[BrianL99]

Anyone who thinks a $400,00 home with no Bond is worth paying the same price as a $400,000 home with a $30,000 Bond, is smokin' really good stuff.

A Bond is simply a mortgage with another name. An outstanding liability and lien, with an obtuse name that people don't seem to understand. The only real world difference from a mortgage, is the loan is assumable and (& to my knowledge) can't be "called".

To those who argue it doesn't change the "appraised value" of a home ... no kidding! When a home is appraised, the value/price doesn't change, based on the amount of the outstanding mortgage. The house is the house. The mortgages or liens, are an irrelevant part of the process.

The decision to pay off a Bond, is no different than the decision to pay off a mortgage. The exact same criteria apply, unless you need to borrow money to do it and loan to value ratio are an issue for your bank.

To those who suggest that "buyers don't care", you're simply wrong. It's not that anyone doesn't care, it's that a % of buyers are idiots and don't understand. Anyone with a modicum of common sense knows that $400,000 + $30,000 = $430,000 and that's more than $400,000.

[Normal]

Originally Posted by BrianL99

Anyone who thinks a $400,00 home with no Bond is worth the same as a $400,000 home with a $30,000 Bond, is smokin' really good stuff.

Most agree bonds correlate positively with newer structures which have newer roofs, newer ACs, newer everything. Renovation costs are greatly diminished..

There lies the trade-off. Eventually all needs replaced. The higher bond also means a longer shelf life for replacement of most things. It really is a wash.

The real bonus is being able to buy a new house with the bond already paid off. If the said house is older, there is no gain. Amortization equates with shelf life.

Even go the step further and discuss ...remodeling a “No Bond” home with a newer kitchen, carpet change, roof replacement, water heater swap and changing old style aluminum clad windows out. If those costs are factored in, a “No Bond” home actually costs much more than a newer bonded home..

[retiredguy123]

Originally Posted by BrianL99

Anyone who thinks a $400,00 home with no Bond is worth paying the same price as a $400,000 home with a $30,000 Bond, is smokin' really good stuff.

A Bond is simply a mortgage with another name. An outstanding liability and lien, with an obtuse name that people don't seem to understand. The only real world difference from a mortgage, is the loan is assumable and (& to my knowledge) can't be "called".

To those who argue it doesn't change the "appraised value" of a home ... no kidding! When a home is appraised, the value/price doesn't change, based on the amount of the outstanding mortgage. The house is the house. The mortgages or liens, are an irrelevant part of the process.

The decision to pay off a Bond, is no different than the decision to pay off a mortgage. The exact same criteria apply, unless you need to borrow money to do it and loan to value ratio are an issue for your bank.

To those who suggest that "buyers don't care", you're simply wrong. It's not that anyone doesn't care, it's that a % of buyers are idiots and don't understand. Anyone with a modicum of common sense knows that $400,000 + $30,000 = $430,000 and that's more than $400,000.

Those idiot buyers are a good reason to not pay off the bond.

[BrianL99]

Originally Posted by Normal

Most agree bonds correlate with newer structures with newer roofs, newer ACs, newer everything. Renovation costs are greatly diminished..

There lies the trade-off. Eventually all needs replaced. The higher bond also means a longer shelf life for replacement of most things. It really is a wash.

The real bonus is being able to buy a new house with the bond already paid off. If the said house is older, there is no gain. Amortization equates with shelf life.

Even go the step further and discuss remodeling a kitchen, changing carpet, replacing a roof and water heater and changing old style aluminum clad windows. If those costs are factored in, a “No Bond” home actually costs much more than a new bonded home..

Ahhh ... I see!

So you're buying a "Home Warranty" for $40,000? Great deal, go for it!

Not trying to be a jerk here, but you're not getting it. A "Bond" has nothing to do with the house or structure. It is attached to the land. It is a land cost. It was for the purchase of that portion of the infrastructure, attributable to that lot of land.

If you need any further proof of that, find out what happens to the Bond, if the house is destroyed. It doesn't change. The Bond is still attached to the land. If you or your insurance company pays to re-build the home, the Bond remains unchanged and unaffected.

[Bogie Shooter]

Not trying to be a jerk here,
🤷🏼

[Papa_lecki]

Vegas just set the over/under on this post to 225 threads.
I just bet my bond balance on the over.

[Altavia]

Originally Posted by Normal

Most agree bonds correlate positively with newer structures which have newer roofs, newer ACs, newer everything. Renovation costs are greatly diminished..

There lies the trade-off. Eventually all needs replaced. The higher bond also means a longer shelf life for replacement of most things. It really is a wash.

The real bonus is being able to buy a new house with the bond already paid off. If the said house is older, there is no gain. Amortization equates with shelf life.

Even go the step further and discuss ...remodeling a “No Bond” home with a newer kitchen, carpet change, roof replacement, water heater swap and changing old style aluminum clad windows out. If those costs are factored in, a “No Bond” home actually costs much more than a newer bonded home..

Also if not constructed to the current wind mitigation standards, add $1-2K per year in insurance cost - and probably even more in the future.

[nancyre]

2015 home in Lake County - Size 3/2 1600Sq ft 2023 figures
Maintenance $618.89
Bond $1569.22
Fire rescue $225.00
Total Non-Ad Valorem Assessments
Hope some real #s help

[CoachKandSportsguy]

Originally Posted by Papa_lecki

Vegas just set the over/under on this post to 225 threads.
I just bet my bond balance on the over.

I love these bond threads because its easy to read who understands the concepts and different viewpoints, the buyer the seller and the real estate agent, and who doesn't. . its behavioral finance / economics for sure. . .

[Normal]

Originally Posted by CoachKandSportsguy

I love these bond threads because its easy to read who understands the concepts and different viewpoints, the buyer the seller and the real estate agent, and who doesn't. . its behavioral finance / economics for sure. . .

Chief considerations would be sunk costs (loss of existing yet functional home substructures), opportunity costs (time required to desired restoration) and capital risk(new warrantied home or apprehension on dated structural problems). It is possible the bond is in a way a warranty against an already 20 year old roof, new appliances lasting longer than the 10 year old ones you purchased without the bond and most importantly, a happy wife.

[Bill14564]

Originally Posted by BrianL99

Ahhh ... I see!

So you're buying a "Home Warranty" for $40,000? Great deal, go for it!

Not trying to be a jerk here, but you're not getting it. A "Bond" has nothing to do with the house or structure. It is attached to the land. It is a land cost. It was for the purchase of that portion of the infrastructure, attributable to that lot of land.

If you need any further proof of that, find out what happens to the Bond, if the house is destroyed. It doesn't change. The Bond is still attached to the land. If you or your insurance company pays to re-build the home, the Bond remains unchanged and unaffected.

Actually, I think you missed the point.

No, he is not proposing to buy an extended warranty for $40K or anything like that. He is suggesting that the amount of bond remaining is an indication of the age of the home and the increasing probability of large maintenance bills. That is an interesting way to look at things and has some validity but isn't always the case.

Should I buy a new car at $60K or this ten year old car at $20K? Some would say that is a ridiculous question; why would I spend an extra $40K for a car?
"Well, the new car is less likely to have maintenance problems."
"So you're buying a warranty for $40K - go for it."

Of course, it isn't that simple with the bond. While a 30 year old home would no longer have a bond, not all homes without bonds are 30 years old. My home no longer has a bond payment yet it is not 30 years old. The 30 year old home is likely to require additional maintenance or updates. A home where the bond has been paid in advance would not. Using the size of the bond as an indication of upcoming maintenance is an interesting idea but seems too unreliable.

[BrianL99]

Originally Posted by Bill14564

...

He is suggesting that the amount of bond remaining is an indication of the age of the home and the increasing probability of large maintenance bills. That is an interesting way to look at things and has some validity but isn't always the case.

...

Of course, it isn't that simple with the bond. While a 30 year old home would no longer have a bond, not all homes without bonds are 30 years old. My home no longer has a bond payment yet it is not 30 years old. The 30 year old home is likely to require additional maintenance or updates. A home where the bond has been paid in advance would not. Using the size of the bond as an indication of upcoming maintenance is an interesting idea but seems too unreliable.

The remaining balance of a Bond has nothing to do with home maintenance or how old the building is. It's simply how much is left to pay off. There is no validity to any argument or statement, that suggests a Bond is related in any way, to the structure on the land.

The Bond is entirely unrelated to a building. It is a mortgage/lien/tax liability on the plot of land. Nothing more, nothing less.

When you buy a home The Villages, you are buying a structure, located on a plot of land, that may or not be free & clear.

If previous owners haven't haven't yet finished paying for the lot of land, the new buyer has to continue paying it off. They can elect to pay the Bond in a lump sum and own their property without that Lien attached to it or they can elect to continue paying off the Note/Lien + Interest + Fees.

It's a mortgage with a different name, folks. Nothing more, nothing less.

But don't take my word for it. Here, read about it from the experts:

Why CDDs? - FMSbonds.com

CDDs: Separating Fact From Fiction - FMSbonds.com

[BrianL99]

Originally Posted by Bill14564

...

He is suggesting that the amount of bond remaining is an indication of the age of the home and the increasing probability of large maintenance bills. That is an interesting way to look at things and has some validity but isn't always the case.

...

Of course, it isn't that simple with the bond. While a 30 year old home would no longer have a bond, not all homes without bonds are 30 years old. My home no longer has a bond payment yet it is not 30 years old. The 30 year old home is likely to require additional maintenance or updates. A home where the bond has been paid in advance would not. Using the size of the bond as an indication of upcoming maintenance is an interesting idea but seems too unreliable.

The remaining balance of a Bond has nothing to do with home maintenance or how old the building is. It's simply how much is left to pay off. There is no validity to any argument or statement, that suggests a Bond is related in any way, to the structure on the land.

The Bond is entirely unrelated to a building. It is a mortgage/lien/tax liability on the plot of land. Nothing more, nothing less.

When you buy a home The Villages, you are buying a structure, located on a plot of land, that may or not be free & clear.

If previous owners haven't haven't yet finished paying for the lot of land, the new buyer has to continue paying it off. They can elect to pay the Bond in a lump sum and own their property without that Lien attached to it or they can elect to continue paying off the Note/Lien + Interest + Fees.

It's a mortgage with a different name, folks. Nothing more, nothing less.

But don't take my word for it. Here, read about it from the experts:

Why CDDs? - FMSbonds.com

CDDs: Separating Fact From Fiction - FMSbonds.com

[Pessemist]

The question you are asking is better rephrased as,

“What’s the total balance left on the Bond on a particular home?”

At the start bonds can be hefty. $20-$40k

Over time that’s paid off just like your mortgage at whatever interest rate was assigned at the time.

No bond means it has been paid off and a zero balance remains.

It’s important to know the balance (if any) on the bond remaining in a home you are interested in. Otherwise you could be in for an unpleasant surprise of the total monthly mortgage/bond you have to fork.

Each home is unique in amount of their bond balance. Some owners accelerate bond payments or even pay it off early to make selling it easier.

So ssk

[Bill14564]

Originally Posted by BrianL99

The remaining balance of a Bond has nothing to do with home maintenance or how old the building is. It's simply how much is left to pay off. There is no validity to any argument or statement, that suggests a Bond is related in any way, to the structure on the land.

The Bond is entirely unrelated to a building. It is a mortgage/lien/tax liability on the plot of land. Nothing more, nothing less.

When you buy a home The Villages, you are buying a structure, located on a plot of land, that may or not be free & clear.

If previous owners haven't haven't yet finished paying for the lot of land, the new buyer has to continue paying it off. They can elect to pay the Bond in a lump sum and own their property without that Lien attached to it or they can elect to continue paying off the Note/Lien + Interest + Fees.

It's a mortgage with a different name, folks. Nothing more, nothing less.

But don't take my word for it. Here, read about it from the experts:

Let me type this more slowly this time: If the bond is not paid in full in advance then the remaining amount of the bond is directly related to the age of the home. One could say the numbers on a calendar have nothing to do with the age of a home, except that as the numbers get higher the home gets older. Likewise, the balance on the bond has nothing to do with the age of a home, except that as the balance gets lower the home gets older.

"It's a mortgage with a different name, folks. Nothing more, nothing less."
- Except the mortgage is directly related to the value of the home - the bond is not
- Except the mortgage on my home is likely different than the mortgage on my neighbor's - the bond is the same
- Except principal on the mortgage can be paid early - principal on the bond cannot
- Except the mortgage must be satisfied for the home to change hands - the bond does not
- Except I can refinance the mortgage to obtain a better rate - I have no ability to refinance the bond
- Except I can itemize interest paid on the mortgage - I cannot itemize interest paid on the bond

Perhaps you meant to say, "It's a mortgage with a different name... except when it isn't"

There are different ways to think about the bond and some are more correct than others.