[Tom C]

I have ALWAYS SAID that the bond amount should be ADDED to the asking price. That is the ONLY WAY to compare apples to apples when looking.

When we purchased a home, the bond was 100% paid off. As a prudent buyer, ALWAYS DISCOUNT THE OFFER by at least the amount of the bond (then additionally whatever you feel is prudent to make the offer remain attractive to the seller).

Be an educated buyer or be a sorry buyer - your choice.

[Dond1959]

Originally Posted by Tom C

I have ALWAYS SAID that the bond amount should be ADDED to the asking price. That is the ONLY WAY to compare apples to apples when looking.

When we purchased a home, the bond was 100% paid off. As a prudent buyer, ALWAYS DISCOUNT THE OFFER by at least the amount of the bond (then additionally whatever you feel is prudent to make the offer remain attractive to the seller).

Be an educated buyer or be a sorry buyer - your choice.

Say I am a seller and selling my home for $300k with a $20k bond. You come in and offer $280k, in the current market your offer would be rejected without a counter offer. Prices on real estate are supply and demand. Right now the sellers rule and bonds are part of most home purchases. As a buyer you can request to see only homes with no bonds, but that could limit location and home type.

The most reasonable advice I have seen on bonds is to not pay them off right away in case you decide to move. If you pay it off and then move you will never get the bond value back in the sales price.

[Tom C]

Originally Posted by Dond1959

Say I am a seller and selling my home for $300k with a $20k bond. You come in and offer $280k, in the current market your offer would be rejected without a counter offer. Prices on real estate are supply and demand. Right now the sellers rule and bonds are part of most home purchases. As a buyer you can request to see only homes with no bonds, but that could limit location and home type.

The most reasonable advice I have seen on bonds is to not pay them off right away in case you decide to move. If you pay it off and then move you will never get the bond value back in the sales price.

You are correct, if the buyer is emotional about the purchase. Plus, as you point out - It is a sellers market, so offers need to be thought out.

What I am saying is that buyers, when comparing homes for sale, they need to know the whole story about what they are buying. The bond can be a big part of that decision and they should not be blind to it.

Buyers should NOT rush into any purchase (and it should not be driven by emotion). This is a BIG DECISION. I looked for more than 18 months and made a good purchase, even in a sellers market.

Be sure, as a buyer, that one is making a good decision for YOU. There are LOTS of homes for sale. The right one will come around in time.

[Topspinmo]

Originally Posted by Marathon Man

Yep. This issue, deed restrictions, etc. This is a place for discussion, not information.

Bottom line, they don’t want you to pay it off. They quadruple double the original cost. I’d you pay it off, they lose money and you have more money. No loan is in You’re best interest

[Challenger]

Originally Posted by Topspinmo

Bottom line, they don’t want you to pay it off. They quadruple double the original cost. I’d you pay it off, they lose money and you have more money. No loan is in You’re best interest

Who is the they that you are referring too. The developer does not own the bonds.

[hifred123]

The developer collects the interest and the administration fees on the bonds. Our interest on our bond (we live in Charlotte - unit 196) is $1,174.13 and the administration fee is $97.59. The actual bond payment is $354.78. That is highway robbery. How was this interest rate determined? We just bought our home in August you can bet I am paying off the bond before July to avoid having to pay any more interest to The Villages.

[hifred123]

The interest on the bond over the 30 years is double the cost of the actual bond and the administrative fee is also costly. So if you have the money to pay off the bond I can't see not doing it.

[Goldwingnut]

Originally Posted by hifred123

The developer collects the interest and the administration fees on the bonds. Our interest on our bond (we live in Charlotte - unit 196) is $1,174.13 and the administration fee is $97.59. The actual bond payment is $354.78. That is highway robbery. How was this interest rate determined? We just bought our home in August you can bet I am paying off the bond before July to avoid having to pay any more interest to The Villages.

The developer has no interest in the bond or the collection of the bond assessments. Their interest ended when the construction efforts ended and they were paid for their infrastructure work.

These bonds are managed by the respective CDDs, in your case CDD-9. The bond rates were established by the underwriters when the bonds were issued and it is just like a loan you take out on a car or your home. The P&I paid are determined by the amortization schedule, with the interest paid each year decreasing as the principal decreases each year. Check your mortgage amortization schedule if you have one and you will see it looks the same.

You are not paying interest to The Villages, you are paying it to the bond holders. You may actually have some of these bonds in your investment portfolio.

If you have specific questions about you bond contact the Finance Department at 352-753-0421.

Since you're new to The Villages I highly recommend you attend the Resident Academy. It is a 5 hour class held once per quarter and is free. Go to the districtgov.org to sign up. The class covers may of the areas that new residents, like yourself, do not understand about how and why the community runs as it does. It is time well spent.

[Challenger]

Originally Posted by hifred123

The developer collects the interest and the administration fees on the bonds. Our interest on our bond (we live in Charlotte - unit 196) is $1,174.13 and the administration fee is $97.59. The actual bond payment is $354.78. That is highway robbery. How was this interest rate determined? We just bought our home in August you can bet I am paying off the bond before July to avoid having to pay any more interest to The Villages.

Bond principal and interest goes to bond holders ,not to the developer. The bonds were sold to investors. Get your facts straight before passing erroneous info.

[biker1]

Your interest rate is just shy of 7%. This is nearly twice the current 30 year mortgage rate. The bond is amortized just like a 30 year mortgage so it is front loaded with interest. After 10 years, you will have paid a total of about $16K and about $3K of that will have gone to principal. The administrative fee alone is nearly $1K for those 10 years. Since none of this is an ad valorem tax, it is non deductible on your federal taxes. The future value of the money, if invested, notwithstanding, if you will be in your house 10 years it is probably worth paying off the bond because you will wind up paying the money one way or another. If you pay off the bond, take the annual savings and dollar cost average it back into equities.

Originally Posted by hifred123

The developer collects the interest and the administration fees on the bonds. Our interest on our bond (we live in Charlotte - unit 196) is $1,174.13 and the administration fee is $97.59. The actual bond payment is $354.78. That is highway robbery. How was this interest rate determined? We just bought our home in August you can bet I am paying off the bond before July to avoid having to pay any more interest to The Villages.

[Altavia]

How does inflation factor into this decision?

[Goldwingnut]

Originally Posted by Robbie0723

How does inflation factor into this decision?

It doesn't, the bond rates are fixed.

[Ben Franklin]

It's easy to find out what your bond amortization is, and the interest rate on your bond. Go here and look up your village or villas: Bond Amortization Schedules

[Altavia]

...

[Challenger]

Read posts by TomC and Goldwingnut on this thread. Two posters who know what they are talking about.

So many posts by people who have no understanding of the transaction giving advice that could be financially damaging to those seeking understanding. Happens far too often on TOTV generally.