Bond Pymt?

[gingin410]

This is our first year as residents and we know there's a bond pymt coming due. Please advise us as to approximately when the bill will arrive and a ballpark guesstimate as to what the amount will be.

[Bogie Shooter]

Bonds
The purpose of the bond is to recover the costs of the infrastructure (sewer, water, streets, electric, cable, etc.) in your section. The bond is calculated based on the cost of the infrastructure for that section divided by the number of houses in the section. The annual amount of the bond payoff will be part of your property tax bill. I am pretty sure that the bond is a 30 year bond at 7% interest. It is like a 30 year mortgage. The bonds are fairly high south of 466. The bond goes down very little each year as most of the payment goes to interest. Be very sure to cover the bond, bond payment, length of the bond interest rate and payoff options with your sales rep or realtor. If you are buying a pre-owned property, be sure to find out how much is left on the bond.

[villages07]

Gin,

Bogie provided a lot of good info. If you bought new in the past year, your bond interest is probably less than 6%. Depending on whether you are in a villa, designer, premier, or ranch your bond balance could vary from $13K to $40K. For a designer, your annual bond payment is probably somewhere between 1,000-1,500. In addition, each of us pays the annual CDD maintenance fee as part of our tax bill. This is approx 400-500/year and is paid whether you have paid off the bond or not. Both of these fees are collected along with your property taxes. Bills come out in Oct'ish with early payment option (and 4% discount) by Nov 30. Not 'fully' due until Mar 31 of following year (but no discount then).

[MMC24]

We paid the bond off when we purchased our home. I know that there has been other threads on the Bond issue and many feel paying the bond outright is not the correct thing to do BUT there is a certain "peace-of-mind" knowing our only house payment is taxes and insurance.

[downeaster]

We paid the bond off when we purchased our home. I know that there has been other threads on the Bond issue and many feel paying the bond outright is not the correct thing to do BUT there is a certain "peace-of-mind" knowing our only house payment is taxes and insurance.

We have paid ours off too.

[golfnut]

As long as you plan to stay in your house about 10 years plus paying off the bond makes sense............IMHO............GN

[Peggy D]

If not paying off the bond, wouldn't it make sense to get a home loan to pay it off?

Interest is less and can be used as a tax deduction.

We are considering this.

[Barefoot]

We paid the bond off when we purchased our home. I know that there has been other threads on the Bond issue and many feel paying the bond outright is not the correct thing to do BUT there is a certain "peace-of-mind" knowing our only house payment is taxes and insurance.

I think that your "peace-of-mind" comment is bang on. I totally agree.

[downeaster]

If not paying off the bond, wouldn't it make sense to get a home loan to pay it off?

Interest is less and can be used as a tax deduction.

We are considering this.

It is certainly worth considering, Peggy. In most cases paying it off with a home equity loan makes a lot of sense. A while ago I checked and the bond interest was 6.5% and home equity loan 4.5%. Even if one does not itemize they benefit by making the loan to pay otf off.

[allairenjadea]

We also thought about a home equity loan to pay off the bond but the downside to that is if something unforseen happens and you have to sell you will be paying off the bond from your funds for the new owners. Like many others have said stay in your home for a few years and when you decide it's the place you want to stay in then explore options to pay it off.

[Boomer]

When we visited TV to have a first look, I was aware of the real estate market changes elsewhere, but they had not hit TV at that point. I knew we would not buy on the first go-round anyway, and the bond was something completely new to me. For us this is a second home under consideration so we were not in any big hurry.

And my thoughts have gone from patio villa to historic side to a ranch and even to the idea of waiting for a fairly new bigger home to come up for sale after somebody else has done the upgrades and ironed out anything that might have needed ironing out. (No. I am not Sybil.) And we will return to rent again and see where that leads. Owning two is a serious decision for us, especially since we do not plan to use a second home as a rental. We need to spend more time in TV as renters so we know how and what and where it could best work. And we will.

But there is something that I am wondering about the bond. And that is whether those owners who have paid it off and then wanted or needed to sell expect to recoup the cost of the bond in the sales price? I would think that might be difficult to do.

But on the other hand, a paid off bond might make the house sell faster against other houses with the bond still hanging over them. And even though the recoup might not be there in dollars, it might be there in time, and time is money.

I know that this, of course, will vary from individual to individual seller as well as buyer.

We have owned a couple of homes with swimming pools. And what I found out in the sales of those is that while the entire cost of the pool might not have been literally recouped, the pools seemed to help sell the house against the competition. Of course, comparing a swimming pool to a paid off bond is a pretty lame comparison. Any buyer would be thrilled to get a paid off bond thrown in. And in Ohio a swimming pool can be more of a "Yeah, that's nice." So not a great comparison. But you get the idea. (And, of course, pools cut out some potential buyers who do not want them, at all, thrown in or not.)

But can a paid off bond be expected to pay for itself in a sale?

I guess the point is that even though I do not own a home there at this point, this is something that I look at as a potential buyer. Originally when I learned about the bond, I thought paying it off would be the way for an owner to definitely go. But as I look more closely at the ins and outs of all this and how the real estate market has seen such changes, I would think an owner would want to be really sure that they would not want or need to sell for a really long time. The wait and see approach would be my approach. But that's just me and I am not there yet.

Boomer

PS: I guess I digressed a little here from the start of the thread, but I do wonder about the expectation of a seller to hold onto ROI with bond payoff in today's market.

[coach]

Boomer,

There is not one answer for all. I think that if you have been in TV for a couple of years and don't plan to sell your home then paying off the bond is the right thing to do. I have been in TV for five years. The first two were in a patio villa and the last three in a designer. We did not pay off the patio villa because we knew we wanted a bigger house and didn't think we could recoup the bond. Once we settled into our current home for a year we knew it was going to be our home forever, so the the bond payoff made sense for us.
Also as we get older I don't like debt. I sleep better knowing that a house with no mortgage and no bond can be maintained in almost any economic situation.
Coach

[Boomer]

Boomer,

There is not one answer for all. I think that if you have been in TV for a couple of years and don't plan to sell your home then paying off the bond is the right thing to do. I have been in TV for five years. The first two were in a patio villa and the last three in a designer. We did not pay off the patio villa because we knew we wanted a bigger house and didn't think we could recoup the bond. Once we settled into our current home for a year we knew it was going to be our home forever, so the the bond payoff made sense for us.
Also as we get older I don't like debt. I sleep better knowing that a house with no mortgage and no bond can be maintained in almost any economic situation.
Coach

Hi Coach,

I completely understand what you mean on all counts. I am a real "cost of sleep" investor, too. And your plan sounds like it worked out really well for you. The patio villa gave you time to figure out where you were headed it sounds like. And not paying the bond must have made it easier for you to sell, like you knew you were going to end up doing.

If I understand it correctly, the decision to pay off the bond can be made at any time and so it does not have to be an up front decision. I think that's good. It gives a buyer the chance to settle in and really decide if it is the right home before they put out another big chunk of change for the bond. But once that home is the forever plan, that's different, and there are other things to be considered at that point. And like you said, one answer does not fit all.

I am, for now, just looking at this from the angle of a potential buyer, and I know that if we were making an offer on a home with a paid bond that I would not want to pay more for it than for a comparable home with an unpaid bond. Sure it would be nice to buy a pre-owned with the bond paid, but not something that I would be likely to pay a premium for. I know that the fact that this would not be our only home makes a big difference in how I view things.

I also want to say that I very much appreciate the input that I find in these threads about buying in TV. So thank you to all. (This is the kind of thread that first brought me to TOTV. I knew there had to be wonderful, first-hand, practical info somewhere on the internet about TV and so I googled and I googled until I found TOTV.)

Boomer