Questions
 

Does the estimate of $192/mo. for DDA on TV "Estimated Monthly Cost of Living in The Villages" flier include the interest? I had assumed so since this represents paying it over time. This information makes you think it is based on the home value because it states it is based on a $250K home. But from reading your comments I see this isn't a correct assumption. Since many of you have pointed out the benefits of paying it off, I probably should consider both options before deciding. I had no idea that the interest rate is 6.5%. Is that correct? Thanks for your help.

We paid the bond off, it is 7% interest if you don't, and that's not tax deductible.

Many do not pay it off. There are quite a few who have moved several times within The Villages. When you factor the paid off bond price into the price of reselling your house it sounds much higher.

No one believes that they will decide to move once they buy, but it happens frequently. Some people decide they want or don't want a golf view or they want to be nearer to shopping or other things. Since moving household goods is less expensive here and houses are easier to sell, people change their minds and move..sometimes to a bigger home and sometimes to a smaller one.

True
 

We haven't moved in yet. Were already Looking! It's a CarGuy thing

Bond rates will differ. Ours is 5.375% - house built in '07.

Bill :)

Our bond is $20, 259.00 for a designer, Section 178 in Sanibel.

looking also

Here is a list of the bonds due for each area. It includes an amortization schedule. Intrest rates are hand written on each page. This one is only for Sumter County. Village Community Development Districts

So designer lots are $19,500 in #215 at 5.5% at about $115 month

the patio villas are $11,500

The infrastructure roads, utilities, etc were financed with bonds. The property owners are responsible for paying off the bond for their property over 30 yrs. The bond amts vary for each type of property and in each village or development district. Ex, in our Buttonwood Patio Villa the bond was about $11,000.....cottages about $16, Designers about $21,000. The fewer the properties the higher the bond. That is my understanding.

Thanks Elevatorman, that's a good chart to look at. For example, someone in district 5, with a total bond of about $11,000, will, over 30 years pay about $11,000 in principal, $14,000 in interest, and $1600 in administrative fees for a total of $27,000 (at 6.5% interest). That's almost 2 1/2 times the original amount of bond. At that interest rate, if you think you're going to be in your house for awhile, it appears it would make financial sense to pay off the bond. As Gracie mentioned, if you think you're going to move, it might not be worth it. Although, a caveat, some buyers look at houses with Bonds paid as a big plus, so it can be a selling factor for your house, but you may not recoup the total amount you spent on the bond.

Bond
 

Separating the bond cost from the house is a marketing tool to make the house look like it cost less than it does. The bond is a "lein" against your house until paid off. IMHO, If you are staying in your home for about 10 years, you might be better paying off the Bond if you can. If you pay $2k/ year for 10 years, you will have paid $20k and still owe about $14k. There is no tax advantage to paying over 30 years. But if you are selling or plan to die in less than 10 years, you or your estate may not recover the bond cost.:crap2:

With that thinking you should buy a house cash also.

The bond costs $30 a week, I would rather have 20K more cash in the bank than pay it off.

Jimbo, paying cash for things helps some people sleep better at night. Not every decision comes down to purely the financial aspect of things.

Just sayin'....... :wave:

Bill :)

Question: Our bond was issued in 2006 and was $19,336.00. We purchased our home new in 2009. The developer had already paid about $5000.00 in principal intrest and fees on the bond. Does anyone remember if at closing the developer recovered these payments as a seperate line item?

Interest rate
 

$20k in the Bank at 1-1.5% interest vs paying 6% on a non tax deductible loan? If I was going to pay the bond over time I would get a Home equity loan or get it into to the mortage somehow to make it tax deductible. :confused:

Cash is king, I didn't necessarily mean the bank at next to nothing rates, now to get a home equity loan is an ok idea, considering the tax benefits.

Cash always, Don't think it makes sense to spend a dollar to save twenty cents in tax

Agree
 

:agree:
I think a married couple gets $11,000 "standard deduction". If Taxes, Interest and Charity does not exceed $11k I do not think it pays to borrow money.

Thanks for that link, Elevatorman. I learned something new. We are in district 6 - I had thought all CYVs in same district had the exact same bond, but not so. Appears all the CYVs in one specific villa neighborhood are the same, as I thought, but looks like the bond in each CYV neighborhood is determined by the actual land mass for that neighborhood - each of the bonds in the 3 CYV neighborhoods in my Village (Sabal Chase) vary by a few hundred dollars.

Imagine this holds true for the various designer neighborhoods as well.

Total bond amount determined on actual cost of infrastructure.

So if you live in CCD 9 Unit 226 ( from previous link that was posted) you have a bond of $45,000. The first 10 years, you will pay over $2,000 per year in interest alone and less than $1,000 per year in principle. Total per year of over $3,000. So, you will pay over $97,000 over 30 years. $45,000 now ........or $97,000 spread over 30 years. This is the extreme, but all of the charts are about the same. You are paying about 2.5 times the bond amount if you don't pay it off. If you can afford to pay it off, it definitely makes sense to do so.

Um...none of us talk about it...but thirty years you know...we might have moved to The Village of Heavenly.


It is a personal thing. We were told by members of this forum five years ago that it was a real possibility that we might want to move from our first home here and we did. The neighbors behind us are on their third house. The asking price of the home seems lower to potential buyers if you do not pay the bond and have to factor it in the asking price.

Your math is correct. We have no mortgage, our choice was to not pay the bond and inevitably it is everyone's choice.

Thank you for the valuable information in this thread, I think you just saved my marriage, well, in that the bond was dh's only objection.
The Amortization Schedules are a wonderful tool that our sales person either did not know about, or declined to tell us, as this was the constant question in every home we viewed by my dh.
Hope to make TV home sooner than later.
Thanks again.

Very much like the impact and the math of a mortgage.

Bill :)

That's right 20K $113 month, it's a bit higher >1.5% or $18 a month more than std mortgage rate, really not a big issue IMO.

Yes, Bill, it's just like a mortgage. Luckily, I don't have a mortgage, either. Again, better to pay off any debt that you are paying interest on. Credit cards....same deal....no sense paying only the minimum due, which is mostly interest. I believe you should pay off as much debt as you can. I realize that not everyone can do this, but if you can, you save money in the end.Lots of money.

10 years
 

IMHO, If you are going to stay in your house for about 10 years then pay off the bond. If you do not know, many people move because they want a smaller or bigger home or better view, then wait 2-3 years before you pay it off. I plan on staying in this house until I die, which I hope is at least 25 years away.