[cherylking]

My husband wants to payoff the bond. We've lived in Pine Hills since 5/31/2017. We aren't planning on moving but our history tells a different story. In 25 years of marriage we have moved 4 times for various reasons but none of the moves were necessary. We just wanted to live in a different part of town (Denver Metro) or the last move in a different state (FL). Thanks.

[Stu from NYC]

Thought of doing it and spoke to a couple of real estate professionals.

Both said if and when we sold perspective buyers would not pay more for our house based on the bond being paid off. We might get some of it back but probably only a small amount.

Therefore for now decided not to pay it off.

[kmspla1952]

Well. Here is our story regarding the bond. Our home was built in 2012 in CDD #9 and has/had a 30 year bond on it. There is a schedule out on the district.org for your individual CDD and village.

So here is my assessment of the "financials". (1.) There is an annual Admin fee of $80 and some cents. For a 30 year bond you will pay a total of $2,404.07 in admin costs. (2.) The interest rate is 6.963%. For a 30 year bond you will pay a total of $21,684.92 in interest. For example our bond payment this year (9 years into the 30 year bond) is/was $1,335.78. That is comprised of $80.15 admin cost, $964.27 interest and $291.37 applied to principal. I have a hard time with giving someone $1,330 and $1,044 of it goes to admin & interest and only $291.37 is "taken off the top". When we bought this house I was not totally knowledgeable of the financials involved in the bond.

Needless to say we paid our bond off this year. If we do decide to move (and you NEVER know) we will incorporate the bond amount we paid off into the sales price.

Good luck with whatever decision you make.

[Mrprez]

The two most obvious pros are the savings from not paying all that interest and admin fees.

Some say the cons are that you won’t get all that back when you go to sell.

[LuvtheVillages]

If you plan to stay in this home until the trumpets sound, then you can save some interest expense by paying the bond early. You will still have to pay the annual maintenance fee on your property tax bill. Look up your bond interest rate first and determine if you are earning more or less than that on your investments.

If you move, you will not recover the cost of the bond when you sell the house. Most buyers do not consider the bond when they make their purchase. A paid bond may help you sell faster, but it will not increase the sales price by much.

[Tom52]

I had the cash available, the market is too high to put more in it and CD rates pay less than 1%. Bond is 6.95%. It was a no brainer to pay off the bond.

[village dreamer]

if you can make more than 6% , dont pay it off. if not pay it off.

[villagetinker]

The interest on the bond was higher than what I was getting on some other investments and not tax deductible, so we decided to pay off. Long term plan we are here till we croak, with no plans to move.
OP, you need to do your own financial analysis, what works for us may not work for you, have a discussion with your financial advisor.

[Bay Kid]

I paid mine off 6 years ago. Bond payments are like credit card debt. High interest and you can't deduct the interest.

[petsetc]

Many threads on this subject, try the search feature.

My thoughts are...when I bought my house in TV, the bond was sort of an afterthought and although I understood it was like a second mortgage, I gave it little consideration. I think many buyers here handled it in a similar fashion.

IF you pay it off and then decide to sell, the theoretical remaining balance needs to be added to the sale price which will make the sale price need to be that much higher than comparable other homes which than could make you look overpriced, particularly in the early years of the bond.

With today's brutally low interest rates, I find it very tempting to pay off too, but...at this point I'm just going to ride it out.

JMHO

[bandsdavis]

You will get a number of different answers on this question, and if you do search of this site you will see many threads in the past on the topic. From a purely financial standpoint, we calculated our projected income from leaving the money invested vs the savings from paying it off, and leaving the money invested was by far the better choice for us.

[JoMar]

Also depends on how old you are and how long you expect to live and the disposition of your property after you die in addition to how financially fluid you are.

[eweissenbach]

Well I seem to be the exception, in that I always considered the bond as part of the price. We probably looked at 500 or more homes prior to buying in 2017 and if a home was priced at $300,000 with a $20,000 bond, I considered it as a $320,000 property. If it was $310,000 with the bond paid off, I considered it a $310,000 property. I once got into an argument with a salesperson at an open house when I mentioned that the price of the home was actually price plus bond (I wasn’t commenting to her But she overheard and interjected) and she said “oh, you can’t count the bond as part of the house, it will be part of your tax bill and you won’t even notice it”. My reply was something to the extent that “so you think I won’t notice that extra two grand on my tax bill? Do you think I’m an idiot?” When we bought our villa the bond had been paid off and we definitely took that into consideration in the negotiations. As some have said, the bond is amortized at a much higher interest than a current mortgage and unlike mortgage interest, is not income tax deductible.