Bond Issue

[dmorhome]

Have you really sat down and figured out what that bond is actually costing you, If you don't pay it right away.It won't put a smile on your face that's for sure. at 6.96 % interest
That $21,000 will cost you :bigbow: over $50,000.

:bigbow:

[billethkid]

Have you really sat down and figured out what that bond is actually costing you, If you don't pay it right away.It won't put a smile on your face that's for sure. at 6.96 % interest
That $21,000 will cost you :bigbow: over $50,000.

:bigbow:

The answer may be they do not expect to outlive the life of the bond.

[karostay]

Anything with interest I payoff ASAP better off in my pocket not theirs

[Kenswing]

Since I don't live in The Villages yet and am still learning all the ins and outs about how everything works, couldn't you just refinance the loan at a better rate or are you locked into that rate? I know if I had a rate like that with today's available cheap money I would be finding a way to pay it off.

[DARFAP]

Check your property taxes. The bond is paid as an ad valorum with your taxes. It is not part of your financed mortgage payment. There is no interest on it.

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[twoplanekid]

Check your property taxes. The bond is paid as an ad valorum with your taxes. It is not part of your financed mortgage payment. There is no interest on it.

Sent from my SM-G960U using Tapatalk:shocked:

There is interest on the bond! Let's take a look - > https://www.districtgov.org/departments/Finance/amortization/Sumter/District%2010/S10%20-%20Unit%20192.pdf

[Carla B]

:shocked:

There is interest on the bond! Let's take a look - > https://www.districtgov.org/departments/Finance/amortization/Sumter/District%2010/S10%20-%20Unit%20192.pdf

Not only interest, but an administrative fee.

[blueash]

The bond is not going to be refinanced as it was taken out by the Morse family's corporation(s)/CDD's to finance the building of the infrastructure. There is no incentive for refinancing as the bond holders are making money and there is no municipality that would benefit from the refinance as it is the homeowners paying it, not the CDD.

[bandsdavis]

I make more on my investments than I pay in interest and the admin fee. Therefore I let the investments continue to earn more and I pay the bond costs. FYI, I bought a pre-owned house, so about 5 years of the bond had already been paid.

[Barefoot]

:shocked:
There is interest on the bond! Let's take a look - > https://www.districtgov.org/departments/Finance/amortization/Sumter/District%2010/S10%20-%20Unit%20192.pdfYikes, I'm glad we paid off our bond.
It was a small amount because we bought a preowned home.

[villagetinker]

Paid ours off after about 4 years, since we could NOT deduct the interest.

[John_W]

On our CYV the bond is $14,000 and we pay $1100 a year and so far in 8 years the bond has gone down about $200 a year. So we don't go in the hole until after 13 years. I would be glad to have the problem of living 30 years to the end of my bond, that would make me 91. I guess it's good to have wishful thinking.

[EdFNJ]

Check your property taxes. The bond is paid as an ad valorum with your taxes. It is not part of your financed mortgage payment. There is no interest on it.

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Actually there is. Ours is 4.94% w/20yrs left.

[petsetc]

Think of the bond as a second mortgage that is automatically assumed by a new buyer.

If you pay it off in the first few years of ownership and you decide to sell/move, you would need to add what would be the remaining balance to your selling price to be even. That would mean you would have to sell for x dollars more than someone selling that did not pay off the bond, a tougher sell. Since most Villagers move a few times, this is a real consideration.

Also, I think if you are earning near or more than the bond interest on your investments, it makes little since to give up that liquidity to feel debt free.

Also, since it is tax time, remember that if you pay early you get to take the early pay discount on the bond too.

[petsetc]

!!!

[Challenger]

So many totally erroneous posts on this issue . Readers beware on this one

[retiredguy123]

Check your property taxes. The bond is paid as an ad valorum with your taxes. It is not part of your financed mortgage payment. There is no interest on it.

Sent from my SM-G960U using Tapatalk
The term "ad valorem" means "based on the value of your house". The bond is not based on the value of your house, so it appears on the "non-ad valorem" section of your tax bill. You can look up your amortization schedule on "districtgov.org". The payments include interest and an annual administration fee. If you itemize tax deductions, non of the "non-ad valorem" payments are tax deductible if your house is your primary home.

[skip0358]

Paid ours off right after we bought the house in 2009!

[Chatbrat]

Ditto, paid ours off after bought in 2011--I was taught ," interest makes rich people rich," while it keeps poor people poor"--Benjamin Franklin raved about the benefits of compound interest--learned this in elementary school

[Marathon Man]

So many totally erroneous posts on this issue . Readers beware on this one

Yep. This issue, deed restrictions, etc. This is a place for discussion, not information.

[Challenger]

Yep. This issue, deed restrictions, etc. This is a place for discussion, not information.

When stating "facts" posters should be sure that they are , in fact, "facts" . Otherwise readers , especially newbies are misled and may make costly wrong moves. Opinions ?

[billethkid]

Think of the bond as a second mortgage that is automatically assumed by a new buyer.

If you pay it off in the first few years of ownership and you decide to sell/move, you would need to add what would be the remaining balance to your selling price to be even. That would mean you would have to sell for x dollars more than someone selling that did not pay off the bond, a tougher sell. Since most Villagers move a few times, this is a real consideration.

Also, I think if you are earning near or more than the bond interest on your investments, it makes little since to give up that liquidity to feel debt free.

Also, since it is tax time, remember that if you pay early you get to take the early pay discount on the bond too.

I get the most satisfaction when I look at my bottom line. I believe one has the option to manage debt to enhance the bottom line....earning more scenario is what guides my actions.

So for me the answer is simple....my satisfaction has all to do with whatever allows me to earn and accumulate more each year.

[Bay Kid]

I paid mine off when I bought my used home. I look at this like credit card debt, bad debt. Interest with no tax write-off.

[billethkid]

Not all debt has to be "bad debt".

One example; If one has sufficient funds to pay of the 3 or 4 percent interest rate home mortgage ........do not pay off the mortgage....instead invest the same amount where one can earn 6% and better. Hence allowing a 3 or more percent interest earned each year......by keeping the mortgage.

Not a matter of right or wrong or good or bad....just a very personal and to each his own comfort choice.

[TVMayor]

Homes in Lake County never had bonds and district #1 north of 466, bonds are paid off. District #2 bonds will be paid off soon.

A tip for people looking to buy a pre-owned home.

[Challenger]

Not all debt has to be "bad debt".

One example; If one has sufficient funds to pay of the 3 or 4 percent interest rate home mortgage ........do not pay off the mortgage....instead invest the same amount where one can earn 6% and better. Hence allowing a 3 or more percent interest earned each year......by keeping the mortgage.

Not a matter of right or wrong or good or bad....just a very personal and to each his own comfort choice.

Another view- Paying off the bond is essentially an absolute guarantee of a reduction in expense equal to the interest cost. Other than USgovt debt, I know of no other absolute guaranteed return. Regardless of the claims of the issuers.

[Barefoot]

...instead invest the same amount where one can earn 6% and better. I'm curious - where do you invest that earns 6% and better?

[New Englander]

Think of the bond as a second mortgage that is automatically assumed by a new buyer.

If you pay it off in the first few years of ownership and you decide to sell/move, you would need to add what would be the remaining balance to your selling price to be even. That would mean you would have to sell for x dollars more than someone selling that did not pay off the bond, a tougher sell. Since most Villagers move a few times, this is a real consideration.

Also, I think if you are earning near or more than the bond interest on your investments, it makes little since to give up that liquidity to feel debt free.

Also, since it is tax time, remember that if you pay early you get to take the early pay discount on the bond too.

My first home purchase in TV was a pre-owned Patio Villa. I was going to pay off the bond but my villages sales agent advised me not to pay it off because of the very same reason you stated. Sure enough, two years later I bought a courtyard villa and sold the patio villa. If I had paid off the bond I would have to add that to the sale price of the home. It would have made it a very expensive Patio Villa.

[KEVIN & JOSIE]

Makes you wonder if by adding the bond to the cost of the house makes it overpriced? If the bond was added to the home price where it would be deductible, would they sell better?

[Velvet]

You pay property tax on the market value of the house. The market value is influenced by the price of the house you sell/buy it for. If the bond is paid off and it is added to the price if the house then the buyer will be paying for it in property tax. Same goes for furniture, if you increase the cost of the house because the furniture is included, or renovations etc.

[Chatbrat]

A person had mentioned that they get 6%, I have a big investment in Gabelli Utility Trust (GUT) it pays close 8% and the dividends are based on 12 month payments, but a really big benefit is it you reinvest dividends, you get a 5% market price discount--close to 13% (total)--have this stock over 25 years--double your investment close to every 7 years

By the way I just got some more stock today @ $7.16 vs $7.54 mkt price--its been working for me

[billethkid]

A person had mentioned that they get 6%, I have a big investment in Gabelli Utility Trust (GUT) it pays close 8% and the dividends are based on 12 month payments, but a really big benefit is it you reinvest dividends, you get a 5% market price discount--close to 13% (total)--have this stock over 25 years--double your investment close to every 7 years

That would be an excellent choice with significantly better return than paying off the mortgage with the same money....if one is so inclined to do so....

[dewilson58]

A person had mentioned that they get 6%, I have a big investment in Gabelli Utility Trust (GUT) it pays close 8% and the dividends are based on 12 month payments, but a really big benefit is it you reinvest dividends, you get a 5% market price discount--close to 13% (total)--have this stock over 25 years--double your investment close to every 7 years




Right, Wrong or Indifferent............I've looked at some Utility Stocks as a bond investment because of their dividend history. Sometimes not a lot of price growth, just good payment history.


GUT has a good track record...........and yes, 6% is do'able.

[Barefoot]

A person had mentioned that they get 6%, I have a big investment in Gabelli Utility Trust (GUT) it pays close 8% and the dividends are based on 12 month payments, but a really big benefit is it you reinvest dividends, you get a 5% market price discount--close to 13% (total)--have this stock over 25 years--double your investment close to every 7 yearsThanks. :thumbup:

[Goldwingnut]

The bond is not going to be refinanced as it was taken out by the Morse family's corporation(s)/CDD's to finance the building of the infrastructure. There is no incentive for refinancing as the bond holders are making money and there is no municipality that would benefit from the refinance as it is the homeowners paying it, not the CDD.

You are incorrect in this statement, the bods for districts 3 thru 8 were reissued in 2013-2104 to take advantage of lower interest rates. The homeowners still owing on the original bonds benefited by the lower rates by a lower annual payment on the reissued bonds.

Other than paying for the work provided by the Developer, the developer is basically out of the loop on the bonds that are issued and receives no benefit for either the interest or administrative fees that are charged.

[Villageswimmer]

Not only interest, but an administrative fee.


Most folks don’t look at their amortization schedule. It should also be noted that the interest rate your bond varies depending on when it was issued. Our first villa, built in 2012, carries an interest rate of 6.125%. That’s huge. This is amortized—not simple interest.

Anyone know who keeps the admin fee? Might be the bond underwriter, but I don’t know.

[Challenger]

You are incorrect in this statement, the bods for districts 3 thru 8 were reissued in 2013-2104 to take advantage of lower interest rates. The homeowners still owing on the original bonds benefited by the lower rates by a lower annual payment on the reissued bonds.

Other than paying for the work provided by the Developer, the developer is basically out of the loop on the bonds that are issued and receives no benefit for either the interest or administrative fees that are charged.

More incorrect info by unknowledgeable posters. Rampant on this thread. Thanks Goldwingnut for "facts"

[Challenger]

My first home purchase in TV was a pre-owned Patio Villa. I was going to pay off the bond but my villages sales agent advised me not to pay it off because of the very same reason you stated. Sure enough, two years later I bought a courtyard villa and sold the patio villa. If I had paid off the bond I would have to add that to the sale price of the home. It would have made it a very expensive Patio Villa.

An existing bond is considered part of the total consideration for the property. Any appraisal indicating otherwise is erroneous.

[CWGUY]

Most folks don’t look at their amortization schedule. It should also be noted that the interest rate your bond varies depending on when it was issued. Our first villa, built in 2012, carries an interest rate of 6.125%. That’s huge. This is amortized—not simple interest.

Anyone know who keeps the admin fee? Might be the bond underwriter, but I don’t know.

:) https://www.districtgov.org/departments/Finance/bond-financeFAQ.pdf page 3 says:

 Why am I paying administration fees with the bond?
The administration fees are charged to cover the expenses related to record keeping and
administrative costs.

There is a phone number listed on the bottom of the page and the heading on the page says "VCDD Finance". You could call and ask. :ho:

[vintageogauge]

I'm curious - where do you invest that earns 6% and better?

I was going to ask the same thing, most likely at some risk.

[twoplanekid]

An existing bond is considered part of the total consideration for the property. Any appraisal indicating otherwise is erroneous.

When I financed the purchase of our new house in TV in 2014, the appraisal value and the bank financing value did not include the existing bond on the house.

[manaboutown]

[/U]

When I financed the purchase of our new house in TV in 2014, the appraisal value and the bank financing value did not include the existing bond on the house.

What about your tax evaluation?

[twoplanekid]

What about your tax evaluation?

The assessed value on the Sumter County Property Appraiser site did not include the bond value.

[Love2Swim]

We didn't know if we would sell the house so we wavered on whether or not to pay off the bond, but ultimately we did. Time flies - we've been in the house 13 years now, so I'm really happy we made the decision not to pay all that interest.

[Challenger]

[/U]

When I financed the purchase of our new house in TV in 2014, the appraisal value and the bank financing value did not include the existing bond on the house.

The bond does not add to the value. It is in fact a lien, superior even to a mortgage. The value is the value. My point is that If the appraised value is $100,000 and you contract at that price ,your total consideration with a $10,000 bond is $110,000. Any salesperson who does not clearly explain this is misleading the purchaser.

If house A is priced at $100,000 with a bond of $10,000 = total consideration(all in price)is $110,000. If no bond(bond has been paid), then any purchase price up to $109,999 is a better deal.

[Bay Kid]

Not all debt has to be "bad debt".

One example; If one has sufficient funds to pay of the 3 or 4 percent interest rate home mortgage ........do not pay off the mortgage....instead invest the same amount where one can earn 6% and better. Hence allowing a 3 or more percent interest earned each year......by keeping the mortgage.

Not a matter of right or wrong or good or bad....just a very personal and to each his own comfort choice.

Stocks go up and down, but my bond debt will always be bad in my mind. That is just me. I was raised to never like any debt.

[Altavia]

Sorry if this was answered before, for two identical homes, would one with no bond sell for a higher price?

[billethkid]

A house is worth what ever price the market dictates and the buyer is willing to pay.
It is not influenced by whether there is a bond or not.
The bond of course does affect your proceeds.

To pay the bond off or not is a very personal decision based on many of life's factors/experiences.

As I usually say....to each his own without any attempt to express which is/may be right or wrong (as is done very often).

[Challenger]

Sorry if this was answered before, for two identical homes, would one with no bond sell for a higher price?

The anecdotal rumor is no. Not convinced, would like to see statistical "facts" Ten years ago when we bought new , the sales agent had no real knowledge of the Bond effect on total consideration.

[Altavia]

Thanks for the replies.

Whats the rational for why the bond isn't factored into tax value of a home if it is a liability?

[retiredguy123]

Obviously, the market value of a house represents what a potential buyer is willing to pay for it. The bond payments are part of the cost to own and live in the house. The bond is really no different from other costs of ownership, such as taxes, amenity fees, maintenance, utilities, insurance, etc. I'm not sure how other posters can say that their appraisal did not include the bond. How do they know whether the appraiser considered the bond in their appraisal? Don't they just give you a number? If anything, an unpaid bond would negatively affect the market or appraised value as compared to a similar house with no bond.

[perrjojo]

Everyone has different circumstances. Our bond in district 9 was over 7 percent. We were fortunate to have the funds and it made sense to pay it off at that interest rate. We also intended for this to be our home for the long run and so far, so good after 8 years.

[Love2Swim]

The anecdotal rumor is no. Not convinced, would like to see statistical "facts" Ten years ago when we bought new , the sales agent had no real knowledge of the Bond effect on total consideration.

I think it would depend on how financially savvy the buyers are. If they had narrowed down their choice to two homes that were quite equal, one had a bond remaining the other didn’t, it seems like you’d buy the one that did not have a bond.

[retiredguy123]

I think it would depend on how financially savvy the buyers are. If they had narrowed down their choice to two homes that were quite equal, one had a bond remaining the other didn’t, it seems like you’d buy the one that did not have a bond.
That's true. But, many buyers are not "savvy". So, as a seller, if you have not paid off the bond, you can offer the house at a lower price and a non-savvy buyer will buy it. That is the advantage of keeping the bond.

[biker1]

Ideally, the real estate agent would explain that the house without a bond (and a higher price) would have lower annual costs than the house that still has a bond. Hopefully the buyers would be savvy enough to realize there is no free lunch.

I think it would depend on how financially savvy the buyers are. If they had narrowed down their choice to two homes that were quite equal, one had a bond remaining the other didn’t, it seems like you’d buy the one that did not have a bond.

[Love2Swim]

That's true. But, many buyers are not "savvy". So, as a seller, if you have not paid off the bond, you can offer the house at a lower price and a non-savvy buyer will buy it. That is the advantage of keeping the bond.

But speaking of savvy, is the seller savvy enough to want to offer their house at a lower price to make up for the fact that they owe the bond? A lot of sellers see a house down the street offered at a certain price, and feel their house should be equally priced, irregardless of the bond. There lies the catch. I think some people have an inflated view of what their home is worth. Ultimately, the buyer needs to do some simple arithmetic, and I agree, some probably do not do so or are unable to make the best financial choice. Hopefully the real estate agent would help in that regard.

[New Englander]

That's true. But, many buyers are not "savvy". So, as a seller, if you have not paid off the bond, you can offer the house at a lower price and a non-savvy buyer will buy it. That is the advantage of keeping the bond.

:agree:

[Challenger]

But speaking of savvy, is the seller savvy enough to want to offer their house at a lower price to make up for the fact that they owe the bond? A lot of sellers see a house down the street offered at a certain price, and feel their house should be equally priced, irregardless of the bond. There lies the catch. I think some people have an inflated view of what their home is worth. Ultimately, the buyer needs to do some simple arithmetic, and I agree, some probably do not do so or are unable to make the best financial choice. Hopefully the real estate agent would help in that regard.

Real estate sales people, in my experience , use this ignorance on the part of the buyer, to benefit their sales effort , sometimes one way and other times in the opposite way. Anyone who buys a home at a contract price of $250,000 with an existing bond of $15,000, is in fact paying $265000. Regardless of the spin of the salesperson.

[Challenger]

I think it would depend on how financially savvy the buyers are. If they had narrowed down their choice to two homes that were quite equal, one had a bond remaining the other didn’t, it seems like you’d buy the one that did not have a bond.

Unfortunately, most salespersons will not clearly cover this point and in many cases do not understand the finance issues themselves. This is not a new phenomena , but has been going on for years.

[graciegirl]

That's true. But, many buyers are not "savvy". So, as a seller, if you have not paid off the bond, you can offer the house at a lower price and a non-savvy buyer will buy it. That is the advantage of keeping the bond.

That is how we think. Our first home was paid for here. This one is too. We can't imagine leaving it, but always poised for the next step. We didn't pay off our bond for that reason.

[Tom C]

I have ALWAYS SAID that the bond amount should be ADDED to the asking price. That is the ONLY WAY to compare apples to apples when looking.

When we purchased a home, the bond was 100% paid off. As a prudent buyer, ALWAYS DISCOUNT THE OFFER by at least the amount of the bond (then additionally whatever you feel is prudent to make the offer remain attractive to the seller).

Be an educated buyer or be a sorry buyer - your choice.

[Dond1959]

I have ALWAYS SAID that the bond amount should be ADDED to the asking price. That is the ONLY WAY to compare apples to apples when looking.

When we purchased a home, the bond was 100% paid off. As a prudent buyer, ALWAYS DISCOUNT THE OFFER by at least the amount of the bond (then additionally whatever you feel is prudent to make the offer remain attractive to the seller).

Be an educated buyer or be a sorry buyer - your choice.

Say I am a seller and selling my home for $300k with a $20k bond. You come in and offer $280k, in the current market your offer would be rejected without a counter offer. Prices on real estate are supply and demand. Right now the sellers rule and bonds are part of most home purchases. As a buyer you can request to see only homes with no bonds, but that could limit location and home type.

The most reasonable advice I have seen on bonds is to not pay them off right away in case you decide to move. If you pay it off and then move you will never get the bond value back in the sales price.

[Tom C]

Say I am a seller and selling my home for $300k with a $20k bond. You come in and offer $280k, in the current market your offer would be rejected without a counter offer. Prices on real estate are supply and demand. Right now the sellers rule and bonds are part of most home purchases. As a buyer you can request to see only homes with no bonds, but that could limit location and home type.

The most reasonable advice I have seen on bonds is to not pay them off right away in case you decide to move. If you pay it off and then move you will never get the bond value back in the sales price.

You are correct, if the buyer is emotional about the purchase. Plus, as you point out - It is a sellers market, so offers need to be thought out.

What I am saying is that buyers, when comparing homes for sale, they need to know the whole story about what they are buying. The bond can be a big part of that decision and they should not be blind to it.

Buyers should NOT rush into any purchase (and it should not be driven by emotion). This is a BIG DECISION. I looked for more than 18 months and made a good purchase, even in a sellers market.

Be sure, as a buyer, that one is making a good decision for YOU. There are LOTS of homes for sale. The right one will come around in time.

[Topspinmo]

Yep. This issue, deed restrictions, etc. This is a place for discussion, not information.

Bottom line, they don’t want you to pay it off. They quadruple double the original cost. I’d you pay it off, they lose money and you have more money. No loan is in You’re best interest:1rotfl:

[Challenger]

Bottom line, they don’t want you to pay it off. They quadruple double the original cost. I’d you pay it off, they lose money and you have more money. No loan is in You’re best interest:1rotfl:

Who is the they that you are referring too. The developer does not own the bonds.

[hifred123]

The developer collects the interest and the administration fees on the bonds. Our interest on our bond (we live in Charlotte - unit 196) is $1,174.13 and the administration fee is $97.59. The actual bond payment is $354.78. That is highway robbery. How was this interest rate determined? We just bought our home in August you can bet I am paying off the bond before July to avoid having to pay any more interest to The Villages.

[hifred123]

The interest on the bond over the 30 years is double the cost of the actual bond and the administrative fee is also costly. So if you have the money to pay off the bond I can't see not doing it.

[Goldwingnut]

The developer collects the interest and the administration fees on the bonds. Our interest on our bond (we live in Charlotte - unit 196) is $1,174.13 and the administration fee is $97.59. The actual bond payment is $354.78. That is highway robbery. How was this interest rate determined? We just bought our home in August you can bet I am paying off the bond before July to avoid having to pay any more interest to The Villages.

The developer has no interest in the bond or the collection of the bond assessments. Their interest ended when the construction efforts ended and they were paid for their infrastructure work.

These bonds are managed by the respective CDDs, in your case CDD-9. The bond rates were established by the underwriters when the bonds were issued and it is just like a loan you take out on a car or your home. The P&I paid are determined by the amortization schedule, with the interest paid each year decreasing as the principal decreases each year. Check your mortgage amortization schedule if you have one and you will see it looks the same.

You are not paying interest to The Villages, you are paying it to the bond holders. You may actually have some of these bonds in your investment portfolio.

If you have specific questions about you bond contact the Finance Department at 352-753-0421.

Since you're new to The Villages I highly recommend you attend the Resident Academy. It is a 5 hour class held once per quarter and is free. Go to the districtgov.org to sign up. The class covers may of the areas that new residents, like yourself, do not understand about how and why the community runs as it does. It is time well spent.

[Challenger]

The developer collects the interest and the administration fees on the bonds. Our interest on our bond (we live in Charlotte - unit 196) is $1,174.13 and the administration fee is $97.59. The actual bond payment is $354.78. That is highway robbery. How was this interest rate determined? We just bought our home in August you can bet I am paying off the bond before July to avoid having to pay any more interest to The Villages.

Bond principal and interest goes to bond holders ,not to the developer. The bonds were sold to investors. Get your facts straight before passing erroneous info.

[biker1]

Your interest rate is just shy of 7%. This is nearly twice the current 30 year mortgage rate. The bond is amortized just like a 30 year mortgage so it is front loaded with interest. After 10 years, you will have paid a total of about $16K and about $3K of that will have gone to principal. The administrative fee alone is nearly $1K for those 10 years. Since none of this is an ad valorem tax, it is non deductible on your federal taxes. The future value of the money, if invested, notwithstanding, if you will be in your house 10 years it is probably worth paying off the bond because you will wind up paying the money one way or another. If you pay off the bond, take the annual savings and dollar cost average it back into equities.


The developer collects the interest and the administration fees on the bonds. Our interest on our bond (we live in Charlotte - unit 196) is $1,174.13 and the administration fee is $97.59. The actual bond payment is $354.78. That is highway robbery. How was this interest rate determined? We just bought our home in August you can bet I am paying off the bond before July to avoid having to pay any more interest to The Villages.

[Altavia]

How does inflation factor into this decision?

[Goldwingnut]

How does inflation factor into this decision?

It doesn't, the bond rates are fixed.

[Ben Franklin]

It's easy to find out what your bond amortization is, and the interest rate on your bond. Go here and look up your village or villas: Bond Amortization Schedules (https://www.districtgov.org/departments/Finance/amortization.aspx)

[Altavia]

...

[Challenger]

Read posts by TomC and Goldwingnut on this thread. Two posters who know what they are talking about.

So many posts by people who have no understanding of the transaction giving advice that could be financially damaging to those seeking understanding. Happens far too often on TOTV generally.

[New Englander]

The developer has no interest in the bond or the collection of the bond assessments. Their interest ended when the construction efforts ended and they were paid for their infrastructure work.

These bonds are managed by the respective CDDs, in your case CDD-9. The bond rates were established by the underwriters when the bonds were issued and it is just like a loan you take out on a car or your home. The P&I paid are determined by the amortization schedule, with the interest paid each year decreasing as the principal decreases each year. Check your mortgage amortization schedule if you have one and you will see it looks the same.

You are not paying interest to The Villages, you are paying it to the bond holders. You may actually have some of these bonds in your investment portfolio.

If you have specific questions about you bond contact the Finance Department at 352-753-0421.

Since you're new to The Villages I highly recommend you attend the Resident Academy. It is a 5 hour class held once per quarter and is free. Go to the districtgov.org to sign up. The class covers may of the areas that new residents, like yourself, do not understand about how and why the community runs as it does. It is time well spent.

You are a real asset to this forum. :ho:

[M2inOR]

I appreciate the useful info posted. Using a bond to finance infrastructure is better that burying the cost into the home value as it's done in other jurisdictions.

Out here in Oregon, those system development costs are hidden in the selling price of a home, and stay with the home forever. New starter homes here in the Portland Metro area start at $400K, with yards that make TV yards seem big.

For my new home purchased in Marsh Bend, the bond was quite clear, and the amortization easy to understand. The interest rate on the bond seems fair, too. Nice to have the option to pay it off at any time.

[graciegirl]

Originally Posted by Goldwingnut
The developer has no interest in the bond or the collection of the bond assessments. Their interest ended when the construction efforts ended and they were paid for their infrastructure work.

These bonds are managed by the respective CDDs, in your case CDD-9. The bond rates were established by the underwriters when the bonds were issued and it is just like a loan you take out on a car or your home. The P&I paid are determined by the amortization schedule, with the interest paid each year decreasing as the principal decreases each year. Check your mortgage amortization schedule if you have one and you will see it looks the same.

You are not paying interest to The Villages, you are paying it to the bond holders. You may actually have some of these bonds in your investment portfolio.

If you have specific questions about you bond contact the Finance Department at 352-753-0421.

Since you're new to The Villages I highly recommend you attend the Resident Academy. It is a 5 hour class held once per quarter and is free. Go to the districtgov.org to sign up. The class covers may of the areas that new residents, like yourself, do not understand about how and why the community runs as it does. It is time well spent.

[Viperguy]

Debt bad, Pay it off. You are getting ripped off. Only thing to consider is if you are planning to sell in a few years. Not us....done moving!
If you can't afford the total, get a home equity loan with a lower interest and pay it off. JMHO.

[willbush]

Yep, we figured that out the first time we got our taxes;paid it off immediately ane have enjoyed the savinging since 2010

[hifred123]

My husband and I attended the resident academy with the presentation given by Mr. Rohan and there was an additional talk on how to save water when sprinkling your lawn. They did not mention bonds and who the interest is paid to. This might be a good slide to add to the presentation. I would like to be an investor and buy some of these bonds. It is hard to make this type of interest. Does anyone know where I can buy these bonds. I want to get rich quick (LOL).

[Michiganders]

I called about getting bond at a lower interest rate & was told the developer is only one that can apply for a lower interest rate after 10 years. We got a good rate for our mortgage but are paying almost double interest on bond. You definately are paying interest on bond. We are paying high bonds & now hit with huge increase in taxes for massive Village expansion & seem to have no say in anything.

[retiredguy123]

Some posters have said that the interest rate on the bonds is 7 percent, but it depends on when your bond was originated. My bond was originated in 2015, and the interest rate is only 4.3 percent.

[Goldwingnut]

My husband and I attended the resident academy with the presentation given by Mr. Rohan and there was an additional talk on how to save water when sprinkling your lawn. They did not mention bonds and who the interest is paid to. This might be a good slide to add to the presentation. I would like to be an investor and buy some of these bonds. It is hard to make this type of interest. Does anyone know where I can buy these bonds. I want to get rich quick (LOL).

If John Rohan was the primary speaker then you were probably attending the CDD Orientation held on Thursdays at Lake Sumter Landing. The Resident Academy is a much more detailed presentation and is given only once a quarter, last about 5 hours, and has about 250 PowerPoint slides in the presentation. Far more detailed than CDD Orientation.

[villages07]

My husband and I attended the resident academy with the presentation given by Mr. Rohan and there was an additional talk on how to save water when sprinkling your lawn. They did not mention bonds and who the interest is paid to. This might be a good slide to add to the presentation. I would like to be an investor and buy some of these bonds. It is hard to make this type of interest. Does anyone know where I can buy these bonds. I want to get rich quick (LOL).


Not to get too far off topic...I have owned various Villages CDD and Utility bonds for 10 years. They are a good tax-free investment.


When they are initially offered, big institutional investors gobble them up at par value (like the 7% in CDD 9 and 10). Eventually, some come up for resale on the secondary market. The price you pay may be adjusted to reflect current market values. Those 7% bonds might cost you 117 so your effective yield is closer to 4% which is more the going rate. The initial rate is guaranteed for 10 years at which time the issuer (the CDD) can call them in and refinance them at the going rate...which has been done for CDD 5,6,7 and probably 8.



A good reseller is FMS Bonds out of Boca Raton. Edie Nasello, 1-800-367-2663.


To tie back in to the OP, the Developer sets up the initial financing but then the CDD manages the flow in and out from there. The CDD makes the decision to refinance them and lower your bond cost after year 10, if market conditions indicate it is prudent to do so.

[Chateau]

The decision to pay off your bond should be based on a number of factors.
Are your investments earning (long term basis) more than the interest rate on the bond? If yes don’t pay
How long do you intend on hanging on to your home? A short time frame generally implies the bond should not be paid.

[Altavia]

Some posters have said that the interest rate on the bonds is 7 percent, but it depends on when your bond was originated. My bond was originated in 2015, and the interest rate is only 4.3 percent.

2016 Bond Interest was 3.9%

https://www.districtgov.org/departments/Finance/amortization/Sumter/District%2012/S12%20-%20Unit%201F.pdf

2018 Bond Interest is 4.3%

https://www.districtgov.org/departments/Finance/amortization/Sumter/District%2012/S12%20-%20Unit%20740%20Cliff%20Villas.pdf

[lwmilo]

Any idea why is there is a maintenance fee when the bond is paid off? What are they maintaining.? Love to hear a reply.....besides they can..

[VApeople]

Any idea why is there is a maintenance fee when the bond is paid off?

We paid off our bond last year and we did not see any bond 'maintenance fee' on our new tax bill.

[Goldwingnut]

Any idea why is there is a maintenance fee when the bond is paid off? What are they maintaining.? Love to hear a reply.....besides they can..

Watch this video for an explanation of the maintenance assessment.

The Villages 6-19-19 Construction Update and Maintenance Assessment discussion. - YouTube (https://youtu.be/Ufm_ycOnbto)

Bottom line is that the Bond paid for the infrastructure to be built and the maintenance assessment pays to maintain some of the infrastructure and keep the community looking nice.

[Goldwingnut]

We paid off our bond last year and we did not see any bond 'maintenance fee' on our new tax bill.

Look at the bottom of the tax bill, you will see your annual maintenance assessment listed. Most are between $300 and $600 annually depending on your unit and CDD.

[VApeople]

Look at the bottom of the tax bill, you will see your annual maintenance assessment listed. Most are between $300 and $600 annually depending on your unit and CDD.

Yeah, I see we have a 'maintenance fee' of $526, but I don't think that has anything to do with the bond.

[spatz111048]

Barefoot, you make a great point. That is why I decided not to pay off my bond.

[OhioBuckeye]

Yikes, I'm glad we paid off our bond.
It was not a large amount because we bought a preowned home.

There's another comment here that says you're not paying interest & they're laid out the payments. I don't know what's going on because we don't live in TV anymore. I made yearly payments because I looked at it this way. You pay Bonds fees yearly & if you pay it off right away it's like paying $20,000 more for your house, but in may case we only live there 7 yrs. & save about $13,000. I guess it's only how you think about it!:ho:

[dewilson58]

Look at the bottom of the tax bill, you will see your annual maintenance assessment listed. Most are between $300 and $600 annually depending on your unit and CDD.




It's the top of the range significantly higher than $600 ???


Thanks.

[Goldwingnut]

It's the top of the range significantly higher than $600 ???


Thanks.

I just looked at CDD-10 and only 3 or 4 communities were above $600 and these were premier communities, as expected based on how it is determined.

Looking at CDD12 the rates are higher with many in the $600 range and few in the $700. This is to be expected in the new areas as there is a higher ratio of open/green spaces and ponds to be maintained than in areas north of SR44, so higher costs and higher assessments.

In both cases the value for what is paid is pretty good. The pill that's hard to swallow is the Willdwood property taxes that the area south of SR44 is paying, about double their maintenance assessments and they get very little for their money. But this is a topic for a different thread.

[dewilson58]

I just looked at CDD-10 and only 3 or 4 communities were above $600 and these were premier communities, as expected based on how it is determined.

Looking at CDD12 the rates are higher with many in the $600 range and few in the $700. This is to be expected in the new areas as there is a higher ratio of open/green spaces and ponds to be maintained than in areas north of SR44, so higher costs and higher assessments.

In both cases the value for what is paid is pretty good. The pill that's hard to swallow is the Willdwood property taxes that the area south of SR44 is paying, about double their maintenance assessments and they get very little for their money. But this is a topic for a different thread.




I heard ~$1600 on premiers.

[Bogie Shooter]

Yeah, I see we have a 'maintenance fee' of $526, but I don't think that has anything to do with the bond.

You are right in your thinking.....it’s a maintenance fee on the infrastructure.

[Judy n Ron]

We almost didn't buy the day we did, not because of the bond but because they couldn't (or wouldn't) confirm the interest rate. When I got up to walk out, they suddenly made a few calls and came up with 6 point something %. (2011). We decided to pay it off ASAP as we have no mortgage or any other debt we carry. My only complaint was having to wait 7 months before we were "allowed" to pay it off.

[perrjojo]

Let’s assume I pay off my bond...sell my home for 315,000 because my bond was 15,000. You do not pay your bond and live in your home for 3 years. You ask 300,000 for an equivalent home. I still pay approximately the same 315,000 for both homes because I am assuming your bond loan and the principal on the bond is not much in the first years. It’s really pay me now or pay me latter. Basically I am paying the same price for the home minus a small principal reduction on the bond.

[Aces4]

Let’s assume I pay off my bond...sell my home for 315,000 because my bond was 15,000. You do not pay your bond and live in your home for 3 years. You ask 300,000 for an equivalent home. I still pay approximately the same 315,000 for both homes because I am assuming your bond loan and the principal on the bond is not much in the first years. It’s really pay me now or pay me latter. Basically I am paying the same price for the home minus a small principal reduction on the bond.

Pay me later with a large interest payout in between.

Living debt free is a real plus, stock market bombing downward does not affect your investment in your home. Most people here are getting a little long in the tooth to wait for a recovery which indicaters say may be nasty this next recession. All depends on your bankroll and tolerance for financial loss.

[Altavia]

Let’s assume I pay off my bond...sell my home for 315,000 because my bond was 15,000. You do not pay your bond and live in your home for 3 years. You ask 300,000 for an equivalent home. I still pay approximately the same 315,000 for both homes because I am assuming your bond loan and the principal on the bond is not much in the first years. It’s really pay me now or pay me latter. Basically I am paying the same price for the home minus a small principal reduction on the bond.

Is there any evidence having a bond affects sell price in today's market?

[perrjojo]

Pay me later with a large interest payout in between.

Living debt free is a real plus, stock market bombing downward does not affect your investment in your home. Most people here are getting a little long in the tooth to wait for a recovery which indicaters say may be nasty this next recession. All depends on your bankroll and tolerance for financial loss.

Perhaps I should have stated pay me more later. :). To me it really depends on whether you have the available funds to pay it off. That was our choice but it’s not always possible for everyone.

[perrjojo]

Is there any evidence having a bond affects sell price in today's market?

I really don’t know but I would consider the paid bond a plus.

[Barefoot]

I really don’t know but I would consider the paid bond a plus.I would consider a paid bond a plus also!
If it came down to two houses, I'd pick the one with the bond paid.

It's important to me to live debt free, but it may not be important to most people.
Because we bought a resale on a golf course, our bond was relatively small.

[New Adventures]

Well yes, of course! So what is our alternative? Move out? It is what it is. I prefer to enjoy my final years not worrying about this stuff. Been there, done that...and I've had quite enough! Smile folks! The sun will still come up again tomorrow!