Bond payoff
 

When is the best time to pay off your Bond? Anyone know for sure?
I know that realtors do not recommend paying off the Bond... however the
Interest is around 6% which is very high.

Thanks

Paid
 

Sooner the better- the longer you wait the more interest is accrued. I paid mine off first year and it's a wonderful feeling to not pay double in 30 years with the interest.

With that said...

If you're not going to be here in 30 years.. or if you sell to move to another home. best to not pay it off as the bond follows the house not the owner.

I personally am staying in this home (no exceptions)

Not sure when the best time is, but if you want the payment reflected on your annual bill, and therefore not have a charge on the November bill, you must pay off the bond by the end of July (actual date may vary by year). As for me, we have determined that we make more by leaving the money invested and paying annually than we would be withdrawing it to pay off the bond.

:) From the District Web Site:

Residential Bond Assessment Information

Residential Bond Assessment Information
The infrastructure of the District in which you live was built with tax-exempt bonds. The bonds are repaid with monies collected in the annual tax bill sent out by the County Tax Collector's Offices and appear in the Non-Ad Valorem section of the tax bill as "Bond Debt Assessment".

You may pay off your bond assessment in full at any time. You are not required to pay off this assessment in advance.

If you choose not to pay off the bond debt before the “July cut off date”, the annual assessment will continue to appear on the tax bill until the debt is paid off.
If you choose to pay off your remaining bond assessment before the July cut off date, the yearly installments will be eliminated from your annual tax bill.
If you pay off your bond between the July cut off date and September 16th you will owe no additional interest; however, you will still have one more annual bond assessment on your tax bill.
If you pay off your bond between September 17th and March 16th you will owe six months additional interest.
If you pay off your bond between March 17th and the following July cut off date, the full annual assessment of interest is owed.
Contact the Bond Unit at (352) 751-3900 for your Bond Payoff amount.

The July cut off date is July 16, 2021 to eliminate the bond assessment on your 2021 Tax Bill.

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For us the decision point is 10 years. If we are staying more than 10 years then it makes sense to pay off the bond and save on interest. If we feel we will be moving in less than 10 years then the pay off amount will be more than the amount we would pay in annual payments.

Good thought about investments too. If you are making more than about 6% on your investments then you would actually do better to leave the money invested and make the annual payments

The interest rate is high. If you're planning to say, just pay it off.

I hate debt, but I have not paid off my bond. I think the biggest disadvantage to paying it off is that you will lose money when you sell the house. You will not be able to convince a buyer to reimburse you for the money you used to pay off the bond. And, very few people actually know how long they will keep their house before selling.

Thanks for the information

That is exactly why we do not plan to pay off the bond early.

Have heard they might refinance the bonds to reduce the interest rate.

If you plan on moving never and if you plan on staying never , real low interest rate in can do better with the money in my vanguard index funds , I’ve sold 5 homes here soon to be 6 never gave a discount for the bond and always sold homes over the assessed value

You do get a portion of a paid bond back much in the same way you get other home improvements back. Two homes, otherwise identical, will sell for different amounts for say an enclosed lanai. Two identical homes will not sell for the same if one has a paid bond.

The increased sale amount will not be comps + bond balance just as the enclosed lanai cost is not 'paid' .

I place the savings/ increased sale price at a point that the home must be kept in 7-10 years to break even.

So, going to pay the interest which you will get NO money back on and still not pay the bond down that much.

I asked several real estate agents who have been around for awhile and know the market whether it makes sense to pay off the bond and they all said not worthwhile unless you are sure you will stay in your home for 10 years or so.

In our case we are here less than a year and not 100% sure this will be our only home so not paying off bond at this time.

I also asked several RE agents who told me that you do get a portion of the paid off bond back. I went further and examined newer homes for sale with paid off bonds and they do sell for more than comps w/o bonds.

You may not get all of your bond money back if you sell but a paid bond is a plus to buyers.

Agreed that you get some of your money back but to me not worth paying it off early unless we fully expected to live say 10 years in our house. At this point hard to say for sure.

Have been bond-free for ten years now, it's a good feeling.

I’ve been debt free for 15 years. Cash is king. Interest is lame:faint:

Jump on The Villages Gov. site and see how much our bonds really cost us over time. Not to mention the interest charged they also tack on an admin fee every year. I looked at some bonds in district 13 that were $40k but by the time you have paid them off the true cost on your bond in that district came to $157K. If your planning to stay in your home then pay it off and even if you don't stay you will sell the home quicker when it has "NO BOND"

As more homes age, more bonds will be paid off and it will actually be a detriment to sell a home that still has a bond payment. Agents will then be telling clients why it’s better to purchase the paid off bond homes.

To me, a mortgage debt and a bond debt are two different things. I would never carry a mortgage debt because it has to be paid off at some point and it has no benefit to me or to whoever buys my house, because they can get their own mortgage. But, a bond debt can be transferred to the buyer, and it can be a benefit to a buyer because they can either assume the debt or pay it off at their option. If I pay it off, the buyer cannot reinstate it. So, a house with an unpaid bond offers the buyer an option that is not available on a house without a bond. Options are good. This can often result in a financial benefit to the seller in terms of the overall investment.

Bond Payoff
 

Not all bonds are 6%. District 8 refinanced their bond during the summer. I believe it is somewhere around 4%. Even with the tax increase, our total tax bill was $530 less this year than last year.

However, a paid off bond was a powerful inducement to my buying the house I bought. So were a new roof and HVAC system. That’s a bit like getting a $50,000 (or whatever) discount.

But if you pay it off , you save 6% interest and your home will be more competitive when you sell it! As a recent buyer, I only looked at homes with the bond Paid Off!

Is your Real estate agent a financial advisor?

Refinance the Bond
 

You could just get a second Mortgage at a lower rate and pay it off.

That situation already exists. The houses in the northern areas are mostly bond free or small balances and I see no impact on new home sales in the south. I will take a new home over a 20 year old house any day.

That’s a good point and I have thought about it. I just hate paying over $1000+ interest on a $1500 yearly bond payoff.

We are at 5.25% I believe.

Thanks

That’s a different point of view. Don’t know if I agree or not but thanks for sharing.

We owed about $2000 when we purchased the house 2 years ago, my wife inquired on payment. We were surprised when we were told that we owed $2232. And it wouldn’t be paid off until 2032. The payment of $283.59 a YEAR was broken down to $159.73 in principal and the remaining balance of $123.86 was interest and ADMINISTRATIVE FEES! If we continued paying it on their schedule we would have paid an additional $1700. What a scam, they never talk about the ADMINISTRATIVE FEES. Pay it off if you can.

I just recently purchased a home in TV. For me the Bond was paid off. Just curious, how much is a typical Bond amount when a new home is purchased. I know the Bond amount may vary depending on what year your home was built.
Thanks

Having the Bond Paid Off?
 

I would think it would be a good selling point to have your Bond paid off.

One strategy I have heard of is to put down enough on the house and basically roll the bond into the mortgage. That way you get a lower interest rate, but you do need to put more money down.

Pay it off as soon as possible. The interest you're paying is high and NOT tax deductible.

We took out a Home Equity loan and paid it off. The RATE was lower AND the interest paid was deductible. Iike getting a twofor.

Our house, a Bungalow CYV was built in 2018. The bond was just north of $17k and the interest rate is 3.9%.

I could but if we decide to go to a larger home would still not get the money back for the bond in full.

In a perfect world, you would pay off the bond, save money on the interest, and, when you sell, the buyer would reimburse you for the principal amount of the bond that you paid off. Unfortunately, it is not a perfect world, and the buyer will not reimburse you for the full principal amount. So, you need to assess the value of the potential savings in bond interest versus the loss of principal when you sell.