[Altavia]

Originally Posted by dewilson58

With the admin fee, the effective interest rate is 6%-7%. Good incentive to pay off early.

Does that calculation consider an inflation estimate over the period of the bond?

[retiredguy123]

I hate having any debt at all. But, if you are going to sell your house within the next 5 years or so, I think you will come out ahead by not paying off the bond. In most cases, you will not be able to increase your selling price to cover the cost you incurred to pay off the bond.

[Craig Vernon]

I know that has been historically true for the Villages however if you raise taxes you lose value compared to other areas that do not. So your value may not cover your bond expense it depends on whether the developer and county exceed the market and they are adding 30,000 more homes. We will all see.

[Goldwingnut]

A few months ago I put out a video that explained the bonds, what they're for, and how they are determined. Some may not have seen it. Here it is again.

Bond Video

[retiredguy123]

Originally Posted by dewilson58

With the admin fee, the effective interest rate is 6%-7%. Good incentive to pay off early.

Thanks for getting me to look at my bond. The current balance on my 4 year old bond is about $15,000. The interest rate is 4.3 percent. When you include the admin fee, the effective rate is only 4.8 percent. That is less than I usually earn on my diversified investment portfolio, so I can't see any reason to pay it off early.

[manaboutown]

Originally Posted by retiredguy123

Thanks for getting me to look at my bond. The current balance on my 4 year old bond is about $15,000. The interest rate is 4.3 percent. When you include the admin fee, the effective rate is only 4.8 percent. That is less than I usually earn on my diversified investment portfolio, so I can't see any reason to pay it off early.

j

Since the interest and fees on the bond are not tax deductible one would need to earn - risk free - in excess of 4.8% AFTER TAXES in order to justify not paying off the bond. At least from an income viewpoint. Of course if one pays off the bond and turns around and sells the house one would be unable to price the house sufficiently higher than competing for sale homes with bonds to recover the paid off bond principal.

[retiredguy123]

Originally Posted by manaboutown

j

Since the interest and fees on the bond are not tax deductible one would need to earn - risk free - in excess of 4.8% AFTER TAXES in order to justify not paying off the bond. At least from an income viewpoint. Of course if one pays off the bond and turns around and sells the house one would be unable to price the house sufficiently higher than competing for sale homes with bonds to recover the paid off bond principal.

I would just point out that, for most retired people, tax deductible interest is a non-issue. With the new standard tax deductions, most people are not able to take advantage of itemized deductions. I cannot itemize any deductions, whether I pay the bond interest or not, even if it were deductible.

[tophcfa]

Originally Posted by Chatbrat

BS, try and buy a house here without paying for a bond in isn't going to happen

We did, bought a beautiful pre-owned home with a bond balance of zero.

[Kilmacowen]

Originally Posted by Velvet

The thing is they are fair and upfront about it. This is the bond on my home.

I don't have a bond but this bill looks like 30 years, 2007- 2037

[OhioBuckeye]

Originally Posted by Chatbrat

BS, try and buy a house here without paying for a bond in isn't going to happen

You’re exactly right Chatbrat! TV doesn’t care if you buy or live there because there’s a line of waiting people that don’t care what the bond or tax are!

[Chi-Town]

The preowned house I bought had the bond paid. It was mentioned on the blurb sheet, but the agent never mentioned it. Since not being acquainted with the bond process I didn't think much about it and did not consider it when making an offer. So I would guess that paying off your bond early won't be much of a consideration on the sell price to the buyer.

Sent from my SM-N960U using Tapatalk

[bilcon]

A mere pittance. You're right "only" was a bad choice of words.

[Velvet]

Originally Posted by Kilmacowen

I don't have a bond but this bill looks like 30 years, 2007- 2037

Yes I just bought this year, and the price I offered reflected the bond balance and that I will update the appliances.

I appreciate the thoughts about the bond being paid off.

What I wasn’t sure of was the SECO transformer at the back but I took my EMF measuring machine and the house is very low.