[dewilson58]

Originally Posted by biker1

Yes. For my bond, the admin fee is about 0.4% initially with a bond interest rate of just over 5%. It, of course, steadily increases, as a percentage, with time.

nevermind.......the prez posted numbers

[NY2TV]

If you are just buying a house and taking out a mortgage, it your mortgage interest rate is lower than your bond rate, add more to mortgage and pay off bond. If you already own, it depends on what your bond rate is and how much your money is earning for you. If you are earning more than bond rate on your investments, don't pay it off. If you have extra money sitting in a low interest savings account getting, then pay it off. Make sure you won't need that money or else you may need to borrow it later at a higher rate.

[OhioBuckeye]

Originally Posted by retiredguy123

I hate debt, but I have not paid off my bond. I think the biggest disadvantage to paying it off is that you will lose money when you sell the house. You will not be able to convince a buyer to reimburse you for the money you used to pay off the bond. And, very few people actually know how long they will keep their house before selling.

That’s exactly what I thought & why I didn’t pay my bond off!

[Villages Kahuna]

If you do the arithmetic, it’s probably never wise to pay off the bond early.

The municipal bond interest rate on The Villages development bonds is around 5% I think. You certainly couldn’t borrow money to pay off the bond at anything close to the municipal bond rate. Equally certainly, it probably would be easy to earn returns on the investment of the funds needed to pay off the bond before maturity that probably would exceed the bond coupon.

Also as noted above, if you sell your home you won’t enjoy a higher sales price because it is “bond free”. You can list it as a feature of the house, like a view, pool, landscaping, etc., but like any of those features, it’s unlikely that you will benefit in a higher sales price because the bond was paid off.

Unless you simply have a strong resistance to debt, paying off the bond early is probably a bad idea.

[Chateau]

Totally Agree. If you earn more (after tax) than the rate on the bond don’t pay it off

[Jazzman]

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

Maybe you should go back to the same realtor and ask their view on resale homes that have no bond. Realtors I’ve spoken to all say that’s a plus versus a resale with a bond

[jebartle]

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

Or move to Lake County, no bond.

[charlieo1126@gmail.com]

I’ve already sold 4 homes in villages soon to be 5 and altogether in Florida a total of 10 in 30 years I’ve never put more then 20% down , why waste your money when the interest rate is so low .Paying off the bond if your going to move is never a good idea I never had a problem , you may get a few people who will try to low ball you because of bond but your house will sell for the price it’s worth , one of my homes here sold for more then a neighbors who paid off bond the only difference was s fee upgrades

[DAVES]

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

This question comes up often. If, you call your bank they will tell you the phone number of the office that administrates the bond. I wish I had the number to give you. They were helpful and can give your the right answer to your question as to when. The question is when the interest is applied.
As you will see from other posts, to pay it off of not is not that simple. Is the payment deductible to you? Where will the money come from to pay it off and what are you earning on that money? As to the 6%, it is not negotiable. I may be wrong but we bought new about 8 years ago and it was 5%. On a resale, it may be lower. Do not act on my advice without checking but, I was told the interest rate will renegotiate in two years.
Others posted that the realtors tell you if you pay off the bond you will not get anything more when you sell. In my mind that is a Villages rumor. Think, when you sell you are selling to one person not an average. Say you have a pool. It cost you serious money.
If, I was buying your home I would not want it. Someone else may be thrilled. Same is true of all the commonly done things, landscaping, etc. As to the bond, if I was buying a resale and the bond was paid, it is an added value. If, for example a home needs a roof you would lessen your offer compared to a home where they have a more recent roof.

[tophcfa]

Originally Posted by Villages Kahuna

If you do the arithmetic, it’s probably never wise to pay off the bond early.

The municipal bond interest rate on The Villages development bonds is around 5% I think. You certainly couldn’t borrow money to pay off the bond at anything close to the municipal bond rate. Equally certainly, it probably would be easy to earn returns on the investment of the funds needed to pay off the bond before maturity that probably would exceed the bond coupon.

Also as noted above, if you sell your home you won’t enjoy a higher sales price because it is “bond free”. You can list it as a feature of the house, like a view, pool, landscaping, etc., but like any of those features, it’s unlikely that you will benefit in a higher sales price because the bond was paid off.

Unless you simply have a strong resistance to debt, paying off the bond early is probably a bad idea.

I agree and disagree with the above. The part about being able to easily earn more than the bond rate through investments is misleading. First, you need to earn more than the bond rate, after taxes. Second, and more importantly, in the current market environment, it is not easy to earn more than the bond rate without taking a fair amount of risk. Interest rates are near zero, so forget about earning your target ROR with relatively risk free bonds, which leaves one investing in much more risky (volatile) investments, at a time where the stock market is hovering at it's all time high and a lot of both economic and political uncertainty. Paying off the bond, is a risk free investment with a guaranteed ROR. I agree that you will probably not recover the full cost of paying off the bond if the home is sold.

[biker1]

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

Originally Posted by Mrprez

Not quite. In the beginning it is 1/3 to the bond and 2/3 to interest and admin fee. Amortized over 30 years.

[KRM0614]

Originally Posted by CWGUY

From the District Web Site:

Residential Bond Assessment Information

Residential Bond Assessment Information
The infrastructure of the District in which you live was built with tax-exempt bonds. The bonds are repaid with monies collected in the annual tax bill sent out by the County Tax Collector's Offices and appear in the Non-Ad Valorem section of the tax bill as "Bond Debt Assessment".

You may pay off your bond assessment in full at any time. You are not required to pay off this assessment in advance.

If you choose not to pay off the bond debt before the “July cut off date”, the annual assessment will continue to appear on the tax bill until the debt is paid off.
If you choose to pay off your remaining bond assessment before the July cut off date, the yearly installments will be eliminated from your annual tax bill.
If you pay off your bond between the July cut off date and September 16th you will owe no additional interest; however, you will still have one more annual bond assessment on your tax bill.
If you pay off your bond between September 17th and March 16th you will owe six months additional interest.
If you pay off your bond between March 17th and the following July cut off date, the full annual assessment of interest is owed.
Contact the Bond Unit at (352) 751-3900 for your Bond Payoff amount.

The July cut off date is July 16, 2021 to eliminate the bond assessment on your 2021 Tax Bill.

The bond is paid off but the maintenance line item is there forever you never ever get rid of the greed.

[KRM0614]

Originally Posted by Stu from NYC

That is exactly why we do not plan to pay off the bond early.

Have heard they might refinance the bonds to reduce the interest rate.

No they won’t reduce the interest rate !
That’s just gossip ! TV makes the owners pay for everything. It’s ingenious

[KRM0614]

Originally Posted by JohnN

The interest rate is high. If you're planning to say, just pay it off.

Wrong

[biker1]

No greed involved. The annual maintenance fee, about $500 in my CDD, pays for maintenance of various CDD assets.

Originally Posted by KRM0614

The bond is paid off but the maintenance line item is there forever you never ever get rid of the greed.