Do I payoff the Bond? “The Villages”
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- Опубликовано: 8 сен 2024
- After purchasing in the Villages do I payoff the bond? I review a bond and the amortization schedule. I also compare it to keeping the amount and investing it in a CD. Financial choices when you have a bond on your property.
#thevillages #retirementplanning
I don't understand. If the homeowners are paying for the roads and infrastructure why aren't they private?
It’s owned by the district similar to what most would consider the village. Kind of like a city or town. This method seems to have worked just look how long the Villages have been doing this.
That makes sense I guess, it is a fantastic development. It takes a lot of money to build something so nice and well kept.
The Villages sure have a good racket going, with those Bonds.
Usually in a normally developed neighborhood the developing cost is devided and added to the land value or cost as it's sold. The Villages charge each new owner, over and over again.
Sounds almost illegal, but I guess if buyers will pay, who am I to say..
One has a choice, no?
A person who is over 55 can either live in TV or in one of the hundreds of 55+ communities in FL that DON’T have a bond….New construction buyers in the south have higher bond balances because TV is still building infrastructure and amenities.
Thank you, Gary. I now have a better understanding of bonds.
When we bought in 2013 the bond interest rate was over 6%.
We paid off our bond after 1 year.
I did the same even at 3.2%
Great info! I’m so glad we found the right home for us that didn’t have a bond!
I didn’t put this in the video but I think home owners who pay it off have an advantage when putting their home on the market in the future. As many new owners don’t want to deal with it or understand why their is one.
Thanks Gary for pointing me to this video. I'm guessing that there is a great share of TV home owners who do Not pay off their Bond. Those coming down could very well have the funds to purchase their home mortgage free, but I bet are still working with a tight budget, trying to maintain some degree of financial security. Taking age and life expectancy into consideration (as a 60ish resident), its very possible that the home would have to be put up for resale sooner than anticipated. Paying off the Bond may result in quite a financial strain on an older individual; clearly if you retire earlier or purchase a home as a future investment, the result is entirely different. Thanks again for the gr8 videos!
I believe most don’t pay off the bond in case they move again.
Thank you for this video Gary!
We paid off our bond to keep our property tax $2,000 a year lower. Didn’t want to pay $25,173 interest. If you have a home that many would be interested in buying, add on the remaining balance that would have been left if you leave after 10 years. That is what we plan on doing.
I did the same. I paid it off in the first year as I didn’t want to pay interest and annual fees.
@@GaryAbbott Hi Gary, nice to hear from you. Jim Hoffman / Citrus Grove
The Villages so Cavalier, oh by the way we need an Extra $25,000 ! The extras are the issues at the Villages, including having to pay to use your golf cart to play golf.
Thank you
How often are new bonds issued for maintenance or development of new areas of The Villages? Are Villages homeowners continually paying their "fair share" for new bonds that are issued?
The bond I discussed is only on the initial property purchase one time in a newly released village.
@@GaryAbbott Is there a risk of having new bonds issued, or is it "one and done"?
One and done but you still have your tax bill each year along with a fire & maintenance fees. Jerry and Linda “the villages newcomers” on RUclips just went over a tax bill in their latest video.
@@GaryAbbott Thank you!
I was told you only have two options- pay the bond in full upfront, or pay the 30 year schedule. I was told you cannot pay the bond off early. Is that true?
Not true. You can pay it off at any time. I paid mine off 11 months after purchasing the home. Hope this is helpful. If you watch my video I show an example of the interest and administrative charges each year so you save the most paying it off early.
Can you make your yearly payment but make extra payments thru the year like a couple hundred dollars every other month
I think you would have to ask the Bond office. Since it is an annual fee, I know I was given specific dates (I believe 3 different times in the year of options to pay and the amount varied because once the amount for the year goes to the tax office you can't remove that portion from the bill if that makes any sense to you.). Good question.
Another great video! Thank you! This may be a non-issue because of the current SALT limitations on our Federal taxes, but if those limits were not in place, would the payments on the bond be considered part of the taxes paid from a Federal itemized tax perspective?
Excellent question as I never thought about if their were tax implications. I really don’t know if any part of the bond payment is tax deductible.
@@GaryAbbott I, having been an accountant for over 37 years, would say NO, none of the bond payments are tax deductible. The bond principle payoff itself is not deductible because only "Ad Valorem" taxes (i.e. - a tax that is based on the value of something, which is your house).
For example, let's say your home you just bought from The Villages was $500,000 with a $40,000 bond. The house next door to you sold for $750,000 but also has a bond of $40,000. From this example, you can clearly see the bond had nothing to do with the home's value, so it definitely wasn't "Ad Valorem". I would add the value of the bond as part of your home's tax basis (e.g. - you paid $500,000 for your house, which had a $40,000 bond attached to it. Your home's tax basis would be $540,000).
Well, how about the interest payments on the bond? Unfortunately, this interest is not deductible, because it is not interest on a mortgage loan on the home. Only mortgage loan interest is deductible if you are able to itemize.
Which way is better, if you are financially able, to pay office the bond or pay it annually?
As I put in the video it is a toss up. If you have the cash and can invest it at an interest rate of 2.7% or higher you will do better than paying it each year. So you would get enough interest to pay the bond interest portion and a little bit of the principle. The real issue can you do this for the next 30 years without ever using the cash or the interest rate falls below 2%. If you pay it right off you have saved the interest and admin fees right up front but the cash is gone.
Hey Gary- Do you know if there are any penalties for paying it off early? Do you still owe all of the interest?
No penalties and you save future interest charges.
@@GaryAbbott thank you
Is the bond the same as an HOA fee?
Thanks for asking. The short answer is No it is not the same as the HOA/amenity fee which is billed monthly. Watch my video “If you can afford to live in the Villages” as I go over all my monthly bills including the amenity fee.
@@GaryAbbott We were looking in No. FL Yulee not so crazy about JAX. I notice all the developments have this bond fee however, my daughter purchased in an older community which is a lot less.
Last year before buying in the Villages I looked at a development in Yulee that had RV garages. Nice homes but just not the same when you look at all the entertainment options the Villages has. Good to know that the bond concept is not unique.