[OrangeBlossomBaby]

Curious, since I have no first-hand experience with bonds -

If I buy a house pre-owned, and the previous owner has paid off their yearly bond for the past 10 years that they've owned it - leaving another 20 years left on the 30-year payments...

Does that 30-year clock start over again? Or do the payments remain the same as they were, for the next 20 years? (obviously no multiple payments if I pay the balance off all at once, I'm asking only about the yearly payments)

[golfing eagles]

Originally Posted by Ellwoodrick

Very interesting perspective. Typically when a developer puts the infrastructure in for lots in a development the cost is funded by the developer. Then recouped when the lots are sold. Here the genius part of the development process is that the developer creates what appears to be a municipal bond fund for the infrastructure part of the Development. Funding or investing in the bond fund then becomes a federal tax free investment for the developer.

EXCEPT: The developer does not own the bonds. But you can----go check out the various bond issues on Moody's then contact your broker. If one thinks the developer owns the bonds and is getting rich off them, just join the party and get rich with them.

[golfing eagles]

Originally Posted by OrangeBlossomBaby

Curious, since I have no first-hand experience with bonds -

If I buy a house pre-owned, and the previous owner has paid off their yearly bond for the past 10 years that they've owned it - leaving another 20 years left on the 30-year payments...

Does that 30-year clock start over again? Or do the payments remain the same as they were, for the next 20 years? (obviously no multiple payments if I pay the balance off all at once, I'm asking only about the yearly payments)

It's like a mini assumable mortgage. You only have to pay that last 20 years off

[retiredguy123]

Originally Posted by OrangeBlossomBaby

Curious, since I have no first-hand experience with bonds -

If I buy a house pre-owned, and the previous owner has paid off their yearly bond for the past 10 years that they've owned it - leaving another 20 years left on the 30-year payments...

Does that 30-year clock start over again? Or do the payments remain the same as they were, for the next 20 years? (obviously no multiple payments if I pay the balance off all at once, I'm asking only about the yearly payments)

The bond does not start over. The new owner just continues to pay the annual principal, interest, and admin fee payments as were originally established when the bond was initiated. The new owner assumes the remaining principal, and can pay off the bond by just paying the remaining principal.

Note that whoever is handling the closing should verify that the payments are current, and if not, the seller needs to make the payments current before transferring title to the buyer.

[CoachKandSportsguy]

this topic is just so misconstrued, and mis understood, people get all ties up in their financial undies. . .

Retiredguy123 has the perfect explanation:
https://www.talkofthevillages.com/fo...302-post7.html

every house in America usually has a local property tax, which funds the local operations of the city/town, because the town/city already has its infrastructure in place over many, many years. ie, its already been paid for and installed. the property taxes are now maintenance, and additional for the remaining buildout of any new additions here and there.

here in the villages, that is not the case, the developer put in the infrastructure, and it is not free.

so there are several ways the developer can fund money for the infrastructure development costs:

a) Use his own money, then divide up the cost, and apportion each house its portion at the time of sale.
** that results in housing costs which aren't competitive with surrounding existing town's houses, and unfairly burdens the first home owner with the entire cost of the infrastructure.

b) the developer floats a bond, uses OTHER PEOPLE'S MONEY and you pay off the bond over 30 years.
** the bond itself is not part of the sale price of the house, just like the local paid off infrastructure costs of a city/town are not part of the sale of your prior house.
** the bond payment is attached to the house, just like the property taxes are attached to the land and buildings in the city/towm from where you came.
** the bond process allows the developer to minimize his own cash, allows for houses to be competitively priced against existing cities/towns, and allows the total cost of ownership to be comparable to a house in a town which is already developed.

c) the bond and bond payment should be disclosed as part of the sale of the house, as part of the total cost of ownership, just like property taxes are disclosed as part of the sale of an existing house. The lack of explicit disclosure of the bond and bond annual payment by the developer when selling a plot or house, is the shady or questionable behavior of the developer's sales team and processes. that is where many get surprised, because its different than buying a new house in a fully developed town

d) Should the bond be part of the sale price of your house in the future? NO, just like future city/town investments should not be part of your house price from where you came. . Many municipalities and HOAs borrow money for infrastructure costs, and the payment is increased property taxes or other assessments to the homeowner, many times or once a year, or with monthly HOA fees to pay off the cost of interest and principal of the bond or infrastructure investment.

The bond is no different here in TV than any other city/town/HOA, other than the option to pay off the bond early and its a brand new development with substantially larger infrastructure costs. In most cases, the annual payment as a fixed cost over 30 years, the payment will decrease in its proportion of the total cost of ownership, because the other costs of ownership go up annually with inflation, most of the time. If back home you bought into a small brand new development, most likely, the cost of infrastructure which the developer paid, was rolled into the new home cost. so its different down here. . just different.

So people should NOT be lumping the total cost of the bond into the house purchase price, nor into the house sale price. Just like one does not lump the cost of property taxes or future city/town infrastructure upgrades into the home price. Realtors and other real estate appraisal services should not lump the price in as well.

The cost of the bond is part of the total cost of ownership of the house, just like property taxes, insurance, utilities, and assessments were at the city/town from where you came. .

Should you pay it off? in general no, because its a cost of ownership assessment, not a cost of your house build. . however, if you want a lower cost of ownership, and you have the extra money, and you are going to live in the home for a good 10/15 years more, sure, but those are the only reasons, especially since the bond payment proportion of total annual costs will decline over time.

Will you get your money back if you pay it off? UNCERTAIN depends on how much you paid off, how much your house will be worth in the future, and other unforeseen variables affecting house pricing in the future.. .

[BrianL99]

Originally Posted by CoachKandSportsguy

this topic is just so misconstrued, and mis understood, people get all ties up in their financial undies. . .

The understatement of the year.

Florida's CDD legislation, was a methodology to make billons for large developers, at the expense of semi-frozen northerners, with minimal risk. It's one of the reasons Florida has had one of the most volatile real estate markets in the country.

It is essentially a methodology to fund real estate development, by transferring risk from the Developers to the Home Buyers.

The reason it's so prevalent in Florida and not anywhere else, should be obvious to most anyone.

The Villages now has the luxury of being "too big to fail", not so with many of the others. That said, it's likely the artificial support that keeps the TV Amenity Fee low, is temporary at best. The reckoning will come.

[OrangeBlossomBaby]

Originally Posted by golfing eagles

It's like a mini assumable mortgage. You only have to pay that last 20 years off

I understand that, I was asking if the balance would be re-whatevered into a new 30-year payment. I'll explain with an example since I really don't know the terminology or how it works:

I buy a new house. It comes with a $30,000 bond, payable at $1000 per year for 30 years (let's pretend the interest is included, I can't math today and it's irrelevant for my question anyway).

I sell the house in 10 years. The new buyer now has $20,000 left to pay on the bond.

Do they have to pay $1000/month, for the next 20 years
OR
Do they have $20,000 to pay, and now have a whole new set of 30 years to pay it?

[retiredguy123]

Originally Posted by OrangeBlossomBaby

I understand that, I was asking if the balance would be re-whatevered into a new 30-year payment. I'll explain with an example since I really don't know the terminology or how it works:

I buy a new house. It comes with a $30,000 bond, payable at $1000 per year for 30 years (let's pretend the interest is included, I can't math today and it's irrelevant for my question anyway).

I sell the house in 10 years. The new buyer now has $20,000 left to pay on the bond.

Do they have to pay $1000/month, for the next 20 years
OR
Do they have $20,000 to pay, and now have a whole new set of 30 years to pay it?

Nothing changes. The bond is not in anyone's name. It goes with the property and the amortization schedule does not change. The new owner just continues to make the payments as if the property ownership had not changed. So, the new owner only has 20 years left on the loan, the same as the previous property owner.

See Post No. 103. If you click on the link, you can view and print any amortization schedule for any property in The Villages. Note that there is no name associated these schedules. The payment schedule is connected to the property, not the property owner. These schedules never change unless the loan is refinanced, but this has nothing to do with the property owner.

[JOERILLA]

If you look at a house listed on TheVillages.com and click on "Flyer" on the listing page, the bond payoff is listed

[JOERILLA]

Originally Posted by OrangeBlossomBaby

I understand that, I was asking if the balance would be re-whatevered into a new 30-year payment. I'll explain with an example since I really don't know the terminology or how it works:

I buy a new house. It comes with a $30,000 bond, payable at $1000 per year for 30 years (let's pretend the interest is included, I can't math today and it's irrelevant for my question anyway).

I sell the house in 10 years. The new buyer now has $20,000 left to pay on the bond.

Do they have to pay $1000/month, for the next 20 years
OR
Do they have $20,000 to pay, and now have a whole new set of 30 years to pay it?

The new buyer takes over where you left off...so using your example they would pay $20,000 for 20 years (if they choose not to pay it off)

[OrangeBlossomBaby]

Thanks for the responses y'all! So glad I didn't have to deal with bonds when we moved in. I can't imagine being even a buyer of a pre-owned property with a large yearly bond payment remaining, on top of the actual sales price, this Florida method of property taxes, plus CDD fees plus Amenity fees...also glad we don't live in a numbered CDD. No maintenance fee over here.

[Jayhawk]

Originally Posted by JOERILLA

If you look at a house listed on TheVillages.com and click on "Flyer" on the listing page, the bond payoff is listed

Only on pre-owned.

[Jayhawk]

Originally Posted by BrianL99

The reckoning will come.

Better catch the first bus out of town.

[Jayhawk]

Originally Posted by OrangeBlossomBaby

Do they have to pay $1000/month, for the next 20 years

Now THAT would be one massive bond payment.

[DonnaNi4os]

Or a Walmart…