Villages Bond Refinancing

[alan.kleeman]

I’m currently paying 6% interest on my Bond payment.Refinancing rates for homes are currently averaging 3% for a 15 year loan according to BankRate. I called the District office and was told they only look at interest rate changes on Bonds on the 10th anniversary of the Bond. We are currently paying more in interest in the lifetime of the Bond than Principal. I can’t remember this being brought up in the past but if there is enough ground swell within the community maybe the Villages will change the policy and save us residents a great deal of money. I know if no other home lending businesses getting 6% interest at this time.

[champion6]

You have a personal option ... get a home equity loan and pay off the bond.

[bagboy]

If you pay off your bond, you don't pay interest. You can refinance to get enough to pay the bond or you can get a home equity loan/credit line which interest is still a tax deduction .

[vintageogauge]

You have a personal option ... get a home equity loan and pay off the bond.

But keep in mind the equity loan will not follow the transfer of your deed if you sell your home. You will have to pay it off and you will not necessarily get your bond payoff back when selling your home as you will have to price it that much higher than the comps that have recently sold or are for sale, many buyers will not even take that into consideration.

[Decadeofdave]

Rates will soon be zero % or close to it.

[tophcfa]

Rates will soon be zero % or close to it.

They will be at or near zero on what we earn on our investments, not on the cost of borrowing.

[Aces4]

But keep in mind the equity loan will not follow the transfer of your deed if you sell your home. You will have to pay it off and you will not necessarily get your bond payoff back when selling your home as you will have to price it that much higher than the comps that have recently sold or are for sale, many buyers will not even take that into consideration.

I’ve heard this stated over and over. If one sells their home by owner, one will hear the purchasers comments and yes, we paid off the bond and totally recouped the the cost. It’s one of the first questions asked by the interested parties, is the bond paid off?

[Challenger]

But keep in mind the equity loan will not follow the transfer of your deed if you sell your home. You will have to pay it off and you will not necessarily get your bond payoff back when selling your home as you will have to price it that much higher than the comps that have recently sold or are for sale, many buyers will not even take that into consideration.

However, the total consideration for your home , paid by the buyer, is the Sales price plus the remaining bond balance. Sounds like "six of one and a half dozen of the other"

[vintageogauge]

However, the total consideration for your home , paid by the buyer, is the Sales price plus the remaining bond balance. Sounds like "six of one and a half dozen of the other"

It is not always a consideration and when it is it's doubtful that the seller will recover the full payoff. Sometimes it's only good for the buyer but not so good for the seller, other times it will work out.

[PJ_Smiley]

It is definitely a selling point that the bond is paid. We sold our home “by Owner.” It was a major plus to potential buyers that the $18,000 bond was paid off. I believe it made the house an easier sell. We considered it when pricing the house. We also considered the 6% realtor commission. The buyer got a break on the selling price (lower by a portion of the 6% commission we did not have to pay) and the buyer did not get saddled with $18,000 of additional debt at 5%-6% interest for the next 25 years.

[Challenger]

It is not always a consideration and when it is it's doubtful that the seller will recover the full payoff. Sometimes it's only good for the buyer but not so good for the seller, other times it will work out.

Show me the stats that support this concept .

[kaseydog]

even if you pay off bond you still incur a yearly maintenance fee. were these bonds financed through citizens bank? as i understand it
citizens is owned by morse family.

[Challenger]

even if you pay off bond you still incur a yearly maintenance fee. were these bonds financed through citizens bank? as i understand it
citizens is owned by morse family.

no matter how infrastructure was paid for, there is still a need to pay for maintenance no matter where in the world a development exists. Even if The Family didn't develop it.

[Challenger]

It is definitely a selling point that the bond is paid. We sold our home “by Owner.” It was a major plus to potential buyers that the $18,000 bond was paid off. I believe it made the house an easier sell. We considered it when pricing the house. We also considered the 6% realtor commission. The buyer got a break on the selling price (lower by a portion of the 6% commission we did not have to pay) and the buyer did not get saddled with $18,000 of additional debt at 5%-6% interest for the next 25 years.
Finally a rational statement on a subject so misunderstood in The Villages.

[Goldwingnut]

even if you pay off bond you still incur a yearly maintenance fee. were these bonds financed through citizens bank? as i understand it
citizens is owned by morse family.

These bonds have absolutely nothing to do with Citizen First Bank, these are commercial bonds sold to investors. They are also not a mortgage and can't be compared to one in terms of "refinancing". If I recall from the bond sales for the Amenity purchase in 2016, Chase bank was the financial institution to issue the bonds.

In these bonds, since they are investment vehicles, there are many limitations on reissuance of the bonds built into the bonds to protect both the buyers and the sellers. Remember these were 30 year fixed rate bonds the buyers purchased to make a given return on their investment.

In the past when the windows for reissuing (refinancing) the bonds opened, AND if the market was favorable, these bonds were reissued and the homeowners paying them saw the savings in their annual tax bill. Bonds for CDD3 though CDD8 were reissued in 2012, 2013, 2016 and 2016 to recognize such savings to the residents. A quick check of these bond rates indicates:
2010 bonds=4.817%
2012 bonds=2.784%
2013 bonds=4.25% to 4.94%
2015 bonds=4.25%
2016 bonds=3.35%.

None are at the OP's stated 6%, but then I didn't check every bond's rate only a sampling from each CDD.

Yes, on a 30 year at almost any interest rate above 2.4% will result in paying more interest than principal. If there is a service fee paid to the bond manager, as there always is, then the apparent amount paid on the bond at any given rate is still higher.

As many have already said, if you are unhappy with it you can either refinance it or pay the bond off.

One last thought, if it were not for the bond system allowed under Florida Law, the Villages would not be the community it is today. These bonds made and make it possible for the developer to invest their money in Rec Centers, golf courses, etc. instead of sewer pipes, electrical systems, roads, etc. This is to our benefit as well as theirs. You would pay for the infrastructure one way or the other, either it would be rolled into the cost of the house or as a separate line item as a bond.

[noslices1]

Simple, go get a 3% mortgage for the amount of your bond and pay it off.

[dsnrbec]

Several posters have said they recovered the cost of the bond payoff when they sold. My concern would be a potential buyer who was planning to get a mortgage which would trigger an appraisal. If a seller has done any significant improvements and paid off their bond, it would be hard for an appraiser to give them the value they need after looking at comparables. You might be ok if you’ve owned your home for a long time but if not, you will be disappointed.

[Ginsanders]

Just a note, bonds are not allowed in Lake County. One of the many reasons we bought in the northern part of The Villages. No bond applicable.

[VApeople]

2016 bonds=3.35%.


We closed on our house in Sept 2016 and were told our bond interest rate was 6%.

[wine5465]

Great explanation! Obviously

[mydavid]

After 16 years I still owe $4,000 on my bond costing me just shy of $700 a year on my taxes a year, time to pay this thing off

[rlcooper70]

Who do you believe is getting the 6% interest rate. Yes you and I are "paying" it but who do you think is profiting?

[Taylor32162]

If you pay off your bond, you don't pay interest. You can refinance to get enough to pay the bond or you can get a home equity loan/credit line which interest is still a tax deduction .

Interest is only tax deductible f the money is used for home improvements.

[MandoMan]

Several posters have said they recovered the cost of the bond payoff when they sold. My concern would be a potential buyer who was planning to get a mortgage which would trigger an appraisal. If a seller has done any significant improvements and paid off their bond, it would be hard for an appraiser to give them the value they need after looking at comparables. You might be ok if you’ve owned your home for a long time but if not, you will be disappointed.

I paid full price on a 22 year old home, without dickering, because the bond had been paid and it had a brand new roof, HVAC system, and kitchen appliances. Those are major cash outlays I won’t need to lay out.

[wilkinson]

You can refinance your home at 3% to pay off the 6% bond - hope that upsets the 6% bond holder :-)

[wilkinson]

Can you take that interest as a deduction if you take the standard deduction?

[VApeople]

Who do you believe is getting the 6% interest rate.

The people who put up the money and were told the return would be 6%.

Yes you and I are "paying" it but who do you think is profiting?

Same answer. The people who put up the money and were told the return would be 6%.

They were pretty smart investors.

[VApeople]

Can you take that interest as a deduction if you take the standard deduction?

Of course not. You can only deduct interest if you itemize deductions.

Based on what I have read in other posts, even if you itemize deductions, I do not think the interest on the bond is deductible.

[champion6]

Just a note, bonds are not allowed in Lake County. One of the many reasons we bought in the northern part of The Villages. No bond applicable.This is no longer true!

The villages of Pine Hills and Pine Ridge are in Lake County and the homes have a bond.

The correct statement is that there is no bond on the homes in Lady Lake - the villages of Country Club Hills, Orange Blossom Gardens, Silver Lake, Del Mar, El Cortez, La Reynalda, La Zamora, Mira Mesa, Valle Verde.

[jonathanb]

Best thing to do is refinance your house and take enough equity out to just pay off the bond. Do you really think the district is going to lower the interest rate. Never happen.

[jonathanb]

Sellers think they recovered the bond but it’s only because their house value went up so much. The market value of your home is not affected by the bond. They wouldn’t have gotten any more even if the bond was paid. Although I have seen sellers get crazy amounts from buyers who were cash and not really knowledgeable. This usually happens with a FSBO.

[Chi-Town]

When buying my home a one line blurb in the sales sheet said bond paid. Not ever hearing of a house bond I thought nothing of it. So there was no value added when negotiating. Looking back I see that it was a good thing, but one should not assume it's up there with a golf car garage

[Nordy]

Very well put. Very smart person.

[wiltma]

If you pay off your bond, you don't pay interest. You can refinance to get enough to pay the bond or you can get a home equity loan/credit line which interest is still a tax deduction .

Not deductible

[wiltma]

These are two separate things. Every first owner pays an additional amount at closing that helps pay sewer pipes, electrical systems, roads, etc. This amount, about $10000 in 2004 on a courtyard villa. Second owners etc do not pay this

[limegreensaab]

Just a note, bonds are not allowed in Lake County. One of the many reasons we bought in the northern part of The Villages. No bond applicable.

Ummm. We live in lake county and have a bond ...

[Moonrunner]

And paying off your bond is not a good option because they tack on the interest for the life of the bond. Sounds like gouging on a major scale.

[davem4616]

interesting point...we're in a new normal now...perhaps the 10 year cycle is no longer appropriate

given that you obviously have energy around this I invite you to champion getting a serious number of Village signatures and presenting it to the people that actually have the power to take a look at a potential savings opportunity by rewriting the bond rates earlier

[davem4616]

Just a note, bonds are not allowed in Lake County. One of the many reasons we bought in the northern part of The Villages. No bond applicable.


Fake news

who ever told you that bonds are not allowed in Lake County didn't have the correct information.

We live in the Village of Pine Hills (which is in Lake County) we have a bond on the property, as does a cousin who lives one street over and another cousin that lives in the villages of Pine Ridge (also in Lake County).

[Goldwingnut]

So let's try to deal with facts here, I did some digging on the interest rates currently being paid on the bonds. These are shown below.

There are 3 bond issues with interest rates of 6% or higher, their issue dates are 2010 and 2011, the 2010 bonds are only this year at a point of being able to be reissued, the 2011 will be eligible next year. All the bonds are issued at market rates at the time of issue, trying to compare these rates to current mortgage rates is an apples-oranges comparison, they are completely different products with completely different basis. These bonds have requirements, conditions, and regulations associated with them that protect both the investors and those who are paying off the bonds, changing these is highly unlikely, no matter how many people decides to stand in a corner and scream and pout like a 3 year old.

The 2010 CDD8, 2016 CDD4, and CDD9-12 bonds are all original issue. All of those before these in CDD3 thorough 8 have been reissued and resident bond assessments have been reduced accordingly.

Will the 2010 bonds be reissued? Hard to say with the current market. What I can tell you is that I have worked with the Assistant District Manager Kenny Blocker, who is responsible for these efforts since he came on-board a 3 years ago and he is very aggressive at pursuing these the bond issues to get the residents a better rate. If it can be done, he can and will do it. Many thousand have already been saved by residents through the bond reissues over the last decade.

The developer gets ZERO of this, the District governments get ZERO of this, the residents gain everything from these reissues.

Before jumping in with uneducated comments one should learn the FACTS.

CDD Bond Interest Rate
1- No bonds- Paid Off
2- No bonds- Paid Off
3- 2013- 2.748%
4- 2010- 4.817%
4- 2012- 4.810%
4- 2016- 3.35%
5- 2013A- 4.73%
5- 2013B- 4.73%
6- 2013- 4.94%
6- 2017- 4.25%
7- 2015- 4.25%
8- 2018- 3.95%
8- 2010- 6.125%
8- 2010- 6.125%
9- 2011- 6.963%
9- 2012- 5.507%
9- 2016- 5.15%
10- 2012- 5.153%
10- 2014- 5.992%
11- 2014- 4.464%
12- 2016- 3.90%
12- 2018- 4.33%
12- 2019- 6.607%

[bilcon]

When I sold my first house, I did not have to pay off the bond. The new owner had to take over the payment of the balance of the bond.

[Aces4]

Sellers think they recovered the bond but it’s only because their house value went up so much. The market value of your home is not affected by the bond. They wouldn’t have gotten any more even if the bond was paid. Although I have seen sellers get crazy amounts from buyers who were cash and not really knowledgeable. This usually happens with a FSBO.

Wrong. Buyers are quite knowledgeable and a well maintained home here will command the additional recovery of the bond being paid off. Savvy FSBO individuals are extremely aware of market values here. Plus, one needs to consider all of the interest not paid out of pocket from the time of payoff.

[Aces4]

Several posters have said they recovered the cost of the bond payoff when they sold. My concern would be a potential buyer who was planning to get a mortgage which would trigger an appraisal. If a seller has done any significant improvements and paid off their bond, it would be hard for an appraiser to give them the value they need after looking at comparables. You might be ok if you’ve owned your home for a long time but if not, you will be disappointed.

It was no problem at all. But then again, our bond was under $20,000.

[villagetinker]

And paying off your bond is not a good option because they tack on the interest for the life of the bond. Sounds like gouging on a major scale.

Not true, the only reason you need to call for the "payoff amount" is that the interest is calculated to the specific date of the payoff, NOT 20 years or more in the future. We paid ours off after 5 years, it was just slightly different from the previously supplied escrow statement for that month. IT DID NOT have 20 years of additional interest.

[CWGUY]

So let's try to deal with facts here, I did some digging on the interest rates currently being paid on the bonds. These are shown below.

There are 3 bond issues with interest rates of 6% or higher, their issue dates are 2010 and 2011, the 2010 bonds are only this year at a point of being able to be reissued, the 2011 will be eligible next year. All the bonds are issued at market rates at the time of issue, trying to compare these rates to current mortgage rates is an apples-oranges comparison, they are completely different products with completely different basis. These bonds have requirements, conditions, and regulations associated with them that protect both the investors and those who are paying off the bonds, changing these is highly unlikely, no matter how many people decides to stand in a corner and scream and pout like a 3 year old.

The 2010 CDD8, 2016 CDD4, and CDD9-12 bonds are all original issue. All of those before these in CDD3 thorough 8 have been reissued and resident bond assessments have been reduced accordingly.

Will the 2010 bonds be reissued? Hard to say with the current market. What I can tell you is that I have worked with the Assistant District Manager Kenny Blocker, who is responsible for these efforts since he came on-board a 3 years ago and he is very aggressive at pursuing these the bond issues to get the residents a better rate. If it can be done, he can and will do it. Many thousand have already been saved by residents through the bond reissues over the last decade.

The developer gets ZERO of this, the District governments get ZERO of this, the residents gain everything from these reissues.

Before jumping in with uneducated comments one should learn the FACTS.

CDD Bond Interest Rate
1- No bonds- Paid Off
2- No bonds- Paid Off
3- 2013- 2.748%
4- 2010- 4.817%
4- 2012- 4.810%
4- 2016- 3.35%
5- 2013A- 4.73%
5- 2013B- 4.73%
6- 2013- 4.94%
6- 2017- 4.25%
7- 2015- 4.25%
8- 2018- 3.95%
8- 2010- 6.125%
8- 2010- 6.125%
9- 2011- 6.963%
9- 2012- 5.507%
9- 2016- 5.15%
10- 2012- 5.153%
10- 2014- 5.992%
11- 2014- 4.464%
12- 2016- 3.90%
12- 2018- 4.33%
12- 2019- 6.607%

Not true, the only reason you need to call for the "payoff amount" is that the interest is calculated to the specific date of the payoff, NOT 20 years or more in the future. We paid ours off after 5 years, it was just slightly different from the previously supplied escrow statement for that month. IT DID NOT have 20 years of additional interest.

:ohdear: Boy you guys with the "FACTS" really take the fun out of BITCHING! :1rotfl::1rotfl::1rotfl:

[Bogie Shooter]

even if you pay off bond you still incur a yearly maintenance fee. were these bonds financed through citizens bank? as i understand it
citizens is owned by morse family.

Nice try!

[Bogie Shooter]

We closed on our house in Sept 2016 and were told our bond interest rate was 6%.

So, was it true what you were told?

[Bogie Shooter]

Best thing to do is refinance your house and take enough equity out to just pay off the bond. Do you really think the district is going to lower the interest rate. Never happen.

You missed post #15.

[DeafDeaf]

These bonds have absolutely nothing to do with Citizen First Bank, these are commercial bonds sold to investors. They are also not a mortgage and can't be compared to one in terms of "refinancing". If I recall from the bond sales for the Amenity purchase in 2016, Chase bank was the financial institution to issue the bonds.

In these bonds, since they are investment vehicles, there are many limitations on reissuance of the bonds built into the bonds to protect both the buyers and the sellers. Remember these were 30 year fixed rate bonds the buyers purchased to make a given return on their investment.

In the past when the windows for reissuing (refinancing) the bonds opened, AND if the market was favorable, these bonds were reissued and the homeowners paying them saw the savings in their annual tax bill. Bonds for CDD3 though CDD8 were reissued in 2012, 2013, 2016 and 2016 to recognize such savings to the residents. A quick check of these bond rates indicates:
2010 bonds=4.817%
2012 bonds=2.784%
2013 bonds=4.25% to 4.94%
2015 bonds=4.25%
2016 bonds=3.35%.

None are at the OP's stated 6%, but then I didn't check every bond's rate only a sampling from each CDD.

Yes, on a 30 year at almost any interest rate above 2.4% will result in paying more interest than principal. If there is a service fee paid to the bond manager, as there always is, then the apparent amount paid on the bond at any given rate is still higher.

As many have already said, if you are unhappy with it you can either refinance it or pay the bond off.

One last thought, if it were not for the bond system allowed under Florida Law, the Villages would not be the community it is today. These bonds made and make it possible for the developer to invest their money in Rec Centers, golf courses, etc. instead of sewer pipes, electrical systems, roads, etc. This is to our benefit as well as theirs. You would pay for the infrastructure one way or the other, either it would be rolled into the cost of the house or as a separate line item as a bond.
That is how the developer becomes a billionaire!

[thomp679]

But keep in mind the equity loan will not follow the transfer of your deed if you sell your home. You will have to pay it off and you will not necessarily get your bond payoff back when selling your home as you will have to price it that much higher than the comps that have recently sold or are for sale, many buyers will not even take that into consideration.

Great thought by the OP. I 100% agree with the issue that Vintageogauge raises.

[Challenger]

And paying off your bond is not a good option because they tack on the iWnterest for the life of the bond. Sounds like gouging on a major scale.

Wrong

[Jerseybob]

We recently purchased a home in District #1. The bond was paid off at some point by a prior homeowner.

If the bond is paid on a home like ours , is there still an "assessment" or "maintenance" fee? If so could someone please explain why or what it is?

I know there is the $159 +/-fee and that's not the fee in question. I understand that one.

Thanks for the time and knowledge!

[Goldwingnut]

We recently purchased a home in District #1. The bond was paid off at some point by a prior homeowner.

If the bond is paid on a home like ours , is there still an "assessment" or "maintenance" fee? If so could someone please explain why or what it is?

I know there is the $159 +/-fee and that's not the fee in question. I understand that one.

Thanks for the time and knowledge!

This video explains the maintenance assessment everyone pay

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

[CWGUY]

We recently purchased a home in District #1. The bond was paid off at some point by a prior homeowner.

If the bond is paid on a home like ours , is there still an "assessment" or "maintenance" fee? If so could someone please explain why or what it is?

I know there is the $159 +/-fee and that's not the fee in question. I understand that one.

Thanks for the time and knowledge!

:ohdear: The time to ask was before you signed on the line! :oops: