-2008, 10:33 PM
Sidney Lanier Sidney Lanier is offline
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Default Re: Pay your bond or not?

In my opinion, it depends. I know, that's a big help.

It's a real plus to BUY a house with 'bond paid'; we did that and know that the sellers did not get back the value of the bond.

If you know you're going to live with the house in frog-like fashion (here till you croak...), then you save yourself a lifetime--well, at our age a lifetime, as I believe the bonds are 30, not 10, years--of interest.

On the other hand, if you have better use for that money that will generate more income than you're paying for keeping the bond as your debt, you're better off not paying it.

And if you're SELLING a house, it may look good in the listing to see 'bond paid,' but IMHO you don't get back what you put into paying it.

Doesn't help much, does it?...
  #17  
Old 06-05-2008, 10:49 PM
Just Susan Just Susan is offline
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Default Re: Pay your bond or not?

Actually Sidney your comments do make sense. "It depends" is wise, because it really does depend on each person's own financial situation.
  #18  
Old 06-05-2008, 10:58 PM
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Default Re: Pay your bond or not?

Indy Guy, I'm with you,
I PREFER to be debt free, however, I don't see the real benefit to paying it early and I'll keep my little few thousand invested elsewhere, pretty much offsetting the interest.
I thought I'd read it was 30 years and something like 7%. The interest is tax deductible.

I don't plan to pay it off early unless I get a windfall and don't want to keep up with it.
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  #19  
Old 06-05-2008, 11:00 PM
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Default Re: Pay your bond or not?

30 years and our interest rate would be 6.050%
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  #20  
Old 06-06-2008, 01:05 AM
Indy-Guy Indy-Guy is offline
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Default Re: Pay your bond or not?

I play golf with two guys who were advised by their Villages realty rep not to pay their bond off for at least two years so they will know that this is the house they want to spend many years in. Both of them have purchased a new home in The Villages and sold their original Villages home. Both feel that they would not have recouped their bond if they had paid the bond off. One downsized and one went to a larger home. You never know if you purchased the right size home until you spend some time in it.

I will pay mine off next year after I am sure that I don't want to move to another house in The Villages as this is the only place I want to live.

Your interest quotes are correct if you live in your home for 30 years without paying your bond off. Remember you have the oppurtunity to pay your bond off one time each year. I for one hope I live in my home for 30 years. Let see I will be 93! Where do I sign up for that!
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  #21  
Old 06-06-2008, 12:38 PM
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Default Re: Pay your bond or not?

When we moved to TV we had enough equity from our home up north to pay cash for the house and pay the bond. There is a certain sense of security knowing we can live on our retirement income and the only bills are our monthly expenses. We do not plan to sell our home or move to a different part of TV so I am not worried about resale value. The only thing that "Frosts-My-Giggy" is the same home we purchased 2+ years ago is now selling for about $50K less due to the down turn in the real estate market.
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  #22  
Old 06-06-2008, 02:11 PM
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Default Re: Pay your bond or not?

My wife and I plan to buy a modestly priced re-sale with the bond paid. I don't like debt and besides I will be living on an income of about 4,500 per month and hope it will be enouh for my wife and I to enjoy our new lives in the TV.
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  #23  
Old 06-06-2008, 02:14 PM
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Default Re: Pay your bond or not?

I forgot we'll be buying our house for cash, and no other debts.
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  #24  
Old 06-07-2008, 01:14 AM
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Default Re: Pay your bond or not?

I arrived in TV thinking that if we bought, we would pay off the bond immediately.

But then we changed our minds.

As has been said earlier in this thread, it depends.

At the peak of the market, recouping a paid bond was not much of a problem. Buyers were begging sellers to take their money. And buyers were flinging money at the developer as fast as it could be flung.

But now that we know what we know now, it seems that if you think you may ever want or need to sell your TV house, you should consider not paying the bond. It is not only that you may not be able to recoup the money. It is a little beyond that even.

If you have not paid the bond and you want or need to sell, your initial listing price can be lower. You will be able to better place your house to compete and to sell faster.

There is an MLS site for TV that I look at every now and then. The site has a section "The 20 Newest Price Changes." A couple of years ago, I doubt that such a section existed.

Price reductions can be painful to watch. There is one on there right now that just had a reduction of $500. Yep. $500. Why bother?

There is a saying, "If you have to cut off a dog's tail, don't do it an inch at a time." Well, in my younger days that was always my classic line of advice for anybody who was trying to break up with somebody. But it also applies to real estate price reductions.

Boy, am I digressing tonight.

Back to the bond.

The point is that if you think that you will ever sell the house, you might want to think hard about giving yourself some breathing room to list at a highly competitive price at the very beginning. Don't get caught in a web of price reductions. Price it right and move it. And one way to get that breathing room, or equity, to establish an inital lisiting price of the future is to consider putting off paying the bond.

But, of course, it all depends.

Oh, and I am a financial conservative. So hold onto that money if you decide not to use it for the bond.

Boomer

  #25  
Old 06-07-2008, 02:24 AM
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Default Re: Pay your bond or not?

Quote:
Originally Posted by Boomer BeBack


There is a saying, "If you have to cut off a dog's tail, don't do it an inch at a time." Well, in my younger days that was always my classic line of advice for anybody who was trying to break up with somebody. But it also applies to real estate price reductions.

I started to write something about bonds but realized it was a bit more complicated than I wanted to get into now. I'll come back to that later. In the interim, I just wanted to say ~~~ Boomer, you ain't babysittin' my dog!!!!
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  #26  
Old 06-07-2008, 02:52 AM
Boomer Boomer is offline
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Default Re: Pay your bond or not?

Quote:
Originally Posted by Muncle
~~~ Boomer, you ain't babysittin' my dog!!!!
Oh Munc,

I really like dogs. You are a Midwestern boy. You know how we like our sayings. You know that you do. You're not going all literal on me. I know that you are just yankin' my chain.

BUT . . .

OH NO!!! There are some really nice people on here and what if they look in and they are reading really really fast and then they think OH NO!!!! Boomer is Cruella DeVil!!! MUNCLE SAID!!!! And they will come after me and I will have to find out where you got that picture only I will need to find one with a girl on it or I will have to wear a letter of some color or another. And it will be awful and terrible and hideous and I will finally go outside and work in my yard in the evenings and not hang out in my kitchen on the computer and OH NO!!!!! I am overreacting. OR AM I??? But I am innocent. I just like metaphors or sayings or whatever. Sometimes I like analogies. I AM INNOCENT!!! And now I am not even making paragraphs. And it's all too much. And I have hijacked a thread. OH NO!!!!

I must be off.

Goodnight.

Boomer
  #27  
Old 06-07-2008, 03:46 AM
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Shirleevee Shirleevee is offline
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Default Re: Pay your bond or not?

Loved the line, "financial conservative"! Well so am I and guess what?

We are NOT paying the bond off this year!

Thank you all for all your insights........

Shirleevee :bigthumbsup:
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