[Tom Hannon]

Wonder why the bond price are different?

[Russ_Boston]

Read the link in my post above.

Each parcel in a unit pays the same. Other units are a different price based on density of the unit.

[Kelsie52]

Originally Posted by Tom Hannon

Wonder why the bond price are different?

Russ is correct as usual --our Unit has 166 designers --the yearly maintance is a little over 700 biut due to the denisity ,the bond is shared over all the l;ots no matter the size or location

[actor]

Originally Posted by GuyWin

I just calculated the interest being charged on my CDD Debt Assessment (Bond) if we finance it over 30 years instead of paying it in full. This does not include the Maintenace Assessment that never goes away.

• Our CDD Debt (bond) in Pennecamp is $20,268.61.
• The annual amount each year for 30 years is $1,652.69.
• The annual rate to amortize $20,268.61 for 30 years @ $1,652.69 a year comes to 7.2%. Over the 30 years we will pay a total of $49,580.
• That's almost two and a half times the bond itself!
• Paying the bond in full would save us $29,312 in interest.

does anyone know if all that interest is tax deductable?

[Kelsie52]

Not on the bond ...

[getdul981]

Originally Posted by Kelsie52

Not on the bond ...

"And there's the rub"

[aljetmet]

Don't pay off the bond and you pay 7.2% for 30 years

Get a 30 year mortgage to pay off the bond for less than 5% and it's tax deductible. I think you save money taking this choice for how long you own your home. When it comes time to sell I would market my home to make sure prospective buyers are aware of the value you have with a bond free home.

Either choice it's still a loan that has to be paid. So for those folks who have a bond to pay and who think they are debt free you're really not....

[Rosalie]

Regarding a 30-year mortgage to pay the bond: do you mean a home equity or "second mortgage?"

[Pturner]

Originally Posted by Rosalie

Regarding a 30-year mortgage to pay the bond: do you mean a home equity or "second mortgage?"

You could use the primary mortgage if you could borrow enough to pay the bond at closing and/or reducing your loan down payment.

This is easier said than done however, because a lending institution might only loan 80 percent of the lending institution's appraised value of the home, and require a 20 percent down payment.

[JimJoe]

Originally Posted by bkcunningham1

For what it is worth, I found this blog from a realtor who deals with TV and I think it is very helpful in understanding bond and other issues in TV. I think the information is correct. If someone reads it and disagrees, enlighten me please.

In her blog, she states why realtors don't recommend paying off the bond, "We do not recommend paying the bond off. The main reason is the fact we cannot resell your home for X amount higher than other homes that are on the market at that point just because you paid the bond off."

http://activerain.com/blogsview/1484...ult-community-

Why can't they resell your home for X amount higher than other homes that are on the market at that point just because you paid off the bond? That makes no sense at all. Do they not tell customers about the outstanding bond on the homes not paid off? Do they not make it clear to buyers before an offer is written that there is an unpaid bond that increases the cost of the home? If they do not, that is wrong.

Personally I think this bond on your home thing is an unfortunate negative in TV, with negative connotations that I will not list here because many of them have been listed in previous links.

[Sherman931]

I understand the bond and what it it is for (infastructure). My position is that I view it as a form of property tax (taxes in TV are lower than what I currently pay) that I will have to pay it each year. I suppose if I had $20K to burn I might pay it off and let my heirs figure out how to price the house if they choose to sell it.

[aljetmet]

Originally Posted by Pturner

You could use the primary mortgage if you could borrow enough to pay the bond at closing and/or reducing your loan down payment.

This is easier said than done however, because a lending institution might only loan 80 percent of the lending institution's appraised value of the home, and require a 20 percent down payment.

Very astute of you for this caveat. However, most TVers have big down payments, or have the means to pay in full. I would venture to say for most this would not be a problem but of course everyone has their own financial situation.
If for a frog that did not payoff originally their is always other options such as a home equity but that has risk as rates will go up. To get a mortgage for the first time just for the bond however may not be prudent either as the cost of the mortgage origination is something to consider. I guess I make my recommendation based on of 30 mortgage rates that are currently way below 5%. So, if you plan on borrowing for the home might as well finance the bond as well.

[batman911]

Does anyone except me think that 7% interest is a little high considering what banks currently pay for deposits. Who collects the interest payment?

[villages07]

The coupon on current bonds is closer to 5.25%; In the boom years when interest rates were higher, some of the infrastructure bonds were issued at 6.5%. Then Sumter county tacks on a service/processing fee each year to collect the payments from homeowners (before turning over the funds to the CDD to pay off the bondholders). This makes your payback rate a little higher.

CDD Bonds will always be 'priced' higher than mortgage rates because they represent (theoretically) a riskier investment than a secured home mortgage.

Actually, I've bought some of the earlier CDD infrastructure bonds as investments on the bond resale market. Some have sold below the 100 par value to boost the yield. I have bonds yielding (based on my cost) between 5.5 and 7%, tax-free. Give what I know about The Villages and the CDD government structure, I feel these are a safe investment. Not sure I would buy the recreational bonds that are in dispute with the IRS.

To the latest question, the interest on the bonds is paid to the bondholders (investors).

[downeaster]

Originally Posted by bkcunningham1

For what it is worth, I found this blog from a realtor who deals with TV and I think it is very helpful in understanding bond and other issues in TV. I think the information is correct. If someone reads it and disagrees, enlighten me please.

In her blog, she states why realtors don't recommend paying off the bond, "We do not recommend paying the bond off. The main reason is the fact becauswe cannot resell your home for X amount higher than other homes that are on the market at that point just e you paid the bond off."

http://activerain.com/blogsview/1484...ult-community-

If I were selling my home and the Realtor told me "we cannot resell your home for X amount higher than other homes that are on the market at that point just e you paid the bond off." I would look for another Realtor.

There is a lot of confusion and misunderstanding about the bond issue among those of us who live here. So, I presume it is even more confusing for for the first time buyers. If I were to put my house up for sale I would advertise it as "BOND PAID" then I wouldn't have to announce, "By the way, my selling price does not include an extra $XX,XXX.XX".

Any Realtor worth his/her salt should be able to handle the sale of a home whether or not the bond is paid off.