Bond Payment
 

I'm back up north so I have to communicate with my salesman via email. I just asked him the bond amount on some CYV's and he said $14,389 or $1118 a year for 30 years. My question is, if you choose annually do you receive one payment notice a year or do you pay monthly?

You'll get billed and will pay monthly.

Correction: Ignore what I said. Ohiogirl got it right. I do pay monthly but through the mortgage escrow, and I got that confused with the amenity fees!

Depends
 

If you have no mortgage, it just comes on your tax bill and you pay it annually and you have one chance a year (I think by July), with a separate notice, to pay it off. You could pay it off in between annual notices, but you would have to pay all the interest for the year in between anyway. At least that's my understanding.

Most here advise that if you are sure you are staying in that house, you may want to consider paying it off - if you think you may be moving in the future, don't pay it off.

If you have a mortgage and have your taxes and insurance escrowed by your mortgage company, you will also be charged for the bond and they pay it, just like they pay your taxes.

Thanks for the info, I won't have a mortgage. I had planned on getting a patio villa and paying the bond at closing since it's only $10,400. However, I've been looking at used ranchers and CYV's which are more expensive plus the bond is more. It's just the case of do I want more house and the tax bill to go with it or a more affordable house and no tax bill.

My opinion.................The bond is basically an annual tax payment; you are paying for the infrastrtucture. It makes no sense to pay it off.

The bond has a principal component as well as interest. Depending on your financial situation, it could make a great deal of sense to pay it off.

JMHCPA'sO

Changing the subject a bit.

Does anyone know the dollar amount for the Designers in the new village of Sanibel??

The bond on Premiers in Pennecamp and Laurel Valley is $48,000.

WHOA!!! :$:

Bill :)

:loco:

$48,000 that woke me up

I have been reading about the bond. Not really good with these kinds of things and am hoping that someone can explain the concept and methodology of the bond associated with living in a TV home...in plain English


:confused:

The way I understand it is before the first house is built in any village, the builders go in and put in the streets, underground utilities, mail boxes, community center and anything else that is not a home. After they get that all done, they take the total cost of the construction and divide it equally among the homes to be built, and that will be your bond. Or at least something close to this.

In most areas up north the infrastructure is in the price of the home. Here it is the bond. So if a builder in the north builds 10 houses and he wants to sell them for $500,000 but he spent $100,000 puting in sidewalks, sewer, water, and other infrastructure for the development he would sell each house for $510,000. In TV they sell the house for $500,000 and you pay a $10,000 bond.

It's not divided "equally." Depends on the density of the type of section - e.g., premiers have the largest lots - all premiers in the new District (not done by Village, but District) will have the same bond, Designers will have the next most expensive, etc.

In the past, ranches and designers had the same bond, not sure if that is true anymore or not, but it could be, now that ranches are called "cottages." Also not sure if CYVs and patio villas have the same bond or not - think they might.

And before someone asks again, the size of your individual lot doesn't matter, just the section of homes you are in in that particular District, i.e., all designers within the same district will have the same bond amount, etc.

I thought I would add in a couple of things regarding bonds.

First, instead of buying a new house with no rights of negotiating the price, consider buying a resale house. You can negotiate price with the seller. Also, the bond will be lower (or even zero) as compared to a new house. My bond was only $2,500 when I bought a resale about 18 months ago as compared to friends who bought new and have about $23,000 bond. I have a much nicer home with much lower bond.

Secondly, I have seen some people who want to pay off their bond will take out a home equity loan; pay off the bond; and then the interest on the home equity loan is tax deductible. The interest is a lower rate than the non-tax deductible bond interest. Disclaimer: Check with a person who knows for sure.

I hope these ideas are helpful. Any way you do it, you will love The Villages.

Tbugs, FWIW - - -

I believe some folks just want to have new homes......probably for a variety of reasons. For example:

a.) You get to have some input/decisions regarding the details of what goes into a new home,

b.) You want to be in the area surrounding 466A (at present), and/or

c.) You simply want a brand-spankin' new home.

As with most transactions, emotions do come in to play. You want what you want for whatever the reasons, even if you could have done something perhaps a bit more financially favorable by going a different route - buying pre-owned, buying a smaller home, etc.

Re: the home-equity loan/HELOC to pay off the bond - I believe in many/most cases nowadays, those types of loans carry variable interest rates whereas the bond rates are fixed. Granted, you can probably get a lower initial rate with the new loan, but then you're rolling the dice with what might happen with the interest rates as time goes on. However, on the other hand - as you stated - the interest paid on the loan should be tax deductible - the interest you pay on the bond is not.

No perfect answer(s) for everyone!! :wave:

Bill :)

Good uncluttered explanation, elevatorman. I might add The Villages is the only southern developer that I know of that separates the cost of infrastructure from the price of the house. Perhaps other CDD's do likewise.

Bill -

I have never heard of "FWIW". What does it mean? I tried to figure out some connection with popcorn but couldn't think of any.

Yes, I know the idea of a brand new house seems wonderful. I have friends building one right now in St. James. They have found each little upgrade costs more money like a fancy front door is an extra $2K. We were doggone lucky to find a home that had lots of extras in it that we would have gladly paid extra for. It took a lot of looking with both a Villages Property agent as well as an agent from ERA/Tom Grizzard just up on Hwy 441.

for what it's worth

Thanks for the answer - however, the "avatar" of the child makes me feel as though this is something even little kids should know.

waterman's got the FWIW covered. Sorry about that - no intent to confuse!

We did the same as you in TV - bought a pre-owned Patio Villa, furnished. We're more than happy with it and we feel like that was an appropriate route for us to go. On the flip side of the coin, we built a new home here in OH a couple of years ago, right as the real estate market started it's downward slide. And we did it for somewhat emotional reasons that I won't bore anyone with. We went into it, though, with our eyes open, knowing we'll likely not see all the money back out of it if/when we sell. But it's what we wanted, when we wanted to do it, couldn't find anything else where we wanted to be that would even be close to what we wanted, blah, blah, blah. A "fiscally prudent" decision? Doubtful. Do we feel like it was the right thing for us? Absolutely.

Who knows what we'll wind up doing in TV if we ever decide to become frogs!! :icon_wink:

Bill :)

A smaller or better yet no bond is only one reason to consider buying a resale. Resale homes have negotiable prices. They also have mature landscaping, often more extensive than is put into new homes. Homeowners add extras to their homes in the belief that they will live there for the rest of their lives, and when they do sell, they can't take for example ceramic or laminate flooring, solar tubes, enclosed lanais, screened porches, crown molding, attic stairs, an elegant front door, storage units, even just handy shelves, and on and on and on. Resales tend also to be closer to supermarkets, doctors, banks, restaurants, other shopping, town squares and on and on and on. Of course these things will catch up to the newer areas, but they take time. With a resale you don't have to wait, and it's amazing what a coat of paint can do to make someone else's home your own!

The bond has a principal amount, when paid by installment, includes interest that is not tax deductible. It makes better sense to pay it off (if you can afford to do it) and deposit the saved interest money into your rainy day account.

The information regarding the ultimate price of a home in TV based on whether or not there is a bond seems to me to be largely anecdotal and I am uncomfortable about whether it is accurate. The bond,if still in existence,is part of the purchase price. If all of the resales were evaluated using valid appraisal techniques and applying appropriate adjustments for physical, time , and economic conditions, I believe the there would be little dispersion based on the amount of the bond. I also believe that there is less dispersion in price between new and used homes , again when appropriate appraisal techniques are used. I am neither an appraiser nor real estate salesman, but I do believe in using QUALITY practioners not just relying on anecdotes.

Further as some others have suggested repayment of the bond early would make sense for most people unless they could find a very secure investment at rates higher than the bond interest rate. If you know of such an investment please share it with us all.:spoken:

I have been tracking sales for 4 years and have two huge spread sheets of data. I even take the ultimate price paid down to the square foot of home and square foot of lot based on a formula I developed from lot premiums and home prices. Difficult to do because a base home price includes a basic interior lot. But I have something that works for me. On average of the homes with bond paid, they recover about 46% of that amount when compared to a like home with a bond. So unless you are fairly sure your going to stay in your home for the remainder, paying off the bond is probably not a great idea. However if you do plan to stay there, at the interest rate they collect it is a good idea. Just take the annual payment, divide that into the total bond owed, equate that number to years and decide if you will be there 70% of that amount of time. If that answer is a definite yes, pay it off. If no or I don't know, wait.

Nice info and I think that it helps my argument that more than anecdotes are needed for good decision making. Square footage is a determinent of value but so is "location, location,location" as well as upgrades , and other items that might be included. Not knowing the real financial realities relating to a specific property is like signing a loan document without reading it.

location
 

Isn't it always about location

Resales
 

Re-sales have a "wear & tear" factor to look at. At some point the roof, HVAC, water heater, appliances and kitchens will need replaced. New homes should be more energy efficent. Some re-sales are priced higher than new,even when looking at the bond. Need to look at all factors whether you buy new or re-sale. Need to do what you are comfortable with. When you buy new the "wear & tear" factor kicks in.

Why do you say a new home would be more energy efficient? We have a block home with double pane windows purchased new in 2006. I don't see that the block homes being built in 2011 are any more energy efficient.

A small side car trip
 

[QUOTE=Tbugs;356147]Bill -

I have never heard of "FWIW". What does it mean? I tried to figure out some connection with popcorn but couldn't think of any.


Don't feel bad... I used to think LOL meant, "Lord O Lord". (I'm a dolt sometimes)
Reminds me of the great scene from "The Odd Couple", when Oscar Madison complained about the notes Felix kept leaving him:
"Pick up your socks. FU..... Take out the garbage. FU... It took me six weeks to figure out that FU meant Felix Unger!!!!"

Okay, back to business! :jester:

Perhaps the intent was better energy efficiency in the form of appliances, etc. that consume less power - fridge, dishwasher, HVAC system, and so on. Just my interpretation..... :)

Bill

Another good point- all systems have wear out dates -all appliances, heating and cooling , roofing etc, Again these must be factored in when deciding whether a lower bond(usually older home)is really a better investment. A properly prepared appraisal with appropriate adjustments for time, location and useful life is also important. If these considerations are factored into the spreadsheet, then the possibility of a good decision is enhanced. Low or no Bond does not necessarily mean a better value.

Not to mention the Low E windows that are being installed in the new homes. That makes a ton of difference in the cooling bill if you get a lot of sun.

HVAC system
 

It would depend on your HVAC "SEER" rating. TV was using 10 SEER units until until sometime in 2006 or 2007. The last time I checked (Feb 2011) They were using 13 SEER units. A 13 SEER unit would use about 25% less energy than a 10 SEER unit. IN 2010 the law require minimum 13 SEER units. The make units as high as 26 SEER but TV does not offer upgrades. Todays "energy star" applinances use 20%-30% than those made in 2006. I was not aware they are using Low-E glass now, but would be a big help with the FL sun during the A/C season.

It would take many, many years to make up for the difference in energy costs to come to a saving of $25,000 just in bond difference. Add in the ability to get a CBS house (after being checked out by a home inspector) for a lot less money than a new house (by being able to negotiate with the seller), not paying for upgrades that are really basic items, and IMHO you have a better deal.

Of course, like I always say, lots of people love having a brand new never lived in home. I have done that and it is a great feeling. This is NOT to criticize anyone at all.

I might have even gone the new home route myself - but it was necessary to move in to The Villages ASAP for reasons.

No matter if you are in a brand new house or a re-sale house, The Villages is a great place to be with wonderful people everywhere.

I live outside Tampa, in a CDD, and I have a hefty CDD payment, which is paid through my taxing jurisdiction. However, it is not handled the same and we don't pay interest on it, and if our CDD had not refinanced the loan, we wouldn't be paying one now. It is not financed over 30 years. It started out being financed over 10, and I can't pay off my share. So, I actually like the way it is separated out in the Villages, where I can choose to pay interest and pay over time, or pay it off.

I think on the bond issue you must do what you are comfortable with doing. When I saw that only 375 dollars of 1600 dollars a year was going to my principal... I said I want to pay off that 30 year bond. Hopefully I will live in the house for many years and the kids will then have it...or I will have to advertise it as bond paid off. I can not get 6.5% anywhere now in an account...so I am happy to pay it off...other people are not comfortable so they will not pay it off. I plan to pay myself back and then use the money for something else later...who knows what that will be.

the bonds pay for the infrastructure of your area....some builders add this cost to the price of the home and you would just have it added to your mortgage....in TV they have a unique way of making more money... you can pay your bond over 30 years and in most cases pay more than 2 times what your original bond was. Something to consider on paying it off would be your age....I move into TV at age 50 so I thought if I'm around another 20/25 years it was better to pay it off 1st year

Wish I would have figured that out the first year and not the third year...it is even better to get it added to your mortgage payment at a low rate.

The bond on a designer house that cost approximately $350,000 in the village of Charlotte is just under $20,000.

The amount of bond for your home has absolutely nothing to do with the price of the home. It is based on how many acres are in your unit which is then divided by the number of lots. Your house can cost approx $350,000 and your next door neighbor's house can cost $199,000 and you're both going to have the same bond payment.