bond questions.

» Site Navigation
Home Page The Villages Maps The Villages Activities The Villages Clubs The Villages Book Healthcare Rentals Real Estate Section Classified Section The Villages Directory Home Improvement Site Guidelines Advertising Info Register Now Video Tutorials Frequently Asked Questions
» Newsletter Signup
» Premium Tower
» Advertisements
» Trending News
» Tower Sponsors




















» Premium Sponsors
» Banner Sponsors
» Advertisements
Closed Thread
Thread Tools
  #16  
Old 03-28-2013, 08:26 AM
BettyCrocked BettyCrocked is offline
Senior Member
Join Date: Feb 2013
Location: North Shelby County
Posts: 266
Thanks: 0
Thanked 0 Times in 0 Posts
Default

Quote:
Originally Posted by mickey100 View Post
That makes a lot of sense. You may not recoup all the bond but you will recoup some for sure, and will get more looks, hence better chance of selling. Not all houses sell equally as quickly or even at all, despite what some on this forum will try to tell you.

And that bond payment each year adds up quickly, but the bond balance does not drop proportionally. For example, our house, purchased 7 years ago, had a bond balance of almost $16K. Adding up the yearly bond payments, which are NOT legally deductible on taxes, we would have spent $8600 and yet the bond balance would only have dropped $1700. We paid ours off, and I'm glad we did.
Exactly. We aren't "debt and interest" people, especially when you look at those figures of paying $8600 to gain $1700. Some people are comfortable with those kind of numbers, I'm not.
  #17  
Old 03-28-2013, 08:40 AM
784caroline 784caroline is offline
Soaring Eagle member
Join Date: Jul 2007
Posts: 2,433
Thanks: 0
Thanked 5 Times in 5 Posts
Default

BTW: Bond interest rates are starting to be refinanced by the VCCD. These bonds were callable after 10 years and the process has started.... .homeowners in these districts will start to see lower bonds due in the November tax bill. I know District 4 starts refinanceing in May of this year with others to start shortly afterwards.
  #18  
Old 03-28-2013, 08:40 AM
mickey100 mickey100 is offline
Platinum member
Join Date: May 2012
Posts: 1,829
Thanks: 0
Thanked 1 Time in 1 Post
Default

Quote:
Originally Posted by BettyCrocked View Post
Ditto this. When I was looking at houses last month, I didn't even click the link on houses that didn't say "bond paid".
You may not recoup it in price, but you sure will get more looks and offers.
Quote:
Originally Posted by BettyCrocked View Post
Exactly. We aren't "debt and interest" people, especially when you look at those figures of paying $8600 to gain $1700. Some people are comfortable with those kind of numbers, I'm not.
We were not comfortable with those numbers either. Our accountant advised it just didn't make financial sense to blow all that money on interest, particularly since it isn't tax deductible, and at the time was a higher rate of interest than what we could make on our savings.
  #19  
Old 03-28-2013, 08:41 AM
cquick's Avatar
cquick cquick is offline
Platinum member
Join Date: Apr 2010
Location: Sanibel
Posts: 1,638
Thanks: 0
Thanked 1 Time in 1 Post
Default

we chose not to have the bond in our mortgage payment. Instead we are paying our property taxes and insurance separately.

Did we do the right thing?
__________________
Connie

Sterling, IL; Hunter's Creek, Orlando, FL; The Villages
  #20  
Old 03-28-2013, 08:48 AM
manaboutown's Avatar
manaboutown manaboutown is online now
Sage
Join Date: Aug 2009
Location: NJ, NM, SC, PA, DC, MD, VA, NY, CA, ID and finally FL.
Posts: 5,259
Thanks: 4,469
Thanked 1,733 Times in 622 Posts
Default

Quote:
Originally Posted by Dcljake View Post
As someone that plans to be moving to The Villages on the next year or two, I frequently look at the listings for pre-owned homes for sale. I always looks the ones that say "low bond" or "bond paid" first. I think the decision is a personal one and you have to weigh the high interest and no tax benefit of paying the bond off over time, against low interest tax deduction of a home equity loan, against how long you expect to be in the house. No one answer fits everyone.
Hear, hear! I totally agree. The reality is the cost of the house plus the balance on the bond is what one is paying for the house. Psychologically it may not feel that way which is why one may be better off not paying off the bond if he is not going to remain in the house long, then sell it.
__________________
"No one is more hated than he who speaks the truth." Plato

“To argue with a person who has renounced the use of reason is like administering medicine to the dead.” Thomas Paine
  #21  
Old 03-28-2013, 11:49 AM
JourneyOfLife JourneyOfLife is offline
Veteran member
Join Date: Mar 2013
Posts: 705
Thanks: 0
Thanked 0 Times in 0 Posts
Default

I am not an expert on the TV bond. But, the correct answer is... it depends! Some of the considerations are unique to the person(s) and their situation.

Generalizations, though they may have some truth to them, may be too simplistic.

There could be simple financial reasons to do it... that fall under the heading of "you are very confident it will cost you less money"... crunched the numbers and are sure you intend to stay.

I also can think of a number of other absolutely valid reasons why I might choose to pay the debt up front instead of payments with interest in the future for other reasons.

One might be a situation where it is my primary home and I have the money today, but might be "less able" or strained to meet my obligation of debt in payments in the future. Possibly because some future unexpected crisis might occurred later that could turn into a personal financial crisis.

I won't elaborate further.
  #22  
Old 03-28-2013, 03:43 PM
Advogado Advogado is offline
Veteran member
Join Date: Jul 2007
Posts: 877
Thanks: 49
Thanked 439 Times in 154 Posts
Default

Quote:
Originally Posted by JourneyOfLife View Post
I am not an expert on the TV bond. But, the correct answer is... it depends! Some of the considerations are unique to the person(s) and their situation.

Generalizations, though they may have some truth to them, may be too simplistic.

There could be simple financial reasons to do it... that fall under the heading of "you are very confident it will cost you less money"... crunched the numbers and are sure you intend to stay.

I also can think of a number of other absolutely valid reasons why I might choose to pay the debt up front instead of payments with interest in the future for other reasons.

One might be a situation where it is my primary home and I have the money today, but might be "less able" or strained to meet my obligation of debt in payments in the future. Possibly because some future unexpected crisis might occurred later that could turn into a personal financial crisis.

I won't elaborate further.
In addition, contrary to some earlier posts, it is not at all certain that you will not recover the bond payoff when you sell your house. In fact, I think most buyers (but not all, I agree, and I can't prove this) are smart enough to figure in the amount of the bond when making a choice between two houses-- one bonded and the other not. However, it is absolutely certain that if you don't pay off your bond, you are paying interest at a much higher rate than you would if you took out a larger mortgage on the house and paid off the bond.
  #23  
Old 03-28-2013, 08:17 PM
KeepingItReal's Avatar
KeepingItReal KeepingItReal is offline
Veteran member
Join Date: Jul 2012
Posts: 915
Thanks: 0
Thanked 0 Times in 0 Posts
Default Do the Math

Quote:
Originally Posted by laceylady View Post
Keeping It Real is speaking as a 'frog'--he plans to stay in that particular huse until he croaks. In that case it makes sense to pay off the bond or refinance it to a lesser interest rate.

I usually don't stay in one home very long. So for us, paying off the bond doesn't make sense. If we are still here in seven years (my usual time for a house) and planning to stay, we will pay off or re-fi the bond.
Don't remember telling anyone what I was speaking as so I am not sure how anyone would know that information, but I assure you I am not speaking as a frog .

If you stay in your house 10-12 years you will have paid out enough $$ to have paid off the entire bond up front. You would save the remaining 18-20 yearly payments.

Even if you stay 7 years you will have paid out over 60% of what if would have taken to pay off the bond initially and you will still owe 91% of the original bond or 23 more yearly payments which you must try to pass on to the next buyer

Since you haven't saved anything and have paid the same $$ out towards the bond now, your 7-8 year old house will have a hugh bond still to be paid while the other home will be a bond paid home. Now which house do we think will sell faster? Both owners paid out almost the same $$ for the bond even if you only stay 7-8 years.

This will be even more of an issue with the new homes right now having a so much larger bond initially than homes did a few years ago. When new homes today are 7-8 years old if paid anually their bond balance amounts will still be 91% of the original bond amount which will be a big factor for homes that old.. close to $18,000.00

Do the math.....then do whatever is right for you, no two people are the same and everyone wants to think they made the right decision. Don't forget to add the annual fee you also pay each year of over $107.00 which doesn't go to the bond or interest.

http://www.districtgov.org/departmen...Unit%20175.pdf

Last edited by KeepingItReal; 03-28-2013 at 10:49 PM.
  #24  
Old 03-28-2013, 08:22 PM
Bill-n-Brillo's Avatar
Bill-n-Brillo Bill-n-Brillo is offline
Sage
Join Date: Sep 2010
Location: Granville, OH.....and TV snowflakes!
Posts: 6,909
Thanks: 0
Thanked 0 Times in 0 Posts
Default

To me, it's a personal decision for each individual to make - pay the bond off or not. It's not purely math to some - there are those who feel they won't see an equivalent amount of money back if they were to sell within a few years of paying off their bond while others feel they will.

Do whatever makes you sleep well at night.

JMHO!

Bill
  #25  
Old 03-29-2013, 05:17 AM
Lark7's Avatar
Lark7 Lark7 is offline
Senior Member
Join Date: Sep 2012
Posts: 263
Thanks: 8
Thanked 2 Times in 2 Posts
Default

Paying the bond off is a matter of preference and expectation for each individual. For us, as long as the Federal Reserve is depressing interest rates, the bond rate of 6.99% creates a rather large margin. So, we paid our's off several weeks ago. To each his or her own.
  #26  
Old 03-29-2013, 06:22 AM
sgiamp1 sgiamp1 is offline
Member
Join Date: Jul 2011
Posts: 63
Thanks: 0
Thanked 0 Times in 0 Posts
Default

Quote:
Originally Posted by Lark7 View Post
Paying the bond off is a matter of preference and expectation for each individual. For us, as long as the Federal Reserve is depressing interest rates, the bond rate of 6.99% creates a rather large margin. So, we paid our's off several weeks ago. To each his or her own.
It was a difficult decision for us also so we decided to purchase a municipal bond ETF that pays 6% with the $20K I was going to use to pay my bond. In my mind, it's a compromise since I can cash-in at any time if I need the money. (The 6% from the ETF almost covers the interest on my bond.)
  #27  
Old 03-29-2013, 06:27 AM
mickey100 mickey100 is offline
Platinum member
Join Date: May 2012
Posts: 1,829
Thanks: 0
Thanked 1 Time in 1 Post
Default

Financially, there are many reasons why you should pay off the bond - among them, over time you will pay at least double the bond when you add in the interest. And I agree that most people are smart enough to realize that the REAL price of a home is the sum of the purchase price and the bond and factor that into the selling/buying prices of pre-owneds. But, some people have trouble coming with the extra money lump sum, so for them they may prefer to spread out the payments even though they are paying so much more. And if you really are buying a home and expecting to sell it within a couple of years, by all means don't pay off the bond. However, contrary to the real estate boom years when people were buying, selling and flipping homes, I expect the majority of buyers don't turn around and sell so quickly. As KeepingItREal pointed out, even at 7 years you are still ahead by paying off the bond, and 7 years comes up pretty quickly here. As Lark7 said, paying it off is a matter of expectation and preference for each homeowner.
  #28  
Old 04-01-2013, 05:24 PM
Lahaja Lahaja is offline
Junior Member
Join Date: Apr 2013
Location: Gilchrist
Posts: 13
Thanks: 1
Thanked 0 Times in 0 Posts
Default

We are buying a home in Gilchrist and saw somewhere else on a different forum that if there is no bond your property taxes are less??? Also that the tax rate is 1.5 - 2% of the home cost. Is that with homestead exemption status?

Thank You for your replies!
  #29  
Old 04-01-2013, 05:32 PM
downeaster downeaster is offline
Platinum member
Join Date: Jun 2008
Posts: 1,562
Thanks: 0
Thanked 3 Times in 2 Posts
Default

Quote:
Originally Posted by Lahaja View Post
We are buying a home in Gilchrist and saw somewhere else on a different forum that if there is no bond your property taxes are less??? Also that the tax rate is 1.5 - 2% of the home cost. Is that with homestead exemption status?

Thank You for your replies!
No. Although bond payments due are shown on the tax bill there is no connection between them. The county is acting as collector of the bond payments as well as taxes.
  #30  
Old 04-02-2013, 01:53 AM
twinklesweep twinklesweep is offline
Senior Member
Join Date: Apr 2011
Posts: 356
Thanks: 0
Thanked 11 Times in 8 Posts
Default NOT about paying or not paying off bond

Quote:
Originally Posted by KeepingItReal View Post
I have to totally disagree with this information above and I am certain it cannot be proven. If you want to pay 7% interest and an annual fee on over $21K which is nearly $1,500 plus a very small amount on the principal for 30 years it your call.
Is $21K the cost of the bond on typical new construction nowadays? Oh my.... In my part of TV (which is much of TV), bonds on secondary market homes usually range from $0 to $5,000. I cannot even imagine adding $21,000 to the price of my home! I probably couldn't even afford it!!! And besides, given the choice, I'd rather have more home in a more convenient location than take on a bond that can add 10% or more to the price of my home. Whew!
Closed Thread

Thread Tools

You are viewing a new design of the TOTV site. Click here to revert to the old version.

All times are GMT -5. The time now is 11:07 PM.