[dewilson58]

Originally Posted by PennyAnn

It is not just the interest rate, which appears fairly low. They tack on large admin fees but don't really broadcast those. .

Look at the Amortization Schedule...........the fee is well disclosed.

[DAVES]

Originally Posted by jerseyclone

Payoff bond , my interest rate was 7% plus a maintenance fee of $90/year. The villages is getting rich off this scam.

That is interesting. We bought 8 years ago the interest on the bond was 5%. If, you are were paying 7% it is no question, I would pay off the bond.

People who say you will not recover the value of paying off the bond when you sell, need to find when you sell a quality broker. This home comes with a pool which would cost you xxxxxx, landscaping that would cost you xxxxxxx, tiles that would cost you xxxxxxx,
THE BOND IS PAID OFF that would cost you xxxxxxxxx

[tuccillo]

The bond rates, the administration fees, and the amortization schedules are available on districtgov.org.

Originally Posted by PennyAnn

It is not just the interest rate, which appears fairly low. They tack on large admin fees but don't really broadcast those. You'll feel like you pay forever, but never see the balance go down by much. Pay off the bond. As soon as you can. And lock your mortgage in with today's crazy low rates....you will win-win.

[Bay Kid]

Listen to Dave Ramsey for great financial advice.

[Barryb46]

When you retire, you are usually on a fixed income, so it is all about cash flow. Whichever option will reduce you monthly/annual payments is the way to go.

[Dlbonivich]

I would pay down the one with highest interest rate.

[Bilyclub]

Originally Posted by dewilson58

FYI: The Villages is not getting your payments.

I have read that the developer was the main buyer of the bonds, especially in the past when they were tax free. Don't know how true that is today.

[Stu from NYC]

Originally Posted by Bay Kid

Listen to Dave Ramsey for great financial advice.

Very knowledgeable but a bit too conservative in my opinion.

[snbrafford]

Originally Posted by Road-Runner

After reading through hundred's of listings in the Villages over the last several years prior to buying, it seems like the bond is almost an afterthought compared to the listing price. Although "No Bond" is listed as a selling point I don't know that it registers with most buyers how much debt the average bond is on new homes until after they pick a home to buy.

With that in mind, would it be crazy to pay off the bond vs paying down the mortgage by an equivalent amount? We're still working and our house in Bradford will be a 2nd home for at least 2 more years. When we sell here we'll want to reduce our monthly costs to the minimum possible so planning on using all the proceeds from the sale to reduce our only remaining payment, the house.

Just curious if others have gone through the same decision process.

Thanks, Jim

We bought an older home (2009) but still has the bond issue. We elected to pay down the mortgage rather than pay off the bond. From what we were told and has since been verified by our neighbors - villagers often move multiple times within TV for multiple reasons - one of our neighbors is on their 3rd house (they up-sized). Some folks down size as when a spouse passes or want to reduce living expenses (smaller mortgage). The person we bought from moved to a golf course view.

Additionally - paying down the mortgage reduces the monthly mortgage payment forever.

For this reason (possible moving), we did not pay off the bond as if we move, there is a high likelihood that there would be a bond on the "new" house and we'd be in the same situation again. But if we pay down the mortgage, that additional equity would always be there for us to use if we sell or if we need to use for something else.

HOWEVER, our thought process also included the fact that we will have the bond paid off in about 10 years which will reduce our overall expenses then.

When looking at homes (for the above reason), we did not consider the bond paid as a great selling point - more of a tie-breaker. But we were not looking at the new homes with new longer/higher bonds either. We are not sure if you would re-coup the bond in the selling price either.

[DAVES]

Originally Posted by asianthree

Paying down mortgage is big money saver, on interest. However some companies will reduce the monthly payments for a fee. Citizens First does for
175. But there are some lenders that will not.
Bond if you r planning on selling in 5 or 6 years, don’t pay off the bond.

However your financial person can put in better perspective for you

The math is above the comprehension of many. Reduce the monthly payments for a fee?
No one can pull money out of thin air. The options are simple. The mortgage brokers, banks, deliberately make it difficult to comprehend. If, you refinance to get a lower interest rate, the closing fees are 4-8,000. You will be charged that even if you refinance with the bank that already holds your mortgage. They will charge you for stuff like a title search. Searching for a lien against the property. They hold the original mortgage. If, a lien was put against the property, they would be notified. Points it will cost you like 4,000
for one point. It reduces the quoted interest rate so makes the interest rate look better than it is. At the falsely reduced interest rate it takes you roughly 6 years to recover the cost of the point. May or may not be worth doing.

You can also lengthen the time to pay off the mortgage. You are again going to pay closing costs on this deal. For some, I can only pay xxxxxx a month. You need to decide.
Perhaps, I should go to work? Work part time? Perhaps, I need to move? INFLATION-
costs are always going up. If, they go down in the realworld it is because we have gone into a depression. We are told the fed want 2% inflation. At that that rate in 36 years it will take two dollars to buy what a dollar does today. They have recently raised that 2% goal.

[DAVES]

Originally Posted by willbush

Paying off the bond which interest/admin fee is high; after seeing it barely moved in amount left just like a mortgage we paid it off after the first year; huge savings on our tax bill where you pay it yearly

Re: the bond
It has a 30 year payout. People who have a mortgage do not, at least I did not, think.
We tend to think, so much per month. On a 30 year loan the pay off of the loan amount is minimal on a per month basis.

Huge saving on tax bill? I expect taxes to change yet again. But, under our present tax structure, far fewer people get more than the standard deduction. So interest on the bond or a mortgage saves you nothing in a tax deduction.

[david14221]

You can always use a home equity loan to pay off the bond. Your interest rate will most likely be lower, tax deductible, and you can pay that loan down if you choose to.

[Fourpar]

Originally Posted by terenceanne

Although it may not be financially sound - to have zero debt is comforting and a nice position to be in. Something financial people never take into account is peace of mind.
Get rid of all your debt including the bond. If you can afford it of course.

Ditto!
And it is definitely a good feeling to owe nothing.
Life is good indeed!

[MandoMan]

Originally Posted by Road-Runner

After reading through hundred's of listings in the Villages over the last several years prior to buying, it seems like the bond is almost an afterthought compared to the listing price. Although "No Bond" is listed as a selling point I don't know that it registers with most buyers how much debt the average bond is on new homes until after they pick a home to buy.

With that in mind, would it be crazy to pay off the bond vs paying down the mortgage by an equivalent amount? We're still working and our house in Bradford will be a 2nd home for at least 2 more years. When we sell here we'll want to reduce our monthly costs to the minimum possible so planning on using all the proceeds from the sale to reduce our only remaining payment, the house.

Just curious if others have gone through the same decision process.

Thanks, Jim

If I’m buying a house, if the bond is paid off, that’s a big plus! I’m much more likely to pay the asking price if the bond is paid off and there’s a new roof and HVAC system. Without those things, I may not even make an offer. On the other hand, I don’t care at all how big YOUR mortgage is. If you use the money to pay down your mortgage, that doesn’t help me at all. If you use it to pay off your bond, that DOES help me. That is, it helps me if you don’t raise your asking price by the amount of the bond. Thus, if you own the house, decreasing your mortgage won’t let you ask a penny more, but you will get to keep more when you sell. Paying off the bond may NOT let you ask more, so you have essentially lost that money, but it may be the thing that leads to a quick sale.

[retiredguy123]

Originally Posted by kidnerkim

Why would cash out value of your home decrease? Bond paid off is a selling point ! We are looking at homes & are NOT looking south of 44 due to the very large bonds. I have even heard of people making offers on homes & offering less than the asking because of the bond. The interest rate is higher than mortgage rates right now so I would pay off.

Assume that you own a house with a $20K bond that will sell for $300K today. You pay off the bond tomorrow. If you need to sell the house the next day and break even, you would need to sell the house for $320K. But, any real estate agent will tell you that you cannot get $320K for the house, because buyers would rather pay $300K for a similar house even if it has a $20K bond. Also, if the buyer needs a mortgage, they may not even be able to get one because it may not appraise for $320K.