The information found here might help some to better understand bonds in TV - > Residential Bond Assessment Information

To go back to economics 101 you are assuming for the most part a very efficient market where all the buyers and sellers have complete information and act rationally.

Real life is never that simple and is often rather messy.

nope
 

disagree completely.

behavioral economics explains human behavior much more accurately, economic 101 is 1950 's theories, which no longer hold relevance.

you are showing your age

Judge Judy
 

The book is "Don't pee on my leg and tell me it's raining"

I have moved on from totally agreeing with Keynesian economics.:coolsmiley:

I will comment on bond payments.

If market price of your house appreciates you sell you are getting the appreciation when you sell and not necessarily the total value of the bond you paid off.

We are in our house now for one year and not sure if we will move to a larger one. As a result we have decided not to pay off the bond now and will wait to see what we wish to do when the world allows us to travel again.

exactly

never disagreed with that statement
 

I never disagreed with that statement. :a040: I disagreed with people who said that you never get your bond payment back, therefore you should never pay off the bond. I disagreed with people who said that they don't believe that they ever get their bond payment back if they pay it off.

If you read my posts, I suggest that with the recent rate (say 2017 onwards ) of house appreciation for new houses, you will get your bond payment back between 3-5 years of house appreciation, based on a bond of approximately 10% of the house value and an appreciation rate of 2.5% to 3%. So, if you want to save the cost of interest, which is significant over 20 years, and you plan to stay over 5 years, then you will get the cash you paid back, and save a ton on interest payments, thereby making your retirement income last longer.

So I don't disagree with your actions of not paying it off if you are thinking about moving within 3-5 years, I just disagree with the people who say that you never get your bond payment back if you pay it off early, or don't believe that they ever will.

Kind of like debunking an old realtor tale to never pay it off, which if everyone paid off their bond, would cause the cost of the villages public bonds to be more expensive as they would get a reputation for never lasting their stated duration.

sportsguy

I think we have an issue of semantics. The value of a paid off bond is less than the amount used to pay it off. So, if your house has a market value of "X" on Monday and you pay off a $10,000 bond on Tuesday, you would hope that your house will be worth "X plus $10,000" on Wednesday. Unfortunately, your house will actually be worth much less than "X plus $10,000" on Wednesday. So, if you are going to sell your house tomorrow, don't pay off the bond today.

Except, If it's raining............always pay it off.

Zero percent chance of rain today.

Totally agree. Human nature for the buyer to undervalue items they can't touch and see.

Ask a current buyer how much the "Blue Whale" model house costs. Most will tell you it cost X dollars plus upgrades. Very few will include the 30 to 40K cost of the bond even though they are aware of it.

The bond is The Villages equivalent of " plus shipping and handling".

Almost nobody will they consider part of the cost of living here.