bond

[billlaur]

could someone explain itand how it works, t.y.

[aln]

Try this for an explanation

http://activerain.com/blogsview/1484237/the-villages-florida-what-do-these-things-mean-cdd-bond-maintenance-and-amenities-fees-at-this-active-adult-community-

[foxmeadow]

I saw it somewhere in previous posts..........a website to look up the bond payoff figures. Does anyone know or remember??

[downeaster]

I saw it somewhere in previous posts..........a website to look up the bond payoff figures. Does anyone know or remember??


Try here http://www.districtgov.org/search/SearchResults.aspx?keyword=bond

[downeaster]

Try here http://www.districtgov.org/search/SearchResults.aspx?keyword=bond

Once you get to the above website call the number here,

Finance Department
3201 Wedgewood Lane
The Villages, FL 32162

Phone: 352-753-0421
Fax: 352-751-3901

[foxmeadow]

Once you get to the above website call the number here,

Finance Department
3201 Wedgewood Lane
The Villages, FL 32162

Phone: 352-753-0421
Fax: 352-751-3901

Thank you much downeaster for your help.

[JohnN]

Bond is a clever way to add to the cost of the home for infrastructure and services, but billed separately from the price/mortgage, basically.

[GuyWin]

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.

[Indy-Guy]

I would sign up for the 30 year pay out plan if I can get the guarantee that I will live 30 more years here in my home in The Villages.

[herbaru]

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.

[downeaster]

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.

I am not certain most people suggest not paying off the bond. It has been discussed in great detail here in past threads. The consensus seems to be it is an individual matter. What is good for the goose is not always what is good for the gander. We paid ours off. We don't like debt. Not everyone is financially able to come up with the money. Others want to pay it off so it won't be a factor if they choose to sell their house. It is not always a question of the "math" factor although I felt the interest rate was more than I wanted to be saddled with.

[Army Guy]

herbaru, downeaster pretty much it. It is a personel choice, in that some say don't pay it off cause you may move within TV. Then have a new one to pay and that you can't get the price you pay for the bond most times added to your selling price of your old home.
We are also of the mind set and believers in "Dave Ramsy" in that debt is bad and you should live debt free if at all possible. So having saved up the money this past year since we bought, this summer we will pay our bond in full also.

Army Guy

[otherbruddaDarrell]

All the more reason we purchased a courtyard villa that we could afford without having a mortgage or a bond.
Too many people want to have bigger and better and then wonder where all the money went.:bowdown:

[Army Guy]

Agree totally OBD. Plus figured as we get older we may not be able to take care of something big.

Army Guy

[snowbird1898]

Some very good information as to knowing more about the Bond. Sure beats the "makes no difference" the Realtors tell you

[golfnut]

i'm with ya on this one obd and ag, why take on more than ya need...gn

[graciegirl]

could someone explain itand how it works, t.y.

The bond is simply a cost for the infrastructure, the roads, swimming pools, tennis courts, and pool tables that is not added to the cost of your home like it is up north.

For instance. If you buy a designer that costs about $220,000, then the bond is about $20,000, For a smaller villa, or a ranch it would be less and for a larger designer or a premier it would be more.

On new houses you have the full bond, the full cost. On some older homes it has been paid down on paid off. You can choose to pay it off completely or to make payments over a period of time.

So if you think that a Camellia which is about 2000 square feet actual cost is $240K rather than $220K than it is easier to figure out.

[brostholder]

herbaru, downeaster pretty much it. It is a personel choice, in that some say don't pay it off cause you may move within TV. Then have a new one to pay and that you can't get the price you pay for the bond most times added to your selling price of your old home.
We are also of the mind set and believers in "Dave Ramsy" in that debt is bad and you should live debt free if at all possible. So having saved up the money this past year since we bought, this summer we will pay our bond in full also.

Army Guy
I agree! As new residents, we intend to live in our CYV for a few years to see how our finances go and to see if we can happily adjust to the downsize. I figure if our investments are still doing ok in a few years and we feel a bit cramped in the CYV, then we can upsize within the villages. For that reason, I am not going to pay my bond off because I would then wind up paying 2 bonds if I buy another home.

[bkcunningham1]

For what it is worth, I found this blog from a realtor who deals with TV and I think it is very helpful in understanding bond and other issues in TV. I think the information is correct. If someone reads it and disagrees, enlighten me please.

In her blog, she states why realtors don't recommend paying off the bond, "We do not recommend paying the bond off. The main reason is the fact we cannot resell your home for X amount higher than other homes that are on the market at that point just because you paid the bond off."

http://activerain.com/blogsview/1484237/the-villages-florida-what-do-these-things-mean-cdd-bond-maintenance-and-amenities-fees-at-this-active-adult-community-

[Russ_Boston]

One correction:

In our particular unit (for example mine is #164) we have all designer homes. Some are larger lots, some are cul-de-sac lots, some are golf course lots, some are standard interior lots. Some homes are 1500sq ft. some are 2200 sq feet. But we all pay the same new bond fee (about 23k). It is not based on size of house or lot.

Other units are similar. That is why the villa units are in units of their own.

Basically the infrastructure costs in that unit are divided by the total number of parcels in that unit. Everyone in the unit pays the same.

This is all described in detail: Link: http://www.districtgov.org/howDoI/PayBond.aspx

[Tom Hannon]

Well described Russ and accurate. But what else should be expected from you. As you said, my lot also 164-72 is in a culd-da-sac and the house is 1961 sq. feet. My bond is also $23,000. For those who are not aware Russ and I live within walking distance.

[rjm1cc]

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.

Using simple math you would pay the bond off as soon as you can. The reason is you are earning a lot less interest on your investments than you are paying on the bond.

However, if your income is all coming from pensions then you might not have the funds to allocate to paying off the bond and you will prefer to pay it off as you receive your income. Remember you want to keep some of your assets for an emergency as getting a loan maybe difficult.

How long you intend to keep the house may also influence the decision but I have not given any consideration to this. Maybe someone else has.

[Pturner]

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.



Similar argument can be made for whether to take a mortgage on a home. Say you buy a $250,000 home, pay $50,000 down and mortgage $200,000 for 30 years at 4.75 percent. In 30 years, you've paid $175,586 in interest and a total of $425,586 for the house, including the down payment (but not taxes and fees).

But maybe you don't plan to live there for 30 years or maybe you can afford the payments but not a lump sum to pay cash for the house.

Most of us, in our working years, took a mortgage. In retirement years, many of us do not. Costs, individual plans and circumstances and individual values factor into each family's decision. So there is not a good one-size-fits-all answer.

[Minnesotalyn]

Tom & Russ, Our lot is in Unit 162 and our paperwork estimates our bond at 24,500 and that's on a 240,00 Iris. I like yours better.:undecided:

[Tom Hannon]

Hi Minnesota

I have an Iris also. And a large piece of property. Why is your bond higher? Russ and I live in Buttonwood.

[Russ_Boston]

Hi Minnesota

I have an Iris also. And a large piece of property. Why is your bond higher? Russ and I live in Buttonwood.

Each unit is separate. It depends on the density of the unit. See my link for an explanation.

[Minnesotalyn]

Looking at our paperwork we (Unit 162) has 74 lots, and our Maintenance Assessment is estimated at 700.00 a year

[Minnesotalyn]

Sorry that's in Buttonwood between the neighborhood pool & Fishhawk Rec Center.

[Tom Hannon]

I can walk to the neighborhood pool and rec center. I am one block in on Buttonwood Run and Triggerfish

[Kelsie52]

We are also in Buttonwood --South of St Caharles --next to the models Section 157 ---our bond is 19,400 ---

[Tom Hannon]

Wonder why the bond price are different?

[Russ_Boston]

Read the link in my post above.

Each parcel in a unit pays the same. Other units are a different price based on density of the unit.

[Kelsie52]

Wonder why the bond price are different?


Russ is correct as usual --our Unit has 166 designers --the yearly maintance is a little over 700 biut due to the denisity ,the bond is shared over all the l;ots no matter the size or location

[actor]

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.


does anyone know if all that interest is tax deductable?

[Kelsie52]

Not on the bond ...

[getdul981]

Not on the bond ...

"And there's the rub"

[aljetmet]

Don't pay off the bond and you pay 7.2% for 30 years

Get a 30 year mortgage to pay off the bond for less than 5% and it's tax deductible. I think you save money taking this choice for how long you own your home. When it comes time to sell I would market my home to make sure prospective buyers are aware of the value you have with a bond free home.

Either choice it's still a loan that has to be paid. So for those folks who have a bond to pay and who think they are debt free you're really not....

[Rosalie]

Regarding a 30-year mortgage to pay the bond: do you mean a home equity or "second mortgage?"

[Pturner]

Regarding a 30-year mortgage to pay the bond: do you mean a home equity or "second mortgage?"

You could use the primary mortgage if you could borrow enough to pay the bond at closing and/or reducing your loan down payment.

This is easier said than done however, because a lending institution might only loan 80 percent of the lending institution's appraised value of the home, and require a 20 percent down payment.

[JimJoe]

For what it is worth, I found this blog from a realtor who deals with TV and I think it is very helpful in understanding bond and other issues in TV. I think the information is correct. If someone reads it and disagrees, enlighten me please.

In her blog, she states why realtors don't recommend paying off the bond, "We do not recommend paying the bond off. The main reason is the fact we cannot resell your home for X amount higher than other homes that are on the market at that point just because you paid the bond off."

http://activerain.com/blogsview/1484237/the-villages-florida-what-do-these-things-mean-cdd-bond-maintenance-and-amenities-fees-at-this-active-adult-community-

Why can't they resell your home for X amount higher than other homes that are on the market at that point just because you paid off the bond? That makes no sense at all. Do they not tell customers about the outstanding bond on the homes not paid off? Do they not make it clear to buyers before an offer is written that there is an unpaid bond that increases the cost of the home? If they do not, that is wrong.

Personally I think this bond on your home thing is an unfortunate negative in TV, with negative connotations that I will not list here because many of them have been listed in previous links.

[Sherman931]

I understand the bond and what it it is for (infastructure). My position is that I view it as a form of property tax (taxes in TV are lower than what I currently pay) that I will have to pay it each year. I suppose if I had $20K to burn I might pay it off and let my heirs figure out how to price the house if they choose to sell it.

[aljetmet]

You could use the primary mortgage if you could borrow enough to pay the bond at closing and/or reducing your loan down payment.

This is easier said than done however, because a lending institution might only loan 80 percent of the lending institution's appraised value of the home, and require a 20 percent down payment.

Very astute of you for this caveat. However, most TVers have big down payments, or have the means to pay in full. I would venture to say for most this would not be a problem but of course everyone has their own financial situation.
If for a frog that did not payoff originally their is always other options such as a home equity but that has risk as rates will go up. To get a mortgage for the first time just for the bond however may not be prudent either as the cost of the mortgage origination is something to consider. I guess I make my recommendation based on of 30 mortgage rates that are currently way below 5%. So, if you plan on borrowing for the home might as well finance the bond as well.

[batman911]

Does anyone except me think that 7% interest is a little high considering what banks currently pay for deposits. Who collects the interest payment?

[villages07]

The coupon on current bonds is closer to 5.25%; In the boom years when interest rates were higher, some of the infrastructure bonds were issued at 6.5%. Then Sumter county tacks on a service/processing fee each year to collect the payments from homeowners (before turning over the funds to the CDD to pay off the bondholders). This makes your payback rate a little higher.

CDD Bonds will always be 'priced' higher than mortgage rates because they represent (theoretically) a riskier investment than a secured home mortgage.

Actually, I've bought some of the earlier CDD infrastructure bonds as investments on the bond resale market. Some have sold below the 100 par value to boost the yield. I have bonds yielding (based on my cost) between 5.5 and 7%, tax-free. Give what I know about The Villages and the CDD government structure, I feel these are a safe investment. Not sure I would buy the recreational bonds that are in dispute with the IRS.

To the latest question, the interest on the bonds is paid to the bondholders (investors).

[downeaster]

For what it is worth, I found this blog from a realtor who deals with TV and I think it is very helpful in understanding bond and other issues in TV. I think the information is correct. If someone reads it and disagrees, enlighten me please.

In her blog, she states why realtors don't recommend paying off the bond, "We do not recommend paying the bond off. The main reason is the fact becauswe cannot resell your home for X amount higher than other homes that are on the market at that point just e you paid the bond off."

http://activerain.com/blogsview/1484237/the-villages-florida-what-do-these-things-mean-cdd-bond-maintenance-and-amenities-fees-at-this-active-adult-community-

If I were selling my home and the Realtor told me "we cannot resell your home for X amount higher than other homes that are on the market at that point just e you paid the bond off." I would look for another Realtor.

There is a lot of confusion and misunderstanding about the bond issue among those of us who live here. So, I presume it is even more confusing for for the first time buyers. If I were to put my house up for sale I would advertise it as "BOND PAID" then I wouldn't have to announce, "By the way, my selling price does not include an extra $XX,XXX.XX".

Any Realtor worth his/her salt should be able to handle the sale of a home whether or not the bond is paid off.

[784caroline]

I have to agree with the realtor that dollar for dollar its easier to sell a house that does NOT have the bond paid off...why..the house is simply cheaper! Most new people comming to the villages donot understand the bond concept to begin with but they do understand a homes asking/selling price.

It could be easier to sell a resale home that has the bond paid off BUT I doubt it very much if the owner of that house is going to get the full cost of the bond added to a comparable home selling price. IN other words, seller paid off a $20,000 he/she would NOT get on top of a comparable sales price. The seller of the house would lose money if the bond was paid for it would become a negotiating point not the object of the sale. In addition, it would be difficult to get an appraisal that would include the $20K over the real price of the house for the appraisal a bank or lender wants only looks at the neighborhood, style and sq footage of the house..It does not consider if Furniture or a golf cart is included, or if the bond is paid!! The bond we pay is a cost of Ownership..just like paying a utility bill...its not part of the purchase price of a home.

I was always told when you first buy donot pay off your bond even if you can afford to do it for at least 3-5 years after you know this is the house for you and you plan to stay in that particualr house. Once you made that decision to stay put, paying off the bond, if you are so inclided to do so, is a no brainer especailly in today financial markets. I would really listen to the realtors words from the previous post..others may tell you something else but we are stilll in a price driven market.

[downeaster]

.

I was always told when you first buy donot pay off your bond even if you can afford to do it for at least 3-5 years after you know this is the house for you and you plan to stay in that particualr house. Once you made that decision to stay put, paying off the bond, if you are so inclided to do so, is a no brainer especailly in today financial markets.

My post was too general and I stand corrected. I agree with caroline as quoted above.