[KRM0614]

Originally Posted by charlieo1126@gmail.com

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

But you used the villages to sell your house and they charged you 6% when others are only charging 6% now. Everything is negotiable

[biker1]

I took a closer look. It appears that the annual administration fee is about 0.4% of the initial bond amount - the higher the initial bond amount the higher the administration fee. Near the end of the 30 years, this represents a pretty large percentage of the outstanding balance.

Originally Posted by biker1

My admin fee is about $95 per year. I wonder why the admin fee is less in the example you posted ($60+).

[Kenswing]

The interest rate for our bond will be 3.67%. Why pay it off? I can take that $30k and invest it in something that pays a better return.

[jbrown132]

Originally Posted by TNLAKEPANDA

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

I think it’s pretty simple. These assumptions are based on the premise you are never going to move. If you are 70 and have 10 years left on the bond pay it off if you have 15 or 20 years left you just may want to pay yearly. If you are 60 and are in reasonable good health and have 10-20 years left I would pay it off. Anything over 20 it’s probably a crap shoot. If your 55 and can afford it, pay it off. If you are 80 or older. It’s not worth it.

[Cheapbas]

The interest rate is near 7 but is dropping to 3% on February 1st. My payment of 1600 was 1100 in interest

[patfla06]

Originally Posted by TNLAKEPANDA

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

We paid our bond off after the first year.

We knew we loved it here and love our house so we paid it off.

We are in our 60’s, live in our houses 15-17 years and have no plans to ever move.

Why pay DOUBLE for the bond over time. We also hate any debt.

[golfjuly11]

We just paid off our bond last year. We have owned our home for 6 yrs. and do not intend to sell. We paid it off after we refinanced to a 15 yr. mortgage. The interest on the bond was the tie breaker to pay it off.

[Challenger]

Most of the info offered on this issue is either, dead wrong, self serving(realtors) , misguided or otherwise questionable . The biggest issues in the decision are: what is the interest rate on the bond that you are inheriting, whether you have excess cash, or low performing assets, where might you find an absolute guilt edged investment that will guarantee complete safety at a rate equal to or higher that the bond interest rate. If you don't understand the computations in order to make the right decision for your situation find someone that you trust who does . Easy to make an expensive mistake in this situation.

[curler1]

It is a pretty simple financial decision. I was able to get mortgage money at 3% so I got a mortgage with enough to pay off the bond as my investments were/are paying off at double to triple that interest rate. Use others money to make money.

[Villagesgal]

Bond is so high now. When we bought it was only $3,500 so we paid it off at closing. Still in same house 19 years later and glad we paid it off. Friends just bought with a $30,000 bond. Don't think I'd pay that off. You can earn more than the 6 percent charged by investing the money wisely.

[dewilson58]

Originally Posted by TNLAKEPANDA

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

There is not correct answer (as you can tell).
This topic "comes up every year".
Lots of opinions (same every year), with no right answer.
Personal preference.

[Mrprez]

Originally Posted by Villagesgal

Bond is so high now. When we bought it was only $3,500 so we paid it off at closing. Still in same house 19 years later and glad we paid it off. Friends just bought with a $30,000 bond. Don't think I'd pay that off. You can earn more than the 6 percent charged by investing the money wisely.

If you friends just bought, they aren’t paying 6%. Less than 4% in districts 12 and 13. I only found two districts that had an interest rate of 6% or more. If I remember right they were 9 and 10.

[Timothyimitchell]

There is no advantage to carry any type of debt.

[Neils]

The whole bond concept is almost a scam on buyers.
The cost to build any house, including all the infrastructure, should be the purchase price.

The bond simply allows a lower original selling price helping the builder appear to be offering a better deal to unsuspecting buyers.

Would you consider buying a new car for a great deal, but with the engine and transmission on a separate 10 year payment plan, plus interest?

[biker1]

Nonsense to your claim of "almost a scam". Everything is upfront and spelled out, if people care to look and listen. You can use your financing for the house and use their (The Villages) financing for the bond (infrastructure), or pay cash for the house and finance the bond using their financing, or finance the bond with your own financing, or pay cash for both. Nobody is forcing anyone to buy here or use their financing for the bond. Your car comparison is a strawman argument.

Originally Posted by Neils

The whole bond concept is almost a scam on buyers.
The cost to build any house, including all the infrastructure, should be the purchase price.

The bond simply allows a lower original selling price helping the builder appear to be offering a better deal to unsuspecting buyers.

Would you consider buying a new car for a great deal, but with the engine and transmission on a separate 10 year payment plan, plus interest?