Mello-Roos of Irvine
- Thread starter ps99472
- Start date
MRs suck for those who have them, but maybe suck just a tiny bit less since
1) Pay-off obligation is typically calculated based on current yield of the MR bond. If rates go up (one day who knows when), your pay-off amount on a long-term MR is going to down dramatically and paying it off will be a no-brainer
2) MR pay-off is already a much better option vs. paying off mortgage. MR yield is at least 1-2%+ higher than mortgage and you can immediately reduce/eliminate your annual payment on it
1) Pay-off obligation is typically calculated based on current yield of the MR bond. If rates go up (one day who knows when), your pay-off amount on a long-term MR is going to down dramatically and paying it off will be a no-brainer
2) MR pay-off is already a much better option vs. paying off mortgage. MR yield is at least 1-2%+ higher than mortgage and you can immediately reduce/eliminate your annual payment on it
J
jmoney74
Guest
ps9 said:
I'll have to dig through it.
J
jmoney74
Guest
i1 said:
Tax write off? I know that can be disputed.. but I tried looking more into it. Even Turbo tax says it's a gray area.
J
jmoney74
Guest
qwerty said:
What is that point? I don't see it anywhere and obviously I'm not at that point... I think.
qwerty
Well-known member
jmoney74 said:qwerty said:
What is that point? I don't see it anywhere and obviously I'm not at that point... I think.
I've never calculated it. I just use turbotax and when I enter the property taxes paid the amount owed for federal just stays the same :-(
You could play around with turbotax and see at what income levels it starts to get phased out and when it's fully phased out
irvinehomeowner
Well-known member
@qwerty:
1%ers don't get 99%er benefits.
But a true 1%er would be able to shelter their income so that they do get 99%er benefits.
1%ers don't get 99%er benefits.
But a true 1%er would be able to shelter their income so that they do get 99%er benefits.
J
jmoney74
Guest
irvinehomeowner said:@qwerty:
1%ers don't get 99%er benefits.
But a true 1%er would be able to shelter their income so that they do get 99%er benefits.
lol true.
qwerty
Well-known member
so in columbus square i have the R2 and R5, the R2 annual payment right now is at 4,400 and the R5 is at 2,200. i called the numbers on the tax bill on the way in to work this morning.
For the R2, there is a prepayment provision, the interest rate is currently set at 4.5% but increases to 6% by 2037, they didnt give me the specific increases per year in the interest rate. So based on my calculations i can pay anywhere from $55K to $65K to pay off the bond. Not sure what kind of value i add to the house by paying off the bond, in theory it would be the 55-65K but not sure i would get that all back if i sold. at 4.5%, i would have to generate a return of 7.5% to essentially break even. it costs $150 for an analyst to calculate a payoff amount and it takes 4-6 weeks to receive the payoff info. Also, once R2 is paid off in 2037 they can not extend it.
For the R5, the guy was not as helpful. he didnt now the interest rate, the main thing is that there is no individual homeowner payoff provision on this this, so cant pay it off even if you want to. he said the school district would have to add this provision, i asked what the chances of that happening are and he said they have not added an individual homeowner payoff provision to R3 and R4 so that it would be unlikely that R5 would get this provision.
For the R2, there is a prepayment provision, the interest rate is currently set at 4.5% but increases to 6% by 2037, they didnt give me the specific increases per year in the interest rate. So based on my calculations i can pay anywhere from $55K to $65K to pay off the bond. Not sure what kind of value i add to the house by paying off the bond, in theory it would be the 55-65K but not sure i would get that all back if i sold. at 4.5%, i would have to generate a return of 7.5% to essentially break even. it costs $150 for an analyst to calculate a payoff amount and it takes 4-6 weeks to receive the payoff info. Also, once R2 is paid off in 2037 they can not extend it.
For the R5, the guy was not as helpful. he didnt now the interest rate, the main thing is that there is no individual homeowner payoff provision on this this, so cant pay it off even if you want to. he said the school district would have to add this provision, i asked what the chances of that happening are and he said they have not added an individual homeowner payoff provision to R3 and R4 so that it would be unlikely that R5 would get this provision.
irvinehomeowner
Well-known member
DO NOT PAY OFF THE BOND.
Like the effect of rising or falling interest rates on home prices, you will not realize a directly proportionate return if you sell.
Like the effect of rising or falling interest rates on home prices, you will not realize a directly proportionate return if you sell.
J
jmoney74
Guest
??? said:
If a few thousand in 30 years is going to stress you out.. then you have more coming to you.
many sales reps get a lot of stuff wrong and know less than buyers. [unfortunately, my broker is in this category and it did cost me a good amount]. back to the point, you got some wrong info - 2/3 of GP MR is guaranteed to expire and not be renewed. The other 1/3 should be assumed indefinite, although possibility of a reduction exists.??? said: