Villages Bond Refinancing

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  #1  
Old 03-27-2020, 08:05 AM
alan.kleeman alan.kleeman is offline
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Default Villages Bond Refinancing

I’m currently paying 6% interest on my Bond payment.Refinancing rates for homes are currently averaging 3% for a 15 year loan according to BankRate. I called the District office and was told they only look at interest rate changes on Bonds on the 10th anniversary of the Bond. We are currently paying more in interest in the lifetime of the Bond than Principal. I can’t remember this being brought up in the past but if there is enough ground swell within the community maybe the Villages will change the policy and save us residents a great deal of money. I know if no other home lending businesses getting 6% interest at this time.
  #2  
Old 03-27-2020, 08:12 AM
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You have a personal option ... get a home equity loan and pay off the bond.
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Old 03-27-2020, 08:14 AM
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If you pay off your bond, you don't pay interest. You can refinance to get enough to pay the bond or you can get a home equity loan/credit line which interest is still a tax deduction .
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Old 03-27-2020, 08:18 AM
vintageogauge vintageogauge is offline
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Originally Posted by champion6 View Post
You have a personal option ... get a home equity loan and pay off the bond.
But keep in mind the equity loan will not follow the transfer of your deed if you sell your home. You will have to pay it off and you will not necessarily get your bond payoff back when selling your home as you will have to price it that much higher than the comps that have recently sold or are for sale, many buyers will not even take that into consideration.
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Old 03-27-2020, 08:59 AM
Decadeofdave Decadeofdave is offline
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Rates will soon be zero % or close to it.
  #6  
Old 03-27-2020, 10:59 AM
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Originally Posted by Decadeofdave View Post
Rates will soon be zero % or close to it.
They will be at or near zero on what we earn on our investments, not on the cost of borrowing.
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Old 03-27-2020, 12:14 PM
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Originally Posted by vintageogauge View Post
But keep in mind the equity loan will not follow the transfer of your deed if you sell your home. You will have to pay it off and you will not necessarily get your bond payoff back when selling your home as you will have to price it that much higher than the comps that have recently sold or are for sale, many buyers will not even take that into consideration.
I’ve heard this stated over and over. If one sells their home by owner, one will hear the purchasers comments and yes, we paid off the bond and totally recouped the the cost. It’s one of the first questions asked by the interested parties, is the bond paid off?
  #8  
Old 03-27-2020, 12:21 PM
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Quote:
Originally Posted by vintageogauge View Post
But keep in mind the equity loan will not follow the transfer of your deed if you sell your home. You will have to pay it off and you will not necessarily get your bond payoff back when selling your home as you will have to price it that much higher than the comps that have recently sold or are for sale, many buyers will not even take that into consideration.
However, the total consideration for your home , paid by the buyer, is the Sales price plus the remaining bond balance. Sounds like "six of one and a half dozen of the other"
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  #9  
Old 03-27-2020, 01:25 PM
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However, the total consideration for your home , paid by the buyer, is the Sales price plus the remaining bond balance. Sounds like "six of one and a half dozen of the other"
It is not always a consideration and when it is it's doubtful that the seller will recover the full payoff. Sometimes it's only good for the buyer but not so good for the seller, other times it will work out.
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Old 03-27-2020, 02:19 PM
PJ_Smiley PJ_Smiley is offline
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Default Bond Payoff

It is definitely a selling point that the bond is paid. We sold our home “by Owner.” It was a major plus to potential buyers that the $18,000 bond was paid off. I believe it made the house an easier sell. We considered it when pricing the house. We also considered the 6% realtor commission. The buyer got a break on the selling price (lower by a portion of the 6% commission we did not have to pay) and the buyer did not get saddled with $18,000 of additional debt at 5%-6% interest for the next 25 years.
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Old 03-27-2020, 02:30 PM
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Originally Posted by vintageogauge View Post
It is not always a consideration and when it is it's doubtful that the seller will recover the full payoff. Sometimes it's only good for the buyer but not so good for the seller, other times it will work out.
Show me the stats that support this concept .
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Old 03-27-2020, 04:20 PM
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even if you pay off bond you still incur a yearly maintenance fee. were these bonds financed through citizens bank? as i understand it
citizens is owned by morse family.

Last edited by kaseydog; 03-27-2020 at 04:21 PM. Reason: spelling error
  #13  
Old 03-27-2020, 04:24 PM
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Originally Posted by kaseydog View Post
even if you pay off bond you still incur a yearly maintenance fee. were these bonds financed through citizens bank? as i understand it
citizens is owned by morse family.
no matter how infrastructure was paid for, there is still a need to pay for maintenance no matter where in the world a development exists. Even if The Family didn't develop it.
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  #14  
Old 03-27-2020, 04:26 PM
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Quote:
Originally Posted by PJ_Smiley View Post
It is definitely a selling point that the bond is paid. We sold our home “by Owner.” It was a major plus to potential buyers that the $18,000 bond was paid off. I believe it made the house an easier sell. We considered it when pricing the house. We also considered the 6% realtor commission. The buyer got a break on the selling price (lower by a portion of the 6% commission we did not have to pay) and the buyer did not get saddled with $18,000 of additional debt at 5%-6% interest for the next 25 years.
Finally a rational statement on a subject so misunderstood in The Villages.
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  #15  
Old 03-28-2020, 05:08 AM
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Quote:
Originally Posted by kaseydog View Post
even if you pay off bond you still incur a yearly maintenance fee. were these bonds financed through citizens bank? as i understand it
citizens is owned by morse family.
These bonds have absolutely nothing to do with Citizen First Bank, these are commercial bonds sold to investors. They are also not a mortgage and can't be compared to one in terms of "refinancing". If I recall from the bond sales for the Amenity purchase in 2016, Chase bank was the financial institution to issue the bonds.

In these bonds, since they are investment vehicles, there are many limitations on reissuance of the bonds built into the bonds to protect both the buyers and the sellers. Remember these were 30 year fixed rate bonds the buyers purchased to make a given return on their investment.

In the past when the windows for reissuing (refinancing) the bonds opened, AND if the market was favorable, these bonds were reissued and the homeowners paying them saw the savings in their annual tax bill. Bonds for CDD3 though CDD8 were reissued in 2012, 2013, 2016 and 2016 to recognize such savings to the residents. A quick check of these bond rates indicates:
2010 bonds=4.817%
2012 bonds=2.784%
2013 bonds=4.25% to 4.94%
2015 bonds=4.25%
2016 bonds=3.35%.

None are at the OP's stated 6%, but then I didn't check every bond's rate only a sampling from each CDD.

Yes, on a 30 year at almost any interest rate above 2.4% will result in paying more interest than principal. If there is a service fee paid to the bond manager, as there always is, then the apparent amount paid on the bond at any given rate is still higher.

As many have already said, if you are unhappy with it you can either refinance it or pay the bond off.

One last thought, if it were not for the bond system allowed under Florida Law, the Villages would not be the community it is today. These bonds made and make it possible for the developer to invest their money in Rec Centers, golf courses, etc. instead of sewer pipes, electrical systems, roads, etc. This is to our benefit as well as theirs. You would pay for the infrastructure one way or the other, either it would be rolled into the cost of the house or as a separate line item as a bond.
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