Talk of The Villages Florida - View Single Post - bond
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Old 03-22-2010, 08:01 PM
herbaru herbaru is offline
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Default Bond Interest
Quote:
Originally Posted by GuyWin View Post
I just calculated the interest being charged on my CDD Debt Assessment (Bond) if we finance it over 30 years instead of paying it in full. This does not include the Maintenace Assessment that never goes away.
  • Our CDD Debt (bond) in Pennecamp is $20,268.61.
  • The annual amount each year for 30 years is $1,652.69.
  • The annual rate to amortize $20,268.61 for 30 years @ $1,652.69 a year comes to 7.2%. Over the 30 years we will pay a total of $49,580.
  • That's almost two and a half times the bond itself!
  • Paying the bond in full would save us $29,312 in interest.
I have read something like this before. Can someone please help me understand why most people suggest you do not pay off the bond? Please be gentle, I am math challenged.