Bond questions

[bsloan1960]

New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
Bill

[Stu from NYC]

We moved two years ago and thought about paying off bond also about 20,000 at the time.

Two different real estate agents said do not expect to be able to add no bond to the value of your home. Since we are still not sure that we will stay in our first home here decided for now to make yearly payments/

[JohnN]

We paid the bond at closing. The interest rate at that time was 7% or so and market rates were much lower so it was an easy decision. Do what's best for your wallet.

[villagetinker]

We paid ours off after a few years, interest rates was too high.

[jchase]

We heard the Villages refinanced the bond and its now about 3 percent. Anyone else heard that?

[Laker14]

We moved two years ago and thought about paying off bond also about 20,000 at the time.

Two different real estate agents said do not expect to be able to add no bond to the value of your home. Since we are still not sure that we will stay in our first home here decided for now to make yearly payments/

and yet, they ALWAYS include that in the sales description if it is paid off.

[retiredguy123]

and yet, they ALWAYS include that in the sales description if it is paid off.
It's a selling point, but you don't get a price increase that is equal to the paid off bond.

[petsetc]

Think of the bond as a (second) mortgage.

Then think of paying off the bond as something that probably can't be recovered in full if you decide to move/sell.

Realize that the touted number of moves within The Villages is around 3.

My advice is to not pay-off the bond, at least not until you are sure this is where you want to be and the house you picked is your forever house. We have owned our house for 7+ years and I still would not pay off the bond.

Other considerations are: You should be able to earn enough by investing the money (admittedly not this week) and by not paying off the bond you have access to that much cash.

JMHO

[Stu from NYC]

and yet, they ALWAYS include that in the sales description if it is paid off.

That they do. Figure we will give it another two years or so and if we still think we will be here for some years will pay it off.

[retiredguy123]

Think of the bond as a (second) mortgage.

Then think of paying off the bond as something that probably can't be recovered in full if you decide to move/sell.

Realize that the touted number of moves within The Villages is around 3.

My advice is to not pay-off the bond, at least not until you are sure this is where you want to be and the house you picked is your forever house. We have owned our house for 7+ years and I still would not pay off the bond.

Other considerations are: You should be able to earn enough by investing the money (admittedly not this week) and by not paying off the bond you have access to that much cash.

JMHO
I agree with not paying off the bond. But, when you pay off a second mortgage, you always get your money back, dollar for dollar. It has no effect on what the buyer pays you for the house. When you pay off the bond, you need to hope that you can sell the house for enough extra money to recover the amount of the bond that you paid off. That is why it makes sense to not pay off the bond.

[Chi-Town]

Coming from a place without bonds the no bond meant nothing in bidding. It was put in the description like it was an afterthought.

[Papa_lecki]

We heard the Villages refinanced the bond and its now about 3 percent. Anyone else heard that?

I think each district has its own bond - The Villages doesn’t refinance it, the district does. Did your payment go down? I would think that is something you would be told via a letter, not the internet

[Bill14564]

We heard the Villages refinanced the bond and its now about 3 percent. Anyone else heard that?

For my unit, the interest is now down to 3.05% and my payment dropped from $1,474 to $1,288.

You can find the current information on districtgov.org. I happened to have saved a copy of the old information.

[brianherlihy]

pay it off/ we have moved 6 times and if the bond is knot payed off we take it off the price

[Bill14564]

We paid off our bond. We calculated the break-even point to be about seven years (YMMV). We felt we would be in this house long enough that we would save money by not paying 8+ years of interest.

Some would argue that with a 3% interest rate you will be better off by investing the money. That's a good theory and sometimes it works to your advantage. However, if we had invested that $18,000 we would have something like $14,000 today and still have a bond payment due. Given what we are seeing today, we are happy with the choice we made.

[dewilson58]

Some would argue that with a 3% interest

PLUS Admin Fee....................the effective rate is not that good.

[Bill14564]

PLUS Admin Fee....................the effective rate is not that good.

Absolutely! I forgot the fixed admin fee which raises the effective rate. It looks like that went down be $3 also.

Interesting: I can't seem to figure out how interest is calculated. It certainly isn't as simple as 3.05% of the previous year's balance. It isn't even as simple as 3.05% of the previous year's balance amortized monthly.

[DAVES]

New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
Bill

If, you call them they are quite helpful. There are particular days to pay it off after that day, you pay interest, if I recall it is for the 1/4 or perhaps it is semi annual.
We paid ours off. You will find endless opinions. Will recover when you sell?
Say the number is 20,000. Will you recover say landscaping etc. You will if you have a good broker who will explain the VALUE.

Ours was also 5% we were told when we paid it off that it was due to be adjusted.
I assumed lowered. Now interest rates are going up. Finance we cannot advise you without should be private information. The questions are what are you getting on that money now-net after taxes. Once you pay the bond that money is tied in your home.
Should you need that money, you would need a loan or to refinance the mortgage.
I've not looked up close but I think mortgage money is up to 5.5%.

[Stu from NYC]

Absolutely! I forgot the fixed admin fee which raises the effective rate. It looks like that went down be $3 also.

Interesting: I can't seem to figure out how interest is calculated. It certainly isn't as simple as 3.05% of the previous year's balance. It isn't even as simple as 3.05% of the previous year's balance amortized monthly.

As the bond balance is reduced the admin fee raises effective interest higher and higher and that is why we will wait a few more years. Now the extra cost is fairly small compared to balance in a few years gets larger and larger.

[Bogie Shooter]

My rate is 2.46%
Find yours here................
Amortization Schedules - Sumter (https://www.districtgov.org/departments/Finance/amortization_sumter.aspx)

Bond information............

Residential Bond Assessment Information (https://www.districtgov.org/departments/Finance/bond_info.aspx)

[DAVES]

We paid the bond at closing. The interest rate at that time was 7% or so and market rates were much lower so it was an easy decision. Do what's best for your wallet.

Ours was 5% mortgage money was 3.2%. Hum a choice same 20,000 pay 5% or pay 3.2%. That bond, supposed to pay for streets or whatever. It is normally in the price of the home. A home priced at 350 is really 350+20=370. Would you pay 370 for it?
What would 370 buy you where they do not have a bond.

[DAVES]

I think each district has its own bond - The Villages doesn’t refinance it, the district does. Did your payment go down? I would think that is something you would be told via a letter, not the internet

No shortage of confusion. Stuff like I heard. It is easy to check what is. We paid our off.
The interest was 5% at the time. We were told it was being renegotiated. Someone said it is now 3%. If that is so, I would be surprised. Interest on a ten year treasury is around 3.3%
Three percent would be below market.

[Bill14564]

No shortage of confusion. Stuff like I heard. It is easy to check what is. We paid our off.
The interest was 5% at the time. We were told it was being renegotiated. Someone said it is now 3%. If that is so, I would be surprised. Interest on a ten year treasury is around 3.3%
Three percent would be below market.

Ok, 3.05%:

[LuvtheVillages]

Each district has its own bond, and its own interest rate. I am in District 8.

Our bond was refinanced in 2020 when rates were very low. We are paying 3.73%, plus an admin fee of just under $100 annually. We will be paying that rate through 2039.

[Garywt]

New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
Bill
Not sure where you got you numbers but $1100 a month can’t be in the ballpark. I pay no attention to mine, it is collected through escrow in my monthly payment and the bank pays it every year. I don’t even know I am being charged.

[Bogie Shooter]

No shortage of confusion. Stuff like I heard. It is easy to check what is. We paid our off.
The interest was 5% at the time. We were told it was being renegotiated. Someone said it is now 3%. If that is so, I would be surprised. Interest on a ten year treasury is around 3.3%
Three percent would be below market.

Easily checked so you will not be surprised……….
Go look at District 6….2.46%

[superbat1]

I belive it's $1100 per year not $1100 per month.

[Dotneko]

Per year not per month.

[DAVES]

Not sure where you got you numbers but $1100 a month can’t be in the ballpark. I pay no attention to mine, it is collected through escrow in my monthly payment and the bank pays it every year. I don’t even know I am being charged.

Actually that is too common. So much per month is common You should check and know. It is so much per month is common sales tactics As is first month is free. They know exactly how many people will forget to cancel after the first free month.

Where does the money go? It is a good idea to write it down for a month.

[DAVES]

We paid off our bond. We calculated the break-even point to be about seven years (YMMV). We felt we would be in this house long enough that we would save money by not paying 8+ years of interest.

Some would argue that with a 3% interest rate you will be better off by investing the money. That's a good theory and sometimes it works to your advantage. However, if we had invested that $18,000 we would have something like $14,000 today and still have a bond payment due. Given what we are seeing today, we are happy with the choice we made.

Another perhaps not true this year. Investments, my statement shows I've been up every year for the past 15. This year I am down. The first in 15 years. On top of that the consumer price index is up almost 9%. Since, we pay that with after tax dollars, to be even you need to make ??? 12-14%. Please don't tell me it is only 11.7% for you, it is close enough for all of us.

People on this site will argue about anything. There is some interesting stuff. I would check out anything. As I've posted before legal, investment, even lawn care I would check out anything, even my posts, Before acting.

[Bill14564]

Actually that is too common. So much per month is common You should check and know. It is so much per month is common sales tactics As is first month is free. They know exactly how many people will forget to cancel after the first free month.

Where does the money go? It is a good idea to write it down for a month.

What are you talking about? The bond is paid on the property tax bill, the property tax bill comes once per year. There is no "so much per month" for the bond payment.

My bond payment is in the neighborhood of $1,300. My house was built eight year ago and bonds are higher for the newer areas but it is incredibly difficult to believe that even they are at $13,200 per year ($1,100 per month).

[BrianL99]

New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
Bill

Your math is way off.

[Wilharm]

The $1100 payment must be per year. Not per month.

[Mushkie]

New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
Bill

Your math is off or it’s a typo. The bond is paid YEARLY not monthly- so $1100 per year- it’s a line item on your property tax bill along with the regular property tax, maintenance fee and fire station tax, etc. i think the bond is about 3.45% but your agent would know. You can also go to district.gov to find out.
You didn’t say if this is a new or pre-owned home or if you used a Villages agent or MLS agent- but either way- your questions should be answered by the agent.

[crash]

New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
Bill

That is $1100 per year it appears on your tax bill.

[Bay Kid]

Paid mine off the 1st year. I looked at it like credit card debt, bad.

[KimmieK]

Do you mean $1100 per year? If this is NOT your forever home, do not pay it off.

[VApeople]

We bought our house in 2016 and our bond was about $22K at 6% interest. We had to pay about $1750 a year.

After paying our taxes in 2018, we paid off the bond.

[thevillages2013]

James Bond?

[eeroger]

We heard the Villages refinanced the bond and its now about 3 percent. Anyone else heard that?

Yes! You can look up the interest payment you are paying on the districtgov.org website. Our bond was refinanced 2-3 years ago and is now 3.7%.

[DanMac58]

New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
Bill
I believe you meant to say PER YEAR, not per month as per month would be $396,000

[GOLFER54]

Pay it, save money and one less headache.

[dewilson58]

Pay it, save money and one less headache.

:bigbow:

[defrey12]

We paid off our bond. We calculated the break-even point to be about seven years (YMMV). We felt we would be in this house long enough that we would save money by not paying 8+ years of interest.

Some would argue that with a 3% interest rate you will be better off by investing the money. That's a good theory and sometimes it works to your advantage. However, if we had invested that $18,000 we would have something like $14,000 today and still have a bond payment due. Given what we are seeing today, we are happy with the choice we made.

Depends how you invest that $18k. If you’re in “the Market”, yeah you’re taking a bath. There are other avenues. Look at “Self-Directed IRAs” and real estate…we took our money out of the market in 2019 and haven’t looked back. That was after the last “financial advisor” told us “you just gotta hold out for the “long-term!” I was 61 then…”the long-term is here”, I told him…greeted with only a blank stare

[Quixote]

The bond on our first home here—a Designer—had been paid off by the original owner, so we never gave it much thought. It was our understanding that the bond was the same amount for all homes in a neighborhood, no matter the size of the home, and that the one on our home had been about $12,000. We lived in that home for 2.5 years.

For our second home (built the same year as our first), we 'downgraded' to a Courtyard Villa which resulted in a larger home with features we learned in our first home we really wanted—a separate eat-in kitchen, an entry hall, a larger lanai, a larger master bedroom, generally lighter and brighter, and infinitely more privacy—the tradeoff being a smaller garage. The bond had NOT been paid off. This has turned out to be, as put earlier, our 'forever home,' but even not knowing that initially, we paid off the bond rather than have it running for another 25 or so years; the total payoff was about $5,500.

Doing so worked for us; I'm not saying it would work for everyone. Then too, we hear current bond figures are outrageously higher today than when we bought. Several years ago there was a big to-do about a 25% property tax increase. That didn't seem accurate for us, so we pulled out our tax bills for all the years we had lived here to find that our taxes had NEVER varied more than $20 up or down; that one year we actually did have an increase—of a total of 8%. Fiscally speaking, we have no complaints.

IMHO, the bond misleads enthusiastic homebuyers to overlook it as part of the price of the home they're buying. But that's a whole other story in itself....

[PennyAnn]

They tell you that the bond is at a low interest rate, but they don't tell you about all the admin fees they take.

Best to (a) pay it in cash.... (b) add to your mortgage....(c) if mortgage free, pay it on a Home Equity Line of Credit - low rate and pay as you wish - no penalty.

Or....$1,100 per year which feels like it takes forever.


New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
Bill

[mikeritz53]

That Bond number is annual not monthly and paid with your taxes.

[merrymini]

Paid it off at closing. My rate for the bond was about six percent. Stupid waste of money over the life of the bond. Anyone buying a house sharpens their pencils when doing the math and should be calculating that bond payment along with all the others expenses related to the home. Do not think that most do not.

[Stu from NYC]

Paid it off at closing. My rate for the bond was about six percent. Stupid waste of money over the life of the bond. Anyone buying a house sharpens their pencils when doing the math and should be calculating that bond payment along with all the others expenses related to the home. Do not think that most do not.

AS I said earlier in the thread two very experienced real estate agents said we will not get the value of the bond added to the price of the house on selling. No reason to believe they are both wrong

[retiredguy123]

Paid it off at closing. My rate for the bond was about six percent. Stupid waste of money over the life of the bond. Anyone buying a house sharpens their pencils when doing the math and should be calculating that bond payment along with all the others expenses related to the home. Do not think that most do not.
Correct, over the life of the bond. But, you also need to factor in how long you will keep the house. If you sell it in less than 4 years or so, you will lose a lot more money than the 6 percent interest payments.

[fastboat]

New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
Bill

What we did was take out a home equity loan and paid off the bond. This way you can at least write off the interest and probably at a better rate than you're paying on the bond.

[Dlbonivich]

Interest rate is different for every CDD. So you have to know yours. I’m a realtor and my is paid. Not sure you get it back dollar for dollar but, I T hi no it makes the home more attractive. Just like hardwood floors.

[bsloan1960]

That is $1100 per year it appears on your tax bill.

It's a typo- when I multiplied that figure by 30 years it would have been close to $400,000 if it were monthly.

[txfan]

So, in conclusion (?), it’s about 50/50 on paying off the bond vs not. Interest and Admin fee are undesirable, but tolerated, or considered a deceitful hidden fee to some.

Our bond fee is monthly within the escrow. If I had an extra stash of cash, I would pay it off to reduce monthly outlay and divert that “savings” to other debt.

Everyone has his/her own tolerance level for paying debt and for various reasons.

[toeser]

We moved two years ago and thought about paying off bond also about 20,000 at the time.

Two different real estate agents said do not expect to be able to add no bond to the value of your home. Since we are still not sure that we will stay in our first home here decided for now to make yearly payments/

The real estate agents may be correct for some buyers, but I can assure you when we moved to the Villages we added any remaining bond to the asking price to make true cost comparisons between homes. We ended up buying a zero bond house. Anyone who does not do that is not a very educated buyer.

[Stu from NYC]

The real estate agents may be correct for some buyers, but I can assure you when we moved to the Villages we added any remaining bond to the asking price to make true cost comparisons between homes. We ended up buying a zero bond house. Anyone who does not do that is not a very educated buyer.

Some buyers will do this but others will not. You are more astute than most. If a good market for the seller you have a much better chance of getting the bond paid back.

In a down market like I think is coming you will be hard pressed to get the bond paid back.

[snbrafford]

We too had this dilemma. Our home was built in 2009 and we are the 4th owner so the bond has been paid down by previous owners. We plan on staying in this home but plans change so we decided we did not want to pay off this bond with money doing well (at the time) in investments and then buy another house (perhaps down size) and have yet another bond.

If we stay here another 7 years, the bond will be paid off and that money will be a nice boost to our budget.

[geobar]

If you have ever bought a newly constructed home other than in Florida, you paid only one total price, which includes the Infrastructure costs (Roads, Utilities).

As far as paying it off DON'T.

Reasoning, You pay only 5% interest for the bond payable as it is added to your yearly Real Estate tax payments.

Our 1st house in TV, both were 5K yearly.
On our 2nd house in TV, both were 4.2K yearly.
Our 3rd house is South of TV, has No bond, and RE Tax under 1K yearly.

If you are appropriately invested, other than perhaps this year (2022) you are way ahead on investment income hopefully a lot more that the 5% interest bond payment.

Just another way for the "Money Hungry Morse Clan" to make even more money on your new house than they make unprecedented profits on.

----------------------------------------------------------------------------------------------------------------------------------------

We moved two years ago and thought about paying off bond also about 20,000 at the time.


Two different real estate agents said do not expect to be able to add no bond to the value of your home. Since we are still not sure that we will stay in our first home here decided for now to make yearly payments/

[Travelhunter123]

I agree with not paying off the bond. But, when you pay off a second mortgage, you always get your money back, dollar for dollar. It has no effect on what the buyer pays you for the house. When you pay off the bond, you need to hope that you can sell the house for enough extra money to recover the amount of the bond that you paid off. That is why it makes sense to not pay off the bond.

Well said
I also considered the break even point as about 15 years when deciding whether to pay it off or not
- Will I live for another 15 years?
- Will I live in The Villages for another 15 years

[Villages Kahuna]

Paying it off over the 20 year term might be a good idea. The municipal bond has a very low interest rate, much lower than any individual can get. So the question is—can you get a higher rate of return investing the $1,100 per month than the muni bond interest rate? The answer is almost certainly yes.

[retiredguy123]

The real estate agents may be correct for some buyers, but I can assure you when we moved to the Villages we added any remaining bond to the asking price to make true cost comparisons between homes. We ended up buying a zero bond house. Anyone who does not do that is not a very educated buyer.
So, when you sell your house, make sure that you tell the selling agents that they can only show the house to educated buyers.

[Bogie Shooter]

Paying it off over the 20 year term might be a good idea. The municipal bond has a very low interest rate, much lower than any individual can get. So the question is—can you get a higher rate of return investing the $1,100 per month than the muni bond interest rate? The answer is almost certainly yes.

According to 15 to 20 above posters it’s not monthly!:ohdear:

[Villages Kahuna]

The “money hungry Morses” don’t make any money by financing the infrastructure with bond proceeds. The other alternative used by most developers is to let the local government finance the infrastructure and let them pay for them by increasing property taxes. Almost for sure local governments would not create infrastructure as complete and attractive as done by the Developer.

You get what you pay for!

[Altavia]

Paid mine off the 1st year. I looked at it like credit card debt, bad.

I get people wanting to be debt free. But the bond is more like a deferred infrastructure tax than a debt.

The bond is not like credit card debt. Bond debt transfers to the new buyer when the home is sold. Credit card debt follows where ever you go.

No real estate agent will guarantee getting a higher asking price for a home with a bond. In this market, the difference is often less than a percent of sales price.

Even better to not pay off If inflation plus savings rates are greater than Bond interest.

Your essentially giving part of your or your heirs estate away to a future buyer paying it off.

[Altavia]

The “money hungry Morses” don’t make any money by financing the infrastructure with bond proceeds. The other alternative used by most developers is to let the local government finance the infrastructure and let them pay for them by increasing property taxes. Almost for sure local governments would not create infrastructure as complete and attractive as done by the Developer.

You get what you pay for!

Exactly! This is why I think of it as a deferred tax.

In return we each own a piece of the infrastructure around us from day one.

[Worldseries27]

new owner/first time- closing at the end of june.

(using approx. Numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the development district and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
bill
let the person you eventually do it as well as subsequent purchasers. Probably 3 to 5 in 30 years

[MrFlorida]

I just don't like paying interest, so I paid off the bond, your mileage may vary.

[Laker14]

So, when you sell your house, make sure that you tell the selling agents that they can only show the house to educated buyers.

Most buyers can do math.

[Laker14]

PLUS Admin Fee....................the effective rate is not that good.

And...while the administration fee reduces as the balance reduces, it doesn't reduce very much. My bond balance is around 7K. Interest rate 4+%, administration fee around $50.
In the last few years of the amortization, the balance gets to 4K, 3K, 2K etc, and the administration fee only goes down a dollar or so. So the effective % compared to the balance gets pretty high.

[Stu from NYC]

Most buyers can do math.

They certainly could but often do not.

[retiredguy123]

Most buyers can do math.
Even if they do the math and they are willing to pay an extra $20k for the house because the bond is paid off, at today's current mortgage rate of 6 percent, that is an extra $1,200 per year in interest. For some buyers, that may disqualify them for a mortgage. But, as I understand it, mortgage lenders do not even consider a bond on the house when they appraise the house or determine the buyer's mortgage eligibility.

[vb993]

All developments that I have lived in, the developer pays for the infrastructure - roads, utilities, etc. and pays for them from the profits of selling the homes. When the developer has completed the development he turns over the ownership of the common facilities to the Property owners, who then own the common facilities and decide what to do with and pay for them. Not so in the Villages. The developer charges a Bond to pay for the infrastructure, and the developer it turns out owns the common facilities and charges the homeowners a monthly fee to use them. So the property owners pay for the facilities, but the developer owns them and he can do what he wants with them. Close down amenities, convert common areas to apartments, whatever. Can't wait to see what else the greedy kids of the developer have in mind. Convert all of the golf courses into apartments? I know the response - if you don't like it here then move. So I have.

[dewilson58]

I know the response - if you don't like it here then move. So I have.

But yet you still post in ToTV.

:1rotfl::1rotfl::1rotfl:

Let me repeat.

:1rotfl::1rotfl::1rotfl:

[dewilson58]

the $1,100 per month than ....

Clueless statement.

[dewilson58]

The ..... Morses” don’t make any money by financing the infrastructure

Clueless statement.

[Haggar]

What are you talking about? The bond is paid on the property tax bill, the property tax bill comes once per year. There is no "so much per month" for the bond payment.

My bond payment is in the neighborhood of $1,300. My house was built eight year ago and bonds are higher for the newer areas but it is incredibly difficult to believe that even they are at $13,200 per year ($1,100 per month).

Keep in mind that a homeowner that has a mortgage with an escrow account does pay into the escrow account monthly for entire tax bill due on October which includes taxes and the bond...

[Bogie Shooter]

All developments that I have lived in, the developer pays for the infrastructure - roads, utilities, etc. and pays for them from the profits of selling the homes. When the developer has completed the development he turns over the ownership of the common facilities to the Property owners, who then own the common facilities and decide what to do with and pay for them. Not so in the Villages. The developer charges a Bond to pay for the infrastructure, and the developer it turns out owns the common facilities and charges the homeowners a monthly fee to use them. So the property owners pay for the facilities, but the developer owns them and he can do what he wants with them. Close down amenities, convert common areas to apartments, whatever. Can't wait to see what else the greedy kids of the developer have in mind. Convert all of the golf courses into apartments? I know the response - if you don't like it here then move. So I have.

Why then do you read and post about the Villages? BTW you have not been missed.............

[rogerk]

Do the math! The bond interest rate is probably less than you are earning on your investments. You can pay the bond off at anytime; there is no rush.

[rogerk]

Ask the district what your specific bond’s interest is! They are not all the same.

[Laker14]

Do the math! The bond interest rate is probably less than you are earning on your investments. You can pay the bond off at anytime; there is no rush.

they'd have to be giving me money to earn less than I've made on my investments the last month.barf

[Bill14564]

Do the math! The bond interest rate is probably less than you are earning on your investments. You can pay the bond off at anytime; there is no rush.

What rate have you earned in your investments in the last six months? If it isn’t negative then please share.

[Bogie Shooter]

Do the math! The bond interest rate is probably less than you are earning on your investments. You can pay the bond off at anytime; there is no rush.

Ask the district what your specific bond’s interest is! They are not all the same.

no probably
no need to ask district

See post #20,,,,,,,how to is there.

[Laker14]

Even if they do the math and they are willing to pay an extra $20k for the house because the bond is paid off, at today's current mortgage rate of 6 percent, that is an extra $1,200 per year in interest. For some buyers, that may disqualify them for a mortgage. But, as I understand it, mortgage lenders do not even consider a bond on the house when they appraise the house or determine the buyer's mortgage eligibility.

You address two good points I hadn't considered. One being if the extra $ in paid bond would affect how the mortgage underwriters appraise the loan. The other point, which I think is more intriguing is that I've always been looking at this with the idea that existing mortgage rates are less than the bond rate. However, as you point out, that's not the case right now. That changes the dynamic. Having paid off the bond, and now wanting to get it back in purchase price is working against you compared to the house for sale that has that same amount of bond locked in a at a lower rate.
Good point.

[Garywt]

Actually that is too common. So much per month is common You should check and know. It is so much per month is common sales tactics As is first month is free. They know exactly how many people will forget to cancel after the first free month.

Where does the money go? It is a good idea to write it down for a month.

Why to I care. It was setup when I bought my house, it is part of my mortgage payment. I don’t track my property tax either. The only time I need my tax amount is when I an filing my taxes.

[Garywt]

Pay it, save money and one less headache.

The only way to have a headache is to track it yourself. I let the bank take care of it so no headache for me.

[Glowfromminnesota]

From a buyers perspective, we specifically were only looking at homes with no bond or low bond when we purchased ours in September.

[Laker14]

From a buyers perspective, we specifically were only looking at homes with no bond or low bond when we purchased ours in September.

Well you guys must be the "educated" buyers who "can do math" that I was told don't exist. Unicorns.

But, seriously, what if you liked a house, but it had a bond, would you have considered the bond as part of the cost of the house?

[terenceanne]

Nobody has mentioned piece of mind - which apparently has no value. We have no mortgage and no bond. Does it add value to you house - of course it does. Anyone buying a house will favor a house with no bond all other things being equal.

[ahill99]

What we did was take out a home equity loan and paid off the bond. This way you can at least write off the interest and probably at a better rate than you're paying on the bond.
Does anyone know if the if the interest expense on the bond payment is tax deductible? My guess is that it is not.

[dewilson58]

Does anyone know if the if the interest expense on the bond payment is tax deductible? My guess is that it is not.

It is, until audit.

The bond is deductible until audit.


:posting:

[Bill14564]

Nobody has mentioned piece of mind - which apparently has no value. We have no mortgage and no bond. Does it add value to you house - of course it does. Anyone buying a house will favor a house with no bond all other things being equal.

All other things are very rarely equal. The bond payment that came out to be about $100 per month was not a factor for us.

We have since paid our bond since $0 per month is better.

[retiredguy123]

Does anyone know if the if the interest expense on the bond payment is tax deductible? My guess is that it is not.
Legally, it is not deductible, unless the house is rental property. Anything that appears in the non-advalorem section of your tax bill is not deductible because it is not based on the value of the house, like property tax and mortgage interest. Of course, you can deduct anything you want as long as you don't get audited by the IRS.

[valuemkt]

I won;t pay it off. I just look at it as part of the annual property tax. I would rather have the cash now, as I don;t expect to be around at year 30.

[Burgy]

New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
Bill

If it was per month it would be over 300k

[OrangeBlossomBaby]

New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
Bill

Most Villagers don't live in the same Villages property for 30 years. If you only live there 10 years, you will have paid in only 10 years worth of bond, and the new owners will be on the hook for the rest.

[Stu from NYC]

Most Villagers don't live in the same Villages property for 30 years. If you only live there 10 years, you will have paid in only 10 years worth of bond, and the new owners will be on the hook for the rest.

Not many will still be vertical after 30 years.

[Spartan86]

From a buyers perspective, we specifically were only looking at homes with no bond or low bond when we purchased ours in September.
We rarely if ever saw “no bond” in listings we were interested in - designer, 2+ or 3 garage and 2016ish or newer. However as metioned it would have been a player in an “all things being equal” discussion. Glad you found what you were after.

Like your avatar. Is that a Beaver on a trailer? Too big for a Cub, although the color is about right ;)

[EdFNJ]

Easily checked so you will not be surprised……….
Go look at District 6….2.46% Huh? I'm looking at my district 6 lot and it says 4.25%, the lot next to me is 5.25% (according to the web site listing) Been going through them all 1 at a time and (so far) they vary between 2.46 and 5.25. Seems all the Villa listings are 2.46 as well as a few non-Villas.

What am I missing? I thought they all are supposed to be the same.

[Bogie Shooter]

Huh? I'm looking at my district 6 lot and it says 4.25%, the lot next to me is 5.25% (according to the web site listing) Been going through them all 1 at a time and (so far) they vary between 2.46 and 5.25. Seems all the Villa listings are 2.46 as well as a few non-Villas.

What am I missing? I thought they all are supposed to be the same.

Have no idea what you are missing just posted what my rate is in unit 105….non villa.

Go call the finance department to get the right answer…."……………..

[Love2Swim]

Most Villagers don't live in the same Villages property for 30 years. If you only live there 10 years, you will have paid in only 10 years worth of bond, and the new owners will be on the hook for the rest.

Depending on the interest rate, you need to look at your break even point. When we bought, ours was 7 years. I was glad we paid it off and saved all that interest. As it turns out we didn't move, but had we after 7 years we would have broken even financially, and, could put the house on the market advertising it as "NO BOND", which is a positive for those who look at total costs when purchasing.

[Altavia]

Depending on the interest rate, you need to look at your break even point. When we bought, ours was 7 years. I was glad we paid it off and saved all that interest. As it turns out we didn't move, but had we after 7 years we would have broken even financially, and, could put the house on the market advertising it as "NO BOND", which is a positive for those who look at total costs when purchasing.

What math told you breakeven was 7 years?

You can't ignore the time value of money. Money paid today is worth more than money paid in the future. Especially with inflation heading north of 7 percent.

Mortgages/loans are a form of inflation hedge.

[BlueStarAirlines]

So......it's per month? :a20:

[EdFNJ]

Have no idea what you are missing just posted what my rate is in unit 105….non villa.

Go call the finance department to get the right answer…."…………….. I thought you were saying all district 6 is the same and BECAUSE yours was whatever. My understanding was the rates were all supposed to be the same within a district. Evidently not unless they are mostly all listed wrong one way or the other. NOW I will call to find my SPECIFIC rate not that it really matters for me at this point, just curious.

[John Mayes]

New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.



With this in mind what is the best way to pay this bond?

Thanks,
Bill



You sure your math is correct? $1,100 per month?

[Bogie Shooter]

You sure your math is correct? $1,100 per month?

There is a wealth of information after post#1!:oops:

[melpetezrinski]

New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
Bill


Don't worry about if the bond adds value to the home
Forget about "piece of mind" with paying off a $20,000 bond
These are so far down the list of deciding factors.

What you need to do is ask yourself, what will I do with the money if I don't pay off the bond.

If you will keep it under you mattress, then pay off the bond.
If you will renew your CD, then pay off the bond.
If you will keep your baseball cards and coin collection, then pay off you bond.

You have to honestly ask yourself, can I invest the money and guarantee myself a better ROI (return on investment) than 3.7% per year over 30 years. I know PLENTY of investment vehicles that can easily attain that goal.

[Goldwingnut]

I thought you were saying all district 6 is the same and BECAUSE yours was whatever. My understanding was the rates were all supposed to be the same within a district. Evidently not unless they are mostly all listed wrong one way or the other. NOW I will call to find my SPECIFIC rate not that it really matters for me at this point, just curious.

There are different bond series in different districts, for example CDD 10 has a 2012 and a 2014 series bond (phase 1 & 2), the bonds have different rates but everyone within each series has the same rate but may have a different principal amount depending on their unit #.
CDD10 2012 bond was just reissued with a significantly lower rate (3.05% vs. its previous of nearly 6%) saving residents with phase 1 bonds significantly.

Most of the bonds issued for development in The Villages have a 10-year call and are reissued if the market conditions are good and a better rate can be achieved. Don't expect any to be reissued in the next year or two thanks to the current economy.

You can find your rate here Amortization Schedules - Sumter (https://districtgov.org/departments/Finance/amortization_sumter.aspx)