Based on what I read in other posts, Mello Roos pay down is $~70k. My MR payment is $500 per month. If the MR Bond is for 30 more years from today, that comes to be ~8% annual interest rate. My alternative investment is not expected to yield 8% risk adjusted return for 30 years.
There is risk of MR increasing and extending the duration in future.
On the contrary, if I have to move (that’s possible if I get a better job) then I am not sure the buyer will be willing to pay $70k since he is getting a house without $500 MR payment required.
Thoughts and advices?[/quote]
kkun, if there is any chance of you selling in the next ten years to accept a better job elsewhere, don’t pay it off. You are correct in that a buyer will only pay what the recent sold comps will bear. As it stands, if your MR payoff remains at $70K, it will take 11 years, 8 months of ownership at the rate of $500 mo to pay $70K in MR (without interest).
