If you do the arithmetic, it’s probably never wise to pay off the bond early.
The municipal bond interest rate on The Villages development bonds is around 5% I think. You certainly couldn’t borrow money to pay off the bond at anything close to the municipal bond rate. Equally certainly, it probably would be easy to earn returns on the investment of the funds needed to pay off the bond before maturity that probably would exceed the bond coupon.
Also as noted above, if you sell your home you won’t enjoy a higher sales price because it is “bond free”. You can list it as a feature of the house, like a view, pool, landscaping, etc., but like any of those features, it’s unlikely that you will benefit in a higher sales price because the bond was paid off.
Unless you simply have a strong resistance to debt, paying off the bond early is probably a bad idea.
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Politicians are like diapers--they should be changed frequently, and for the same reason.
Last edited by Villages Kahuna; 11-26-2020 at 10:03 AM.
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