I believe you meant to say PER YEAR, not per month as per month would be $396,000

Pay it, save money and one less headache.

:bigbow:

Depends how you invest that $18k. If you’re in “the Market”, yeah you’re taking a bath. There are other avenues. Look at “Self-Directed IRAs” and real estate…we took our money out of the market in 2019 and haven’t looked back. That was after the last “financial advisor” told us “you just gotta hold out for the “long-term!” I was 61 then…”the long-term is here”, I told him…greeted with only a blank stare

The bond on our first home here—a Designer—had been paid off by the original owner, so we never gave it much thought. It was our understanding that the bond was the same amount for all homes in a neighborhood, no matter the size of the home, and that the one on our home had been about $12,000. We lived in that home for 2.5 years.

For our second home (built the same year as our first), we 'downgraded' to a Courtyard Villa which resulted in a larger home with features we learned in our first home we really wanted—a separate eat-in kitchen, an entry hall, a larger lanai, a larger master bedroom, generally lighter and brighter, and infinitely more privacy—the tradeoff being a smaller garage. The bond had NOT been paid off. This has turned out to be, as put earlier, our 'forever home,' but even not knowing that initially, we paid off the bond rather than have it running for another 25 or so years; the total payoff was about $5,500.

Doing so worked for us; I'm not saying it would work for everyone. Then too, we hear current bond figures are outrageously higher today than when we bought. Several years ago there was a big to-do about a 25% property tax increase. That didn't seem accurate for us, so we pulled out our tax bills for all the years we had lived here to find that our taxes had NEVER varied more than $20 up or down; that one year we actually did have an increase—of a total of 8%. Fiscally speaking, we have no complaints.

IMHO, the bond misleads enthusiastic homebuyers to overlook it as part of the price of the home they're buying. But that's a whole other story in itself....

Bond payoff
 

They tell you that the bond is at a low interest rate, but they don't tell you about all the admin fees they take.

Best to (a) pay it in cash.... (b) add to your mortgage....(c) if mortgage free, pay it on a Home Equity Line of Credit - low rate and pay as you wish - no penalty.

Or....$1,100 per year which feels like it takes forever.

That Bond number is annual not monthly and paid with your taxes.

Paid it off at closing. My rate for the bond was about six percent. Stupid waste of money over the life of the bond. Anyone buying a house sharpens their pencils when doing the math and should be calculating that bond payment along with all the others expenses related to the home. Do not think that most do not.

AS I said earlier in the thread two very experienced real estate agents said we will not get the value of the bond added to the price of the house on selling. No reason to believe they are both wrong

Correct, over the life of the bond. But, you also need to factor in how long you will keep the house. If you sell it in less than 4 years or so, you will lose a lot more money than the 6 percent interest payments.

What we did was take out a home equity loan and paid off the bond. This way you can at least write off the interest and probably at a better rate than you're paying on the bond.

Interest rate is different for every CDD. So you have to know yours. I’m a realtor and my is paid. Not sure you get it back dollar for dollar but, I T hi no it makes the home more attractive. Just like hardwood floors.

It's a typo- when I multiplied that figure by 30 years it would have been close to $400,000 if it were monthly.

So, in conclusion (?), it’s about 50/50 on paying off the bond vs not. Interest and Admin fee are undesirable, but tolerated, or considered a deceitful hidden fee to some.

Our bond fee is monthly within the escrow. If I had an extra stash of cash, I would pay it off to reduce monthly outlay and divert that “savings” to other debt.

Everyone has his/her own tolerance level for paying debt and for various reasons.

The real estate agents may be correct for some buyers, but I can assure you when we moved to the Villages we added any remaining bond to the asking price to make true cost comparisons between homes. We ended up buying a zero bond house. Anyone who does not do that is not a very educated buyer.

Some buyers will do this but others will not. You are more astute than most. If a good market for the seller you have a much better chance of getting the bond paid back.

In a down market like I think is coming you will be hard pressed to get the bond paid back.

Don't pay off bond
 

We too had this dilemma. Our home was built in 2009 and we are the 4th owner so the bond has been paid down by previous owners. We plan on staying in this home but plans change so we decided we did not want to pay off this bond with money doing well (at the time) in investments and then buy another house (perhaps down size) and have yet another bond.

If we stay here another 7 years, the bond will be paid off and that money will be a nice boost to our budget.

The Villages Bond
 

If you have ever bought a newly constructed home other than in Florida, you paid only one total price, which includes the Infrastructure costs (Roads, Utilities).

As far as paying it off DON'T.

Reasoning, You pay only 5% interest for the bond payable as it is added to your yearly Real Estate tax payments.

Our 1st house in TV, both were 5K yearly.
On our 2nd house in TV, both were 4.2K yearly.
Our 3rd house is South of TV, has No bond, and RE Tax under 1K yearly.

If you are appropriately invested, other than perhaps this year (2022) you are way ahead on investment income hopefully a lot more that the 5% interest bond payment.

Just another way for the "Money Hungry Morse Clan" to make even more money on your new house than they make unprecedented profits on.

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Well said
I also considered the break even point as about 15 years when deciding whether to pay it off or not
- Will I live for another 15 years?
- Will I live in The Villages for another 15 years

Paying it off over the 20 year term might be a good idea. The municipal bond has a very low interest rate, much lower than any individual can get. So the question is—can you get a higher rate of return investing the $1,100 per month than the muni bond interest rate? The answer is almost certainly yes.

So, when you sell your house, make sure that you tell the selling agents that they can only show the house to educated buyers.

According to 15 to 20 above posters it’s not monthly!:ohdear:

The “money hungry Morses” don’t make any money by financing the infrastructure with bond proceeds. The other alternative used by most developers is to let the local government finance the infrastructure and let them pay for them by increasing property taxes. Almost for sure local governments would not create infrastructure as complete and attractive as done by the Developer.

You get what you pay for!

I get people wanting to be debt free. But the bond is more like a deferred infrastructure tax than a debt.

The bond is not like credit card debt. Bond debt transfers to the new buyer when the home is sold. Credit card debt follows where ever you go.

No real estate agent will guarantee getting a higher asking price for a home with a bond. In this market, the difference is often less than a percent of sales price.

Even better to not pay off If inflation plus savings rates are greater than Bond interest.

Your essentially giving part of your or your heirs estate away to a future buyer paying it off.

Exactly! This is why I think of it as a deferred tax.

In return we each own a piece of the infrastructure around us from day one.

K i s s
 

let the person you eventually do it as well as subsequent purchasers. Probably 3 to 5 in 30 years

I just don't like paying interest, so I paid off the bond, your mileage may vary.

Most buyers can do math.

And...while the administration fee reduces as the balance reduces, it doesn't reduce very much. My bond balance is around 7K. Interest rate 4+%, administration fee around $50.
In the last few years of the amortization, the balance gets to 4K, 3K, 2K etc, and the administration fee only goes down a dollar or so. So the effective % compared to the balance gets pretty high.

They certainly could but often do not.

Even if they do the math and they are willing to pay an extra $20k for the house because the bond is paid off, at today's current mortgage rate of 6 percent, that is an extra $1,200 per year in interest. For some buyers, that may disqualify them for a mortgage. But, as I understand it, mortgage lenders do not even consider a bond on the house when they appraise the house or determine the buyer's mortgage eligibility.

All developments that I have lived in, the developer pays for the infrastructure - roads, utilities, etc. and pays for them from the profits of selling the homes. When the developer has completed the development he turns over the ownership of the common facilities to the Property owners, who then own the common facilities and decide what to do with and pay for them. Not so in the Villages. The developer charges a Bond to pay for the infrastructure, and the developer it turns out owns the common facilities and charges the homeowners a monthly fee to use them. So the property owners pay for the facilities, but the developer owns them and he can do what he wants with them. Close down amenities, convert common areas to apartments, whatever. Can't wait to see what else the greedy kids of the developer have in mind. Convert all of the golf courses into apartments? I know the response - if you don't like it here then move. So I have.

But yet you still post in ToTV.

:1rotfl::1rotfl::1rotfl:

Let me repeat.

:1rotfl::1rotfl::1rotfl:

Clueless statement.

Clueless statement.

Keep in mind that a homeowner that has a mortgage with an escrow account does pay into the escrow account monthly for entire tax bill due on October which includes taxes and the bond...

Why then do you read and post about the Villages? BTW you have not been missed.............

Do the math! The bond interest rate is probably less than you are earning on your investments. You can pay the bond off at anytime; there is no rush.

Ask the district what your specific bond’s interest is! They are not all the same.

they'd have to be giving me money to earn less than I've made on my investments the last month.barf