[Indy-Guy]

Let me know what you think about paying off the bond?

My thought is not to pay the bond at least right away. I see homes that are advertised with bond paid and they are higher than those that the bond is not paid on. It sure makes since to get your bond money back if your selling. But if I paid my bond off and then I decided to sell my home and one just like mine (with a bond) in the same neighborhood is for sale at a lower price which one would you buy?

My thought is wait a while then decide if your here for a long time (a frog) and know that you don't want to sell then it might make sense to pay the bond off. But why pay the bond off and then try to get your money back when you sell. I know it will cost some interest but that may be worth it rather than trying to recoup your money.

Many people are on their 2nd and 3rd home in The Villages. I may want a larger home in a couple of years and that seems to be the trend for people who move within The Villages as they realize that they down sized to far.

Pick me apart because I want to know if my thinking makes sense.

[Villages Kahuna]

Someone told me once never to pay taxes until you have to. The bond is a sort of tax. It's simply each homeowner's share of the municipal bond that was issued to pay the developer for his expenditures for land development.

At our house up north we had the opportunity to hook up to city water rather than continue to use our perfectly good well, but the only way was to pay the hook-up fee (the bond) of $15,000 up front. My wife really wanted city water so let's put the discussion of whether the decision was a good one or not to bed.

The argument was that houses with city water would sell better and you'd get your front-end bond payment back when you sold the house because your house would demand a higher selling price. Baloney! As far as I'm concerned, we got zippo for having paid the bond up front (although we did have city water).

We did not pay the bond up front in TV and I doubt that we ever will. You don't really have to make that decision right away. You have the opportunity to pay the balance due on the bond each year at tax time with no penalty.

But I totally agree that if you sell your house with the bond paid you will not get your money back thru a higher selling price. And I conclude that from sad, personal experience.

[az2fla]

Villages Kahuna,

Once again, you have given very valuable advice to your neighbors and soon-to-be neighbors. I always look for your comments and postings because they are always "top-shelf". :bigthumbsup:

[darbyduff]

Hey Az2Fla -

Haven't seen you for awhile......Missed you!!!

Guess what..We sold the house ( closing next week ) and sold for more than we thought!! Passed Inspection and we're just waiting to hear from the Appraiser who was here yesterday. Think it should be OK.

That's for all your comments and concerns. Believe me, I have missed your posts!!

Darbyduff in Colorado

[az2fla]

Darbyduff,
I sent you a private email and then a few days later I posted a message to you to check your "private message" link at the top of the page. I'll send you another...make sure to check the private message. Just click on it.

CONGRATULATIONS ! :arrow:

[golfnut]

I have 2 more questions, 1) does anyone know what interest rate is being charged on the bond, and 2) how many years does it take to pay off the bond?

[Villages Kahuna]

You can certainly get all the bond information from the CDD where your house is located. But as I recall they're 10-year bonds. The muni rate these days is probably in the range of 4-1/2 to 5%, although it might be higher on CDD bonds because they wouldn't get as high a credit rating as a true municipality. That would effect the rate to a degree, but I would bet that these bonds are privately placed with local banks or investors. It wouldn't surprise me at all if Citizens First purchases many of the CDD bonds when issued.

Another question that either the CDD or your tax advisor might be able to answer is whether or not the bond payments or interest thereon can be deducted as "local taxes". I'm not certain of the answer, but my recollection is that they cannot be taken as a tax deduction.

[Frangyomory]

We paid the bond off because if you don't it is like having a mortgage and you will end up paying twice the original amount with interest. Also, if you ever want to sell your home in TV it is easier when the bond is paid. Best of luck!

[Shirleevee]

I am going to open this topic again.

What are your thoughts on paying off the bond?

Thanks,

Shirleevee

[SteveFromNY]

I'm asking myself the same question. We got our notice in the mail allowing us our once-a-year opportunity to pay it off. I thought mine said it was 30 years to pay it off, but as I am at work and the notice is home I will wait until later to check.
I figured it's costing me $85 per month until 2034 (if I read it correctly). I need around $12k to pay it off. Seems like a cheap way to keep $12k in my pocket even though the math says it is more expensive in the long run. I'll eventually pay 2.5 times the payoff amount. Assuming it's still my problem in 26 years.

[Shirleevee]

" Seems like a cheap way to keep $12k in my pocket even though the math says it is more expensive in the long run. I'll eventually pay 2.5 times the payoff amount. Assuming it's still my problem in 26 years"

This is my understanding too. Do I want to owe this into my (our) nineties?

[SteveFromNY]

Originally Posted by Shirleevee

" Seems like a cheap way to keep $12k in my pocket even though the math says it is more expensive in the long run. I'll eventually pay 2.5 times the payoff amount. Assuming it's still my problem in 26 years"

This is my understanding too. Do I want to owe this into my (our) nineties?

Well that's only a question you can answer. I seriously doubt I'll owe anyone anything in my nineties! If I did I'd be the first in a long line of SteveFromNY's who made it that far. ;D

Seriously, I will make a decision every June whether or not to pay it. For this year, I'd prefer to have the money so I am not. If things change next year, I'll make a different decision.

[DickY]

You can pay it off at any time. The notices give you an opportunity to pay by a specific date in July in order to eliminate any further yearly assessments on your tax bill.

[SteveZ]

I guess it's a matter of which way you prefer your math.

My goal is to be a debt-free as possible, so the bond goes away this year. Others more creative in their financial posture may find carrying a fixed-interest debt is okay, as long as they can earn more with the principal than the interest being charged is. So, it becomes a money-management matter, which depends also on how much time you want to invest in the money management.

There probably isn't a right or wrong here, so let's just have another margarita at happy hour....

[Shirleevee]

You just made Sailor's day.............not the bond issue, the Margarita!

He feels the same as you...let's be as debt free as possible....

Thank you all......

Shirleevee