Originally Posted by Nana2Teddy (Post 2386311)

We bought new in 2022 and our bond interest is around 3%. We’re definitely not going to pay it off. Interest began to rise significantly right after we bought, so we lucked out.

Originally Posted by Normal (Post 2386315)

Late 21-2022 was definitely the best window to borrow any funds for a home purchase or bond. Anyone who wanted to pay off borrowed funds from that time period would be crazy. If you are paying 2-3 percent for a 500 thousand dollar home loan, that same amount in money markets and stocks can earn you about 7% conservatively.

No one I know of would throw that free money away.

Originally Posted by Bill14564 (Post 2386349)

In addition to the interest on the bond there is the yearly admin fee. This may be negligible at the beginning of the payments but drives the effective interest rate up towards the end of the loan.

I could find no money market account with an interest rate above 5%.

The stock market is up this week but may be down next week. Over time it has increased but there is always the risk of a downturn. On the other hand, the interest and admin fee on the bond will always be there.

I paid mine off with no regrets over throwing free money away.

Originally Posted by Normal (Post 2386356)

My returns were about 17% this past year off of investments. I certainly wouldn’t pay off a 500k loan at 2.5% when that same money makes me over 80k a year in capital gain. The 7% is a VERY conservative mean in return.

Originally Posted by Bill14564 (Post 2386360)

This year, yes but not 2020, 2022, or 2023.

I have some cash laying around so please name two money market accounts with a very conservative return of 7%.

Originally Posted by Goldwingnut (Post 2386114)

NO! NO! NO!
The price of the house has nothing to do with the bond amount. It is based on the cost per acre for the area of development times the number of acres in a subdivision divided by the number of homes in the subdivision. The cost of the home has no impact on the amount of the bond.

Originally Posted by Bill14564 (Post 2386349)

In addition to the interest on the bond there is the yearly admin fee. This may be negligible at the beginning of the payments but drives the effective interest rate up towards the end of the loan.

I could find no money market account with an interest rate above 5%.

The stock market is up this week but may be down next week. Over time it has increased but there is always the risk of a downturn. On the other hand, the interest and admin fee on the bond will always be there.

I paid mine off with no regrets over throwing free money away.

Originally Posted by Goldwingnut (Post 2386114)

NO! NO! NO!
The price of the house has nothing to do with the bond amount. It is based on the cost per acre for the area of development times the number of acres in a subdivision divided by the number of homes in the subdivision. The cost of the home has no impact on the amount of the bond.

Originally Posted by Maker (Post 2386197)

I do not think bond interest is deductible if you itemize. Neither is the admin fee. But your investment interest is taxable. You would need a significant higher investment gain than the bond cost to make that beneficial.

Originally Posted by DAVES (Post 2386061)

An endless confusion. The bond, you are paying for home support stuff like roads. One way of the other you pay for this as taxes, and or in the price of the home. Sounds like you have a mortgage on your home. The bank can tell you the interest you pay on the bond it is our ours was higher than the interest on the mortgage. You will be told, if you pay it off you will not recover the cost. Not sure that is true. Buying a resale. The SALES PERSON will tell a new buyer that the AC is new or whatever. They try not to open up the bond can of worms. My view. If, you pay 500 for a home and the bond is 30, you paid 530 for the home and the 30 you pay a higher interest on it..
Finances, it always depends. Contrary to my PLAN, we do not itemize so interest is not deductible. Typically as in a mortgage you pay the interest first and then the principal; MATH CONFUSION. If, you pay the interest first and you then decide to pay it off the real interrst you've paid is higher than what you are told-if you ask.