Bond and/or Bond Interest Deductiblitiy

[TOTV Newbie]

Is the bond or the interest on the bond federally tax deductible?

What is the interest rate y'all are paying on the bond?

Do you prefer to pay the bond off over 30 years or just bite the bullet all at once?

[Kelsie52]

Is the bond or the interest on the bond federally tax deductible?

What is the interest rate y'all are paying on the bond?

Do you prefer to pay the bond off over 30 years or just bite the bullet all at once?

Bond interest not deductible
Bond interest differs according to area I have seen from 5 to 7.5 %

Paying off bond depends on your situation IMHO if you will stay in your home and do not intend to move and you can afford it ---pay it off .... if not pay yearly -it is included in your tax bill..

Good luck

[retiredguy123]

Your tax bill has two parts, the ad valorem part and the non-ad valorem part. "Ad valorem" means "based on value". The ad valorem part is tax deductible on your Federal tax return, but the non-ad valorem part is NOT deductible. The non-ad valorem part includes the bond principal and interest payments and the maintenance fee for the common areas of the development. These are not based on the specific value of your house, and, therefore, they are not deductible on your Federal tax return.

[Villageswimmer]

Ours is 6.125% ! They also charge an "administrative fee" annually for being so kind as to collect it. Check your amortization statement.

[twoplanekid]

Do you prefer to pay the bond off over 30 years or just bite the bullet all at once?


When selling a house in TV, bond is paid notice is a nice selling tool but doesn’t seem to actually help increase the value/selling price of the home. The fair market values of homes in TV do not include the bonds remaining balance.

[njbchbum]

You might be interested in reading this site re Villages bonds:
Residential Bond Assessment Information (http://www.districtgov.org/departments/finance/bond_info.aspx)

[retiredguy123]

I hate debt, but, in my opinion, you should not pay off the bond unless you plan to keep the house for a long time. Houses with a bond may be more attractive to a buyer because the buyer has the option to assume the bond or to pay it off. However, if you pay off the bond, you remove the buyer's option because the bond cannot be reinstated once it is paid off.
Of course, a house with a paid off bond is more attractive than one with a bond if the price is the same. But, if you pay off the bond, you need to raise the price to get your money back.

[dewilson58]

TALK TO A TAX EXPERT...............not Villagers.

Different tax professionals take different positions and they can tell you how aggressive each position is.

I'm quite happy with the aggressive position I have taken.


:popcorn:

[biker1]

There is no free lunch. If you buy a used but relatively young designer home, you are probably looking at $1600/year bond payment. If the bond was paid off, the house should sell for more money because the new buyers would have $1600/year less expenses. The higher price would result in a larger mortgage but it should be a wash. I suspect most people can't do the math and the real estate agents can't explain it. Too bad ...



I hate debt, but, in my opinion, you should not pay off the bond unless you plan to keep the house for a long time. Houses with a bond may be more attractive to a buyer because the buyer has the option to assume the bond or to pay it off. However, if you pay off the bond, you remove the buyer's option because the bond cannot be reinstated once it is paid off.
Of course, a house with a paid off bond is more attractive than one with a bond if the price is the same. But, if you pay off the bond, you need to raise the price to get your money back.

[biker1]

Our tax code is pretty much based on the honor system. You can talk to as many tax professionals as you want but the bond interest is not legally deductible. If you are deducting it, you should hope that you don't get randomly audited. The chances of a random audit are slim. If you want to legally deduct it, take out a home equity loan and pay off the bond and then deduct the interest on the home equity loan.




TALK TO A TAX EXPERT...............not Villagers.

Different tax professionals take different positions and they can tell you how aggressive each position is.

I'm quite happy with the aggressive position I have taken.


:popcorn:

[rjm1cc]

As stated not deductible. The cost of your house is not deductible either. Consider the bond as part of the cost of the home. If you are going to have a mortgage see if the lender will led you enough money to pay off the bond and the mortgage interest is deductible.

[twoplanekid]

I don't believe that the bond has any influence on the appraised value for a lending institution on a house in TV. It didn't for me on my house in 2014.

[LuvtheVillages]

If you itemize your deductions (schedule A), you can deduct the interest portion of your bond payment as mortgage interest.
You can find the break out of interest vs principle vs admin fee for your home on the Villages governance web site.
It is mortgage interest because the bond is secured with a lien on your home.

[dewilson58]

Our tax code is pretty much based on the honor system. You can talk to as many tax professionals as you want but the bond interest is not legally deductible. If you are deducting it, you should hope that you don't get randomly audited. The chances of a random audit are slim. If you want to legally deduct it, take out a home equity loan and pay off the bond and then deduct the interest on the home equity loan.

:laugh:

[retiredguy123]

Not true. The interest portion of your bond payment is not deductible. It is a non-ad valorem payment, not based on the specific value of your house, not the same as mortgage interest, and it is not deductible. It is also why the county provides a separate accounting on your tax bill for ad valorem and non-ad valorem payments. The bond interest is included in the non-ad valorem section of the tax bill. This is the IRS and the TurboTax interpretation of the Federal tax laws. But, you can deduct anything you want as long as you don't get audited.

[graciegirl]

Not true. The interest portion of your bond payment is not deductible. It is a non-ad valorem payment, not based on the specific value of your house, not the same as mortgage interest, and it is not deductible. It is also why the county provides a separate accounting on your tax bill for ad valorem and non-ad valorem payments. The bond interest is included in the non-ad valorem section of the tax bill. This is the IRS and the TurboTax interpretation of the Federal tax laws. But, you can deduct anything you want as long as you don't get audited.

Smart guy.

Indeed!

[dewilson58]

Not true. The interest portion of your bond payment is not deductible. It is a non-ad valorem payment, not based on the specific value of your house, not the same as mortgage interest, and it is not deductible. It is also why the county provides a separate accounting on your tax bill for ad valorem and non-ad valorem payments. The bond interest is included in the non-ad valorem section of the tax bill. This is the IRS and the TurboTax interpretation of the Federal tax laws. But, you can deduct anything you want as long as you don't get audited.

But it was the IRS that thought TV's bonds were taxable.


:loco:

[Viperguy]

OK.so. We own our house and just got the tax bill with the bond added on to the tax. Does anyone know what the amortization period is on the bond? 10 yr, 15 yr 20? Our house is 6 yrs old. THX

[dewilson58]

OK.so. We own our house and just got the tax bill with the bond added on to the tax. Does anyone know what the amortization period is on the bond? 10 yr, 15 yr 20? Our house is 6 yrs old. THX

Here are the schedules:

Residential Bond Assessment Information (http://www.districtgov.org/departments/finance/bond_info.aspx)

[kstew43]

OK.so. We own our house and just got the tax bill with the bond added on to the tax. Does anyone know what the amortization period is on the bond? 10 yr, 15 yr 20? Our house is 6 yrs old. THX

30 years on most homes.....

[CWGUY]

OK.so. We own our house and just got the tax bill with the bond added on to the tax. Does anyone know what the amortization period is on the bond? 10 yr, 15 yr 20? Our house is 6 yrs old. THX

Bond Amortization Schedules (http://www.districtgov.org/departments/Finance/amortization.aspx)


Look on your I.D. Card to find your "Unit Number" Tax Bill will also have it.

I think they are all 30 years in Sanibel and close to 7% interest.... YOU DID KNOW THAT WHEN YOU PURCHASED? RIGHT?

If you own in a Villa Area (least expensive) you owe over a $1000 a year for the next 26 years.

[Villageswimmer]

Bond Amortization Schedules (http://www.districtgov.org/departments/Finance/amortization.aspx)


Look on your I.D. Card to find your "Unit Number" Tax Bill will also have it.

I think they are all 30 years in Sanibel and close to 7% interest.... YOU DID KNOW THAT WHEN YOU PURCHASED? RIGHT?

If you own in a Villa Area (least expensive) you owe over a $1000 a year for the next 26 years.


This was glossed over by our sales agent. We did the research ourselves before buying.

I don't think the gloss over was malicious--I don't think most agents understand the whole bond
concept.

Educate yourself before buying and know what that bond really costs! And, no, no Portion of it is legally deductible interest! It would cost less on many levels if it were simply added to the home price.

[TOTV Newbie]

Thx for the input. We will probably just pay it off once our existing home closes.

[VillagerNut]

Thx for the input. We will probably just pay it off once our existing home closes.

It is not suggested that you pay the bond off. The reason is if you decide you need to sell you have lost that money because a house with a paid off Bond does not sell for a higher price. The paid off Bond helps a house sell faster. To find out what interest rate you are paying you can contact the district office or get on districtgov.org and look it up. The bond are either 20 or 30 years. The 20 year bonds are north of 466 off of Morse. The rest of the homes are 30 year bonds. But it is up to you if you pay it off or not. Just realize if you sell you will not get any of it back in a higher price. Also you cannot pay the bond off now until January 2. You have up to the middle of July before they cut off the pay off of bonds for the year.

[Boilerman]

What is the average bond value and annual payments for a $300k home?

[Kelsie52]

What is the average bond value and annual payments for a $300k home?

Hard to tell it is according to where the home is located not the price

example--you could have a court yard villa that sells for 375 thousand (golf course view)...and a another in the same development that sells for 210 --the bond will be the same ...in this example the bond is 12,000----about 950 per year

The bond is determined by the infrastructure dollars spent by the developer in a certain area divided by the number of homes in that area.

[birdiebill]

Using the amortization table for District 10, Unit 193, the bond payment is a little over $1700 per year for 30 years. For 2017 that breaks out at $334.98 for principal, $1267.66 for interest and $109.58 for administration cost. Just like a mortgage, the interest paid way exceeds the principal in the first nearly 20 years of the bond payments.

Over the thirty years a person would pay $22,534.28 for principal, $25,520.36 for interest, and $3,285.79 for administration cost for a total of $51,340.52.

Those are the numbers to consider whether to pay off the bond taking into consideration the interest is not tax deductible. If a person wants to deduct the interest, it might be better to take out a home equity loan and pay it off over time if the house is a "forever" home. A paid off bond in a new area will not be recouped if a person sells the house in the first few years.

[RickeyD]

What is the average bond value and annual payments for a $300k home?



That depends when the house was built and the size of the lot.

[Challenger]

It is not suggested that you pay the bond off. The reason is if you decide you need to sell you have lost that money because a house with a paid off Bond does not sell for a higher price. The paid off Bond helps a house sell faster. To find out what interest rate you are paying you can contact the district office or get on districtgov.org and look it up. The bond are either 20 or 30 years. The 20 year bonds are north of 466 off of Morse. The rest of the homes are 30 year bonds. But it is up to you if you pay it off or not. Just realize if you sell you will not get any of it back in a higher price. Also you cannot pay the bond off now until January 2. You have up to the middle of July before they cut off the pay off of bonds for the year.

If the statement that an identical home with a remaining bond balance would sell for the same price as one without a similar lien is correct, TV would be unique in the world of real estate valuations and sales. To assume the existing lien(bond) would mean that you were ,in fact, paying a higher price- not debatable. Can anyone show statistical proof (not opinion) that such an anomaly exists?

[Bogie Shooter]

That depends when the house was built and the size of the lot.

Neither applies.

How does the District arrive at the amount? Does everyone pay the same amount?
The Bond Debt Assessment was set at the time the bond used to build the infrastructure was issued. The formula for calculating each lot’s proportionate share starts with the total cost of the bond (including interest) issued to pay for the infrastructure. That cost is divided equally among each assessable acre in the “phase” of the District for which the bond was issued. That gives you a cost per acre. The cost per acre is then multiplied by the number of acres in the unit in which you live. That gives you the obligation for the unit as a whole. The unit total cost is then divided by the number of lots or parcels in the unit, and that computation gives you the amount of the assessment levied against each property. Therefore, each lot within a unit pays the same amount. Amortization schedules for each unit are located on the Districts' website; Village Community Development Districts (http://www.districtgov.org) under the Finance Department link.

[birdiebill]

What is the average bond value and annual payments for a $300k home?

The bond amount and the payment can be determined by looking at the amortization table at the CDD website. Find the district and the unit number for the house location. All homes in the same unit have the same bond amount regardless of the price of the home or the lot. For example, all designer homes in district 10, unit 193 which is in Osceola Hills have the same bond amount and payments regardless of lot size and home cost. Units 192 and 194 are also in Osceola Hills but have a different amount from unit 193. Villas are different.

[dewilson58]

If the statement that an identical home with a remaining bond balance would sell for the same price as one without a similar lien is correct, TV would be unique in the world of real estate valuations and sales. To assume the existing lien(bond) would mean that you were ,in fact, paying a higher price- not debatable. Can anyone show statistical proof (not opinion) that such an anomaly exists?

Agree. A ToTV conversation myth.

[retiredguy123]

In my opinion, if you are going to stay in the house for about 5 or more years, and you can afford to, it makes financial sense to pay off the bond. If you are going to sell the house, it makes more sense to keep the bond. That way, the buyer can make the decision to keep the bond or to pay it off. Logically, giving the buyer more options should make the house easier to sell. Although, in today's world, things are not always logical.

[LitespeedRider]

Agree. A ToTV conversation myth.


For some odd reason, when looking at properties sellers try to make some crazy differential between the two. "Oh, that is not the price of the property, that is the price of the BOND".

Um, no. You dont get the one with out the other. So, anyone with conscious thought would add them together in the "total price".

It would be analogous to a car sales person not including tires/wheels "with" the car - rather making them a separate line item.

Attn: Real Estate Professionals who try to make it seem like they are not part of the cost of a property...bond fee's are.

[twoplanekid]

When the appraisal was prepared on our TV house, new build by Lake-Sumter Appraisals to provide to our lending institution, the bond was not included in that appraisal. It is my understanding that the TV bond is not included in any TV house appraisal and thus does make TV unique in that respect. The asking price may or may not reflect a bond balance.

The developer lists the prices of all new houses on their web site without including the bond costs.

[Challenger]

When the appraisal was prepared on our TV house, new build by a Florida firm to provide to our lending institution, the bond was not included in that appraisal. It is my understanding that the TV bond is not included in any TV house appraisal and thus does make TV unique in that respect. The asking price may or may not reflect a bond balance.

The developer lists the prices of all new houses on their web site without including the bond costs.

If this this is the case they are violating all the principals of appraisal regulating bodies. The bond is part of total consideration for the house. Should also be included in determining the total consideration for comps. This premise is very strange. I suspect real estate professionals love it as it mis states the purchase price so that bond homes seem to be a better buy and therefore easier to sell. Someone !statistical evidence ---please.

[Packer Fan]

Not true. The interest portion of your bond payment is not deductible. It is a non-ad valorem payment, not based on the specific value of your house, not the same as mortgage interest, and it is not deductible. It is also why the county provides a separate accounting on your tax bill for ad valorem and non-ad valorem payments. The bond interest is included in the non-ad valorem section of the tax bill. This is the IRS and the TurboTax interpretation of the Federal tax laws. But, you can deduct anything you want as long as you don't get audited.

You are partially correct - However what everyone misses here is that it IS deductible if your property is a rental. There is some dispute if you take this as depreciation or as a yearly expense even then. :)

[Packer Fan]

For some odd reason, when looking at properties sellers try to make some crazy differential between the two. "Oh, that is not the price of the property, that is the price of the BOND".

Um, no. You dont get the one with out the other. So, anyone with conscious thought would add them together in the "total price".

It would be analogous to a car sales person not including tires/wheels "with" the car - rather making them a separate line item.

Attn: Real Estate Professionals who try to make it seem like they are not part of the cost of a property...bond fee's are.

When I am looking at properties to buy in the Villages (I am starting to look for another property to rent), I always look at the bond balance and add it to the price. That is how I compare. Only people who don't understand the bond would not consider it. This is YUGE dollars we are talking about here, and it is at a much higher interest rate then a typical mortgage.

As a separate issue - these must be the same people who do not understand the cost of moving and move to the villages and move 3 times after they are here- that is EXPENSIVE!!! yikes.

[Jim 9922]

When I am looking at properties to buy in the Villages (I am starting to look for another property to rent), I always look at the bond balance and add it to the price. That is how I compare. Only people who don't understand the bond would not consider it. This is YUGE dollars we are talking about here, and it is at a much higher interest rate then a typical mortgage.

As a separate issue - these must be the same people who do not understand the cost of moving and move to the villages and move 3 times after they are here- that is EXPENSIVE!!! yikes.



Correct on both points. I guess fools and their money are easily parted!:jester:

[Bogie Shooter]

Who you callin a fool?:laugh:

[Boilerman]

Using the amortization table for District 10, Unit 193, the bond payment is a little over $1700 per year for 30 years. For 2017 that breaks out at $334.98 for principal, $1267.66 for interest and $109.58 for administration cost. Just like a mortgage, the interest paid way exceeds the principal in the first nearly 20 years of the bond payments.

Over the thirty years a person would pay $22,534.28 for principal, $25,520.36 for interest, and $3,285.79 for administration cost for a total of $51,340.52.

Those are the numbers to consider whether to pay off the bond taking into consideration the interest is not tax deductible. If a person wants to deduct the interest, it might be better to take out a home equity loan and pay it off over time if the house is a "forever" home. A paid off bond in a new area will not be recouped if a person sells the house in the first few years.

Thanks. Since I don't own a home yet there, I was looking for a typical annual cost for a bond in my price range. Sometimes you see the bond balance listed in a for-sale listing but I've never seen the annual bond payment listed.

[jagdl]

It is advisable to carry the bond for a few years even if you think you just bought a forever home. Things change. Once you are here for a while you may find better options. Many people are in their second home for various reasons.

Here comes the bond part. The home value does not include the bond. A 200,000 home is not a 220,000 home because the bond is paid. Banks don't appraise high er. This forces all buyers to be able to pay that extra money up front in cash.

It is hard to explain to new buyers why the house is priced 20,000 over market value in a real estate ad.

We bought one part time home and one forever home....and sold them both. Thank heaven we held off paying the bond on both.

[kstew43]

Thanks. Since I don't own a home yet there, I was looking for a typical annual cost for a bond in my price range. Sometimes you see the bond balance listed in a for-sale listing but I've never seen the annual bond payment listed.

go to the county tax assessor site...put in the address and all the information on that home will be in black and white.

Price, yearly bond payment..maintance fees, everthing you need to know..

except the bond balance. the realtor can tell you that by asking the seller.

[VillagerNut]

If this this is the case they are violating all the principals of appraisal regulating bodies. The bond is part of total consideration for the house. Should also be included in determining the total consideration for comps. This premise is very strange. I suspect real estate professionals love it as it mis states the purchase price so that bond homes seem to be a better buy and therefore easier to sell. Someone !statistical evidence ---please.

Please feel free to contact any appraiser that you would like to contact here in the area. You will find that no appraiser will take into account that a bond is paid off or has a $50,000 bond. It is part of the tax bill so it has no part in an appraisal. Do buyers look at the fact that a bond is paid off versus a higher bond? Absolutely! But location, what is behind the house like another house or privacy, where the interior walls are at & the list price should normally be the biggest factors when purchasing a home here. When it should come in the play is if you are down to three homes and you cannot decide which one to purchase then you may look at the remaining Bond balance to decide. But overall the person that asked about a $300,000 home, the easiest way to think about it is the newer the House, the higher the CDD bond and the CDD maintenance amounts on your tax bill. Plus sometimes you will find homes where the folks have paid the bond off. Yes our real estate market is extremely different than any other market in the United States. It is up to the owner of the house to decide when or if to pay off the bond!

[Sandtrap328]

Please feel free to contact any appraiser that you would like to contact here in the area. You will find that no appraiser will take into account that a bond is paid off or has a $50,000 bond. It is part of the tax bill so it has no part in an appraisal. Do buyers look at the fact that a bond is paid off versus a higher bond? Absolutely! But location, what is behind the house like another house or privacy, where the interior walls are at & the list price should normally be the biggest factors when purchasing a home here. When it should come in the play is if you are down to three homes and you cannot decide which one to purchase then you may look at the remaining Bond balance to decide. But overall the person that asked about a $300,000 home, the easiest way to think about it is the newer the House, the higher the CDD bond and the CDD maintenance amounts on your tax bill. Plus sometimes you will find homes where the folks have paid the bond off. Yes our real estate market is extremely different than any other market in the United States. It is up to the owner of the house to decide when or if to pay off the bond!

Excellent post!

[Challenger]

Please feel free to contact any appraiser that you would like to contact here in the area. You will find that no appraiser will take into account that a bond is paid off or has a $50,000 bond. It is part of the tax bill so it has no part in an appraisal. Do buyers look at the fact that a bond is paid off versus a higher bond? Absolutely! But location, what is behind the house like another house or privacy, where the interior walls are at & the list price should normally be the biggest factors when purchasing a home here. When it should come in the play is if you are down to three homes and you cannot decide which one to purchase then you may look at the remaining Bond balance to decide. But overall the person that asked about a $300,000 home, the easiest way to think about it is the newer the House, the higher the CDD bond and the CDD maintenance amounts on your tax bill. Plus sometimes you will find homes where the folks have paid the bond off. Yes our real estate market is extremely different than any other market in the United States. It is up to the owner of the house to decide when or if to pay off the bond!

The fact is that the remaining Bond is , if fact, a part of the total consideration paid for the house. It is not a tax. It is a lien on the home. If you have a choice between two identical units each priced at $200,000, and one with a remaining bond of $10,000, the total purchase price of the unit with the bond is, in fact $10,000 more. The decision to or not to pay off the Bond is a separate and unrelated consideration. Too many buyers in TV are confused or misled on this issue (IMHO)

[biker1]

If someone is considering two homes, one with and one without a bond, and they are initiating a mortgage, then the comparison is easy. Compare the monthly payments and add in the monthly cost of the bond to the house with the bond remaining. Most people look at the price of the home when they should be looking at the monthly costs. If you are paying cash for the house then the comparison may be a bit different.

If this this is the case they are violating all the principals of appraisal regulating bodies. The bond is part of total consideration for the house. Should also be included in determining the total consideration for comps. This premise is very strange. I suspect real estate professionals love it as it mis states the purchase price so that bond homes seem to be a better buy and therefore easier to sell. Someone !statistical evidence ---please.

[Challenger]

If someone is considering two homes, one with and one without a bond, and they are initiating a mortgage, then the comparison is easy. Compare the monthly payments and add in the monthly cost of the bond to the house with the bond remaining. Most people look at the price of the home when they should be looking at the monthly costs. If you are paying cash for the house then the comparison may be a bit different.

Agreed- but the total price is still the aggregate of the purchase price and the assumption of any remaining outstanding liens on the property.

I have found that many of the "professionals" selling RE in TV, even those employed by the developer often misstate the facts relating to the financial significance of the "BOND"

[biker1]

Agreed.

Agreed- but the total price is still the aggregate of the purchase price and the assumption of any remaining outstanding liens on the property.

I have found that many of the "professionals" selling RE in TV, even those employed by the developer often misstate the facts relating to the financial significance of the "BOND"

[pauld315]

I, as a buyer, always consider the bond. I prefer looking at homes with no bond or a very small bond (less than 2000)

[rustyp]

What a bunch of non sense. What's my house worth with or without a bond? Go to a car dealer and see what's the first question they ask. Do you have a trade in? Ever wonder why they ask that question? When I was buying a house it took about 30 seconds for me to figure out identical houses differed in price by the amount of today's bond payout amount.

[twoplanekid]

It’s interesting that when you finance, the bond is not included in the appraised value of the house. So, the approved loan amount from the bank and the monthly payments don’t include a bond payment. With bank help you pay the owner/developer the purchase price and then are automatically approved or somehow assumed to be a good risk to pay off the bond. Does anyone else know of a similar bond situation in another location in the US that is treated in this manner?

[Bogie Shooter]

Why does it really matter?

[Challenger]

It’s interesting that when you finance, the bond is not included in the appraised value of the house. So, the approved loan amount from the bank and the monthly payments don’t include a bond payment. With bank help you pay the owner/developer the purchase price and then are automatically approved or somehow assumed to be a good risk to pay off the bond. Does anyone else know of a similar bond situation in another location in the US that is treated in this manner?

The bond is a superior lien against the house. It has nothing to do with the value of the property. An appraisal values the property without regard to this lien. The value is the value with or without the bond.
The cost of the property ,on the other hand, is the purchase price paid plus the total of outstanding and unpaid liens , in these cases the Bond.

Total consideration for a house with$200,000 price and a $10,00 bond is $210,000 without regard to the appraised value.
Since the Bond debt runs with the property , there is no approval process needed. In priority it is superior to the mortgage debt.

[willbush]

We noticed most payments early on was on interest so we paid ours off as we don't plan to move and are very happy not paying someone interest.

[biker1]

I checked our amortization schedule. Here are some details at 10 years:

Original Bond Amt: $23,483
Balance After 10 years: $19,042
Payments for 10 years: $16,167
Principle Paid after 10 years: $4,441
Administrative Charges paid after 10 years: $970
Interest paid after 10 years: $10,756



We noticed most payments early on was on interest so we paid ours off as we don't plan to move and are very happy not paying someone interest.

[OhioBuckeye]

If I've got this figured right, I've paid on my bond now for 5 yrs. & I still owe for 25 more yrs. I pay $2,000. a yr. on my bond, so that means I still owe $50,000. To pay that off a lot of people just don't have that kind of money lying around. Also to pay your bond off all at once would mean to me your house would be worth $50,000. more than you paid for it. So if you sell it, that would be great for the buyer but a loss for you. Am I thinking right?:shocked:

[biker1]

Not exactly. If you pay off your bond you will only pay off the remaining principle. Your $50K number includes principle, interest, and an administrative fee for the remaining 25 years.

If I've got this figured right, I've paid on my bond now for 5 yrs. & I still owe for 25 more yrs. I pay $2,000. a yr. on my bond, so that means I still owe $50,000. To pay that off a lot of people just don't have that kind of money lying around. Also to pay your bond off all at once would mean to me your house would be worth $50,000. more than you paid for it. So if you sell it, that would be great for the buyer but a loss for you. Am I thinking right?:shocked:

[Sandtrap328]

If I've got this figured right, I've paid on my bond now for 5 yrs. & I still owe for 25 more yrs. I pay $2,000. a yr. on my bond, so that means I still owe $50,000. To pay that off a lot of people just don't have that kind of money lying around. Also to pay your bond off all at once would mean to me your house would be worth $50,000. more than you paid for it. So if you sell it, that would be great for the buyer but a loss for you. Am I thinking right?:shocked:

One technique some people down here use is to take out a home equity loan for the amount of their bond. They pay off the bond. The interest on the home equity loan is tax deductble - at this time - but that could change. The interest is also lower on a home equity loan.

[OhioBuckeye]

Not exactly. If you pay off your bond you will only pay off the remaining principle. Your $50K number includes principle, interest, and an administrative fee for the remaining 25 years.

biker1, wait you lost me. What principle & what interest are you talking about. My home is paid for. I thought Bond was for Village up keep. Not saying you're wrong, but to me that's just another way for the Villages to get extra money from you from each person for 30 yrs. Anyway you look at it it's extra money out of our pockets & into there's. Sorry if I don't quite understand it but it just doesn't seem right that we keep paying The Villages a pay check every year. But thanks for explaining it!

[biker1]

The bond has a dollar value that is typically amortized over 30 years. Typical values for the bonds for new Designer Homes is about $24K. It varies with location and when the home is built. The bond value for you home can be found on the districtgov.org website. During that 30 years, you will be paying principle and interest and an administrative charge. The bond represents your portion of the infrastructure that has been installed. In other parts of the country, the infrastructure costs are part of the house price. Here they are a separate cost.

Whether your bond is paid off or not, there is also a "maintenance" charge of typically around $500/year and it varies by CDD. This money is used for maintenance of the common areas.

On you tax bill, you will see your property taxes, the bond payment (if you haven't paid if off), and the CDD maintenance fee.

I recommend you take the CDD introduction class that is offered regularly by The Villages.

biker1, wait you lost me. What principle & what interest are you talking about. My home is paid for. I thought Bond was for Village up keep. Not saying you're wrong, but to me that's just another way for the Villages to get extra money from you from each person for 30 yrs. Anyway you look at it it's extra money out of our pockets & into there's. Sorry if I don't quite understand it but it just doesn't seem right that we keep paying The Villages a pay check every year. But thanks for explaining it!

[fastboat]

Take out a home equity loan and pay off the bond. At least then you can write off the interest and usually pay the damn thing off sooner if you're planning on staying where you're at.

[THUNDERCHIEF]

Do not pay the bond off --- pass the balance to the next homeowner when you sell

[dewilson58]

Do not pay the bond off --- pass the balance to the next homeowner when you sell

But I'm in the majority, I'm not selling.......what wisdom do you have??