[PennyAnn]

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.

Originally Posted by bsloan1960

New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
Bill

[mikeritz53]

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

[merrymini]

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.

[Stu from NYC]

Originally Posted by merrymini

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

[retiredguy123]

Originally Posted by merrymini

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.

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.

[fastboat]

Originally Posted by bsloan1960

New owner/first time- closing at the end of June.

(using approx. numbers) $20,000 bond paid over 30 years @$1100 per month = $33,000... Ouch!

I assume this is why some people choose to pay the bond off in cash. I called the Development District and there is no creative way to reduce the interest payments- it's either pay it off in full or pay it monthly.

With this in mind what is the best way to pay this bond?

Thanks,
Bill

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.

[Dlbonivich]

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.

[bsloan1960]

Originally Posted by crash

That is $1100 per year it appears on your tax bill.

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

[txfan]

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.

[toeser]

Originally Posted by Stu from NYC

We moved two years ago and thought about paying off bond also about 20,000 at the time.

Two different real estate agents said do not expect to be able to add no bond to the value of your home. Since we are still not sure that we will stay in our first home here decided for now to make yearly payments/

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.

[Stu from NYC]

Originally Posted by toeser

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.

[snbrafford]

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.

[geobar]

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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Originally Posted by Stu from NYC

We moved two years ago and thought about paying off bond also about 20,000 at the time.


Two different real estate agents said do not expect to be able to add no bond to the value of your home. Since we are still not sure that we will stay in our first home here decided for now to make yearly payments/

[Travelhunter123]

Originally Posted by retiredguy123

I agree with not paying off the bond. But, when you pay off a second mortgage, you always get your money back, dollar for dollar. It has no effect on what the buyer pays you for the house. When you pay off the bond, you need to hope that you can sell the house for enough extra money to recover the amount of the bond that you paid off. That is why it makes sense to not pay off the bond.

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

[Villages Kahuna]

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.