Bond payoff cutoff date is July 18 2025 for this year

[Maker]

This notice appeared in this week's district news letter. Might be useful if you are thinking of paying off your bond to save interest and the yearly admin fee.

- - - - - - -

If you are interested in paying off your Bond in full, our next Bond Cut-Off
date is Friday, July 18, 2025. If the Bond is paid off in full by 5:00pm on July
18 , the bond assessment will no longer appear on your annual County
Property Tax bill. This option allows you to avoid future interest payments on
your Bond.

Please call the Bond Team at 352-751-3900 for the payoff amount and
instructions on how to submit your check. Payments can be placed in the
District Drop Boxes located at each Postal Station up until July 15th. If you are
paying after July 15th, please call our office to schedule an appointment to
come in and pay. If mailing your payment, allow enough time for it to reach us
by the 18th

Please remember that even when the Bond is paid in full, there will continue
to be an annual Maintenance assessment on your County property tax bill
which pays for ongoing costs to maintain the infrastructure of your District.

You are not required to pay off your Bond in advance. You can continue to pay
the Bond through the annual assessment on your County Property Tax bill.

To view details of your Bond, all Bond amortization schedules are available on
the District website at Finance & Bonds - The Villages Community Development Districts (http://www.DistrictGov.org/bonds)
That link, if hidden, is www [dot] DistrictGov [dot] org /bonds

If you have any questions, please contact the Bond Team at
bonds@districtgov.org or 352-751-3900

[Spartan86]

Thanks for the info. I was just looking at our amortization schedule recently. I understand the arguments against the payoff - mainly that you likely will not recover it, hard to say. And yet, as of late it is costing us about $1400 per year to not pay it. Our balance is around $28K@4.33%. As noted on the Deluna thread, many there are at just over 3%. New builds near Eastport are at 5.19%.

[Bill14564]

Thanks for the info. I was just looking at our amortization schedule recently. I understand the arguments against the payoff - mainly that you likely will not recover it, hard to say. And yet, as of late it is costing us about $1400 per year to not pay it. Our balance is around $28K@4.33%. As noted on the Deluna thread, many there are at just over 3%. New builds near Eastport are at 5.19%.

There have been some very long threads on whether or not it makes sense to pay off the bond.

I saw that in 12 years I would have paid the same amount whether I made yearly payments or simply paid the balance then. On the one hand I would lose any interest that I might make off the money if I kept it in my account but on the other, if I made yearly payments for those 12 years I would still have a $10,000 balance remaining.

I bet that I would be in the house 12 years and paid the balance. If the time period was 20 years then I might have made a different decision.

[Spartan86]

There have been some very long threads on whether or not it makes sense to pay off the bond.

I saw that in 12 years I would have paid the same amount whether I made yearly payments or simply paid the balance then. On the one hand I would lose any interest that I might make off the money if I kept it in my account but on the other, if I made yearly payments for those 12 years I would still have a $10,000 balance remaining.

I bet that I would be in the house 12 years and paid the balance. If the time period was 20 years then I might have made a different decision.

Thanks Victor,
I searched the threads briefly a couple of days ago and had a hard time finding the dedicated bond threads. Appreciate your thought process and am doing some similar calculations. I need about 6.4% pre tax on the money to break even paying the interest and fees. Doable but not at current risk free rates.

[ElDiabloJoe]

There have been some very long threads on whether or not it makes sense to pay off the bond.

I saw that in 12 years I would have paid the same amount whether I made yearly payments or simply paid the balance then. On the one hand I would lose any interest that I might make off the money if I kept it in my account but on the other, if I made yearly payments for those 12 years I would still have a $10,000 balance remaining.

I bet that I would be in the house 12 years and paid the balance. If the time period was 20 years then I might have made a different decision.

This is an interesting thought process. I would appreciate it if you were able to 'splain it as if I were a 5 year old. Are you saying your annual payments would take 12 years to add up to the bond amount if you had paid it in cash at the start (i.e.- without paying interest in the annual payments) - a kind of break even point?

[Maker]

Make sure the yearly FEE is factored in to all calculations. It may seem small, but in many scenarios it is a major factor in calculations.

For example, a $1000 principal + interest yearly payment with an $800 fee is 8% extra.

[Bill14564]

This is an interesting thought process. I would appreciate it if you were able to 'splain it as if I were a 5 year old. Are you saying your annual payments would take 12 years to add up to the bond amount if you had paid it in cash at the start (i.e.- without paying interest in the annual payments) - a kind of break even point?

Yes, sorry I didn't word it better.

As an example, let's say my yearly payment was $1,500 and right now my balance is $18,000.
- If I pay $18,000 today then I have no more yearly payments going forward.
- If I continue to pay $1,500/year then in 12 years I will have paid the same $18,000 but I can see from the amortization schedule that I would still have a balance of $10,000.

If I'm going to stay in this house for at least 12 years then I would save money by paying it off. If I leave earlier then I put money on the bond that I would otherwise pass to the next buyer. I'm betting I'll be here the full 12 years.

This doesn't factor in investment income. It might be argued that I would make more than $10,000 by leaving the money in the market. In my case, the money was in a bank account and the market tanked a few month after I paid the bond. Someone else may choose to do the math to show me that I still lost money but I feel comfortable with the choice I made.

[Altavia]

I get people who don't like debt, but that is an emotional choice.

The bond is a debt against the property. It transfers to the next owner when selling the home.

The bond is not a personal debt, is not tax deductible, does not count against your credit score or ability to finance the home in the same way a personal debt would.

Bonds average less than about 5% the cost of a home so be careful making it a major factor in the decision in a home purchase. Don't let the tail wag the dog.

If you have the cash to pay off the bond, investing that money to pay the bond will cover the cost and probably more. You'll still have the cash if needed or when you sell the home.

Based on feedback from a number of sources, my assumption is there is only a 20% probability of recovering the present value if bond cost when reselling the home.

Especially now where it's highly unlikely the present value of a payed off bond can be recovered in the sale price of a home in the current market.

YMMV...

[Bill14564]

I get people who don't like debt, but that is an emotional choice.

The bond is a debt against the property. It transfers to the next owner when selling the home.

The bond is not a personal debt, is not tax deductible, does not count against your credit score or ability to finance the home in the same way a personal debt would.

Bonds average less than about 5% the cost of a home so be careful making it a major factor in the decision in a home purchase. Don't let the tail wag the dog.

If you have the cash to pay off the bond, investing that money to pay the bond will cover the cost and probably more. You'll still have the cash if needed or when you sell the home.

Based on feedback from a number of sources, my assumption is there is only a 20% probability of recovering the present value if bond cost when reselling the home.

Especially now where it's highly unlikely the present value of a payed off bond can be recovered in the sale price of a home in the current market.

YMMV...

For everything the bond is not, what it is is a cost out of my pocket. I have to pay the full principle but it’s my choice whether I pay the interest and fees.

In my case, due to market fluctuations over the last few years, gains on that money in my account would not have covered the interest and fees. Plus, with the fixed fee the effective interest rate increases each year. No one knows what the next few years will bring but expecting more than 5%/year over time is optimistic.

[Topspinmo]

I get people who don't like debt, but that is an emotional choice.

The bond is a debt against the property. It transfers to the next buyer when selling the home.

The bond is not a personal debt, is not tax deductible, does not count against your credit score or ability to finance the home in the same way a personal debt would.

Bonds average less than about 5% the cost of a home so be careful making it a major factor in the decision in a home purchase. Don't let the tail wag the dog.

If you have the cash to pay off the bond, investing that money to pay the bond will cover the cost and probably more. You'll still have the cash if needed or when you sell the home.

Based on feedback from a number of sources, my assumption is there is only a 20% probability of recovering the present value if bond cost when reselling the home.

Especially now where it's highly unlikely the present value of a payed off bond can be recovered in the sale price of a home in the current market.


It’s debt if you have to make payments and there interest charges.

[cwmmfink]

10 years ago we decided this would be a long term residence. I paid the bond at 4% with cash earning 1%. Still here and don't regret it. In fact, I then bought a Villages bond earning 4% tax free. Still own that too.

[ltcdfancher]

When we were looking at pre-owned homes, if the listing included “Bond is paid,” that property became a contender. One must realize that the Seller would likely increase the selling price in order to recoup the bond payment(s). They may or may not recoup all of it, but now the buyer could be amortizing the higher purchase price at an interest rate greater than the original bond.
I embraced the idea offered earlier to keep a pile of “cash” inside MY portfolio that throws off enough interest/dividends to pay the yearly bond. I sleep pretty well after making this decision. Your mileage might vary.

[NoMo50]

Bonds average less than about 5% the cost of a home so be careful making it a major factor in the decision in a home purchase. Don't let the tail wag the dog.

That may be true as an overall average, and is probably a safe assumption for many pre-owned homes. But, new builds down in the Eastport area are significantly higher. In those Villages, bonds can approach and even exceed 10% of the home's sale price.

[Altavia]

It’s debt if you have to make payments and there interest charges.

The distinction many seen to miss is unlike a mortgage, the bond a debt than transfers to the next buyer when the home is sold.

Paying it off early is likely to be a gift to the next buyer. Especially during a buyers market where for sale inventory is high and prices are dropping.

[Ptmcbriz]

I have 25 years left on my bond. It makes zero sense to pay it off.


35,000 balance
To pay off the $35,000 now, I would lose 3500 a year in stock investment earnings of $87,500 over 25 years (avg 10% a year).

Payments made on the bond $187 over 25 years at 4% interest is $56,200

Total cost over 25 years $56,200, Gain over 25 years of retained stock market investment earnings over those 25 years $87,500, gives a net gain of $31,200 over 25 years.

By paying off the bond, I would be flushing down the toilet $31,300 that I would have gained in by investing that $35,000 in the stock market.

Thereby it makes no sense to pay off the bond early when the lump sum is making money for me. Here is the big “but”… since I keep my money invested in the stock market which gives me an average return of 10%. Some years it’s 8%, some years it 17%+ , BUT if you keep your money locked in low interest investments like bonds, then yes it would make sense to pay it off. However, if you keep it invested in the stock market (which many of us do).you are losing money to a tune of $31,200 to pay it off.

[ElDiabloJoe]

Yes, sorry I didn't word it better.

As an example, let's say my yearly payment was $1,500 and right now my balance is $18,000.
- If I pay $18,000 today then I have no more yearly payments going forward.
- If I continue to pay $1,500/year then in 12 years I will have paid the same $18,000 but I can see from the amortization schedule that I would still have a balance of $10,000.

If I'm going to stay in this house for at least 12 years then I would save money by paying it off. If I leave earlier then I put money on the bond that I would otherwise pass to the next buyer. I'm betting I'll be here the full 12 years.

This doesn't factor in investment income. It might be argued that I would make more than $10,000 by leaving the money in the market. In my case, the money was in a bank account and the market tanked a few month after I paid the bond. Someone else may choose to do the math to show me that I still lost money but I feel comfortable with the choice I made.
Interesting. Thank you. One would have to be disciplined enough to actually take the money one would pay in bond and put it in an investment account and few are. If there's a few extra Gs in the account, Mrs. EDJ's Amazon account gets a lot more activity.