[Veronica]

The bond on a TV house is not billed upfront when you buy a house. The principal (and interest?) is billed with your property taxes and takes about 10 years to pay off. It is not a good idea to pay off the bond upfront, because if you ever need or want to sell your house you won't get your money back. This is my understanding of TV bonds.

[Challenger]

Originally Posted by Veronica

The bond on a TV house is not billed upfront when you buy a house. The principal (and interest?) is billed with your property taxes and takes about 10 years to pay off. It is not a good idea to pay off the bond upfront, because if you ever need or want to sell your house you won't get your money back. This is my understanding of TV bonds.

your conclusion is quite debateable. One size clearly does not fit all. I paid off our bond and am quite sure thet it was he right course with my personal financial and life situation.

[JRichm369]

It appears that the bond is quite similar to carrying a second mortgage, on a home, the exception being that obligation stays with the property regardless of who owns the property until the bond is satisfied. I find it quite hard to believe that a buyer would not recognize that the bond is part transaction. In other words if the bond is not paid off it is a financial obligation for the property owner, if the bond is paid, the property value would be higher.

[Challenger]

Originally Posted by JRichm369

It appears that the bond is quite similar to carrying a second mortgage, on a home, the exception being that obligation stays with the property regardless of who owns the property until the bond is satisfied. I find it quite hard to believe that a buyer would not recognize that the bond is part transaction. In other words if the bond is not paid off it is a financial obligation for the property owner, if the bond is paid, the property value would be higher.

The value would not be higher. The leins would be less.
Indebetedness does not change the market value. A non informed buyer, however, may not employ the right factors when deciding how much to pay.

[JB in TV]

An appraiser for a lender for a subsequent buyer will not include the bond as part of the value, which would eliminate some buyers of that property where the bond has been paid and included in the sales price.

Example: Buyer can afford $60,000 as a down payment, and is looking for an 80% loan. He/she can buy a $300,000 house. If the seller paid off the bond, (assuming a $25,000 bond) the price would be closer to $325,000, which now requires $65,000 (80%) as a down payment, taking that buyer out of consideration for that home with the bond paid.

When you are trying to sell anything, you almost always want the biggest audience of potential buyers. The seller who paid off his/her bond has reduced the number of buyers who would be qualified to buy their home, therefore potentially reducing their sales price (not getting full value for their pre-paid bond).

This is my opinion.

EDIT: Ultimately, I agree with what dewilson58 says in the next post:

"I agree with other posts...........it's up to your personal financial position.
Are you going to stay in the home, or upgrade or die within 30 years??"

[dewilson58]

This is always a very entertaining question on TofTV.

The bonds have 30 year amortization.

The interest rate appears "low", but with the annual fee, the effective rate is much higher.

I agree with other posts...........it's up to your personal financial position.
Are you going to stay in the home, or upgrade or die within 30 years??

If you invest the funds, can you earn more than the effective rate??

Some people hate debt and want to get rid of it.

The debate comes on the impact of the homes value. Would you pay more for a house without a $20k or $40k bond than a home with the bond still alive and kicking??? Some say no, some say yes.

If you go the full 30 years............you will be shocked as to the total amount you paid for the $20k or $40k bond. The amortization schedules are out there, with the administrative fee included.

Enjoy all the responses.

[janmcn]

Originally Posted by Veronica

The bond on a TV house is not billed upfront when you buy a house. The principal (and interest?) is billed with your property taxes and takes about 10 years to pay off. It is not a good idea to pay off the bond upfront, because if you ever need or want to sell your house you won't get your money back. This is my understanding of TV bonds.

One other thing, the interest on the bond is not tax deductible.

[dewilson58]

For some facts, not fiction:

Village Community Development Districts