[Bill14564]

Originally Posted by BrianL99

I'm not sure it matters how fast or slow you type, if what you're typing is wrong.

Very good point.

The Bond is directly related to the value of your property. Not to the home, but to the lot.

Nope. My neighbor's property appraises for more than mine but our bond amounts and bond payments are exactly the same (or were the same before I paid mine)

Bonds are not the same for everyone. As for mortgages, you get to choose how much your mortgage is, as does your neighbor. It's not fixed by anyone but the mortgagor.

Nope. All the bonds in a particular "Unit" are exactly the same. I didn't get to choose how much my bond was and neither did my neighbors.

You absolutely can pre-pay the Bond.

Nope. You can pay the balance in full or you can pay the installment but what you CANNOT do is pay an extra $3,000 on the principal of the bond in order to lower the installment payments. I certainly CAN do that with my mortgage.

As I've said, it differs from a Mortgage, in that it is "assumable". It does not have to be paid off to sell the property.

Yep. An example of how the bond is not just a mortgage.

You absolutely can refinance your Bond, anytime you wish Call your bank and if you're credit worthy, you're good to go.

Nope. You can pay the bond in full but you cannot refinance it. Sure, you can possibly take out a home equity loan or second mortgage to obtain the funds required to pay the balance of the bond. With a "true" refinance, the same collateral used for the original loan is used for the refinanced loan but that would not be the case with a "refinance" of the bond. I guess in a sense it is a form of refinance, but this changes the nature of the loan and the need for additional collateral makes it significantly different from a typical refinance.

As for the deducting the interest? See above. If you opt to refinance your Bond with a 2nd Mortgage on your Primary Residence, that Interest now becomes Tax Deductible (with some limitations).

Well.... *Maybe* you could deduct the interest from a 2nd mortgage (limitations apply) but that is not deducting the interest from the bond, it is deducting the interest from a separate loan which might be in the same amount as the bond balance.

No, there are no different ways to look at a Bond. It is what it is. The Bond was a loan to the developer to build the infrastructure. When he was done and started building houses, he added up all his costs, split them between all the lots and a mechanism was set up for the buyer's to pay their share. This document explains it: VCDD Pay Off Bond.

I kind of agree here except you insist it is the same as a mortgage when it clearly is not.

The bottom line is the same. If you have a BOND, you do not own your land "free & clear". You have a loan against it that is transferable. It is a debt to the land, not the person. Essentially, the Town/Collector of Taxes/Bond Holder holds an interest in that land, as shown on your Tax Bill. It is different than taxes, as taxes accrue yearly and is not a fixed amount.


(If someone wants to nit pick and talk about the difference between the Note, the Mortgage, a Lien or any general encumbrances, I get it. But to simplify the discussion, I'm lumping them all in together as "mortgage".)

And some people look at the tax bill and lump the county property tax, the school tax, the WMD tax, the fire assessment, the maintenance fee, and the bond together and refer to them as simply the "annual property tax." (see the argument over the 33% increase a few years ago) Just because they do that doesn't make it right. Just because you want to use the word "mortgage" doesn't make it the same as a mortgage.