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Originally Posted by Papa_lecki
Is it sneaky? It seems very transparent.
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Exactly, primary advantage is bonds allow the infrastructure to be in place simultaneously with home construction.
Bonds carry with the property and are not a personal debt. They do not affect your credit. They are an annual expense unless paid off.
Bonds effectively reduce the amount of a loan if financing the house when compared to including the bond value in the cost of the home.
The true cost of a Bond is the difference between what that money could earn if invested and the Bond interest.
A simplified example - if the bond is 5% and you can earn 4% in a CD, true cost is 1%.
But many people are not comfortable with debt of any kind and have the resources to pay it off.