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Originally Posted by suesiegel
I'm not sure why you are asking us. We have all been through it but, did it years ago.
A lender today will often, confuse you with all the numbers, points etc. BY LAW they need to tell you the APR so you can compare apples to apples.
My view-YOU need to hire people on YOUR SIDE-a home inspector-cost about $600-an atty-cost about $800. The broker who you may believe is your friend is a commissioned salesperson. Do not allow yourself to be boxed in on either side. Everything you said while driving around with the broker they know. Well based on what we've seen this is a great deal. She should not but probably has shared that with her friend the broker representing the seller.
THE BOND-an interesting and foreign concept to us when be bought our house NEW. The bond which far as I know is calculated, set, based on the value of your home. Value of your home is of course based on what the builder and developer think they can sell it for. In our case the bond was approximately 6% extra on the price we paid for the home. Too many people buy and do not understand this.
Also, as someone else stated the interest is not a tax deduction and the interest is at a higher rate than your mortgage.
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You're mistaken on the bonding amount and how it is calculated.
The bond is based on the total value of the development bonds issued for the area. This amount is then divided by the number of assessable acres in the area. Now multiply this amount by the number of acres in your subdivision/unit. This gives the total bond amount for the unit. Divide this amount by the number of homes in the unit. This will give you the amount of the bond for each home in a unit or subdivision. All homes pay the same bond amount in a unit, regardless of home value or lot size.
Using this calculation you will see that the bond amount varies considerably across The Villages. Premier homes have bigger lots resulting in fewer homes for a unit's acreage and higher bond amounts. CYVs and Patio Villas bond amount are substantially less because the home lots are smaller, closer together, and have less acreage devoted to roads which are included in the calculations.
Again, the value/cost of the home at initial build or resale has no impact on the bond amount within a subdivision/unit. A $500K premier home on a standard size lot interior lot will pay the exact same bond amount as a $1.5M premier home on a corner waterfront in the same unit.
This same calculation method is used to determine the annual maintenance assessments that are also included in your annual property tax bill from the county.
Some have said that this puts an unfair burden on homeowners on a Premier community and an unfair advantage to CYV and Patio Villa community homeowners. On an individual basis this may be so however as a community, all are burdened the same.
Normally the infrastructure development costs are incorporated into the cost of each home based on whatever allocation methodology the builder decides and they are on the hook for some of these costs until the last home sells. Depending on the costs and the developer this can represent a substantial burden they need to carry and can result in lesser quality as a project stretches to its close as they try to get the last of their investments out of the properties.
The bonding method used in The Villages results in a known and specific cost burden distribution for each home. This also relieves the builder of a substantial financial impact and allows the focus to be on building a consistent product and not just trying to make their money back by selling out the development. The can focus their money on building homes and not on roads and sewer pipes.
Once a bond is issued the developer is responsible for paying back the bond or finding someone else to pay it. In this case the developer pays the bond costs on unsold properties, developed or not, and the new homeowner pays the bond on their purchased property. This is one of the reasons that CDD10 has two bond phases. CDD10 has taken nearly 5 years to build out. The first bond series covered the western half development and the second covers the costs for the eastern portion on CDD10.
The assertion that the bonds are just the developer being greedy are, in my opinion, unjust. You as a home buyer will pay the cost of the infrastructure one way or another. The bonding method used removes substantial risk and burden from the developer making it more likely quality and stability are maintained. It does transfer risk to the CDD that carries the bond and to its residents, but these risks appear to be mitigated buy a strong and financially stable company being able to complete the development as planned. Imagine the impact if halfway through the Fenney development the company ran out of money to finish the roads and utilities, it would devastate the home values in the community and the development would stagnate or another builder would come in and "finish" the project with a different set of ideals and character. This has happened to a great many developments across the country, rarely with a positive outcome to the homeowners.
The last point about the interest rate of the bonding is itself a topic for much discussion. The bottom line is however that you can pay it off any time you want, roll it into your mortgage if you bank will allow, or refinance it at whatever rate you can find. It generally only represents about 5% or less of the average home costs of a unit.