Bond questions
 

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

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/

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.

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

Bond
 

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

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.

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

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.

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.

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

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

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.

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

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.

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.

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%.

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.

My rate is 2.46%
Find yours here................
Amortization Schedules - Sumter

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

Residential Bond Assessment Information

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.

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%:

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.

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.

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

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

Per year not per month.

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.

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.

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).

Your math is way off.

Bond math.
 

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

Bond paid yearly with property taxes
 

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.

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

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

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

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.

James Bond?

Bond Payment
 

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%.