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June 13, 2013 at 7:16 PM in reply to: Why it no longer makes sense for young people to pay off their mortgage early #762778June 13, 2013 at 1:00 PM in reply to: Why it no longer makes sense for young people to pay off their mortgage early #761822
earlyretirement
Participant[quote=CA renter][quote=matt]I am 36 (i consider that young :), currently working overseas with my former NCC primary home now rented. I still owe 400K on the property which likely appraises today at 950K or so. I bought in 2010 and have struggled to refi as it is very difficult to close a loan when you work for a non-US company overseas (despite having verifiable tax returns, pay stubs, etc)… so my current loan is 4.75% and payment 2600 / month, renting at 4K / month. I am thinking about paying this off to #1 assure my family a roof over our heads should we ever need it, #2 call me conservative but a guranteed 4.75% for me is a decent return. With the property paid off worst case i have an asset cash flowing me almost $3K / month and the security of a beautiful home in a great schol district to live in should we ever need it, with the sole pressure of generating enough income to pay for property taxes, bills, and food to provide a decent life for my family. This for me is compelling as I know life throws punches and i may not be able to generate the cash i can today in the future.[/quote]
Totally agree with this.[/quote]
Yep. As usual, I totally agree with CA Renter.
Look, the thing is that there is NOT a “one size fits all answer” to this question. It’s going to depend on each individual. And it depends on many factors like how well diversified you already are, what other assets and savings you have, etc.
You will always get people that tell you how it’s wise to take on debt and how they can make better returns in the stock market, or something else. I’ve mentioned this countless times but people mostly talk about their “winners” and rarely talk about their “losers”. We ALL have loser investments. Most people rarely talk about them but we all have them.
Is paying your mortgage off completely when you are younger conservative in nature. Sure. But there isn’t anything wrong with that. I’m one of those “not too old types” (I won’t say younger as I don’t consider myself too young anymore…ha ha) that paid off my mortgage while I was relatively younger.
For me, it made sense and I’m totally content with my decision to have paid it off. I actually have always waited until I had the cash to buy properties. Is it conservative? Sure but I’ve done very well even being this conservative.
I know MANY people like flyer mentioned, that made millions but were too aggressive and lost it all (and more as some took on leverage). The fact remains that MANY people out there have a NEGATIVE net worth.
Matt, I TOTALLY agree with your strategy for all the reasons you mentioned. There are VERY FEW investments out there where you can be guaranteed 4.75% TOTALLY risk free.
I know I won’t sell my property. Even when the kids move out and go to high school I’ll simply rent out the house probably with short-term vacation rentals and I’m confident I’ll do well. Or even if I did a longer term lease I’m confident I’ll be able to rent it out.
All my properties I hold mortgage free and I could care less what prices are doing in the interim while I own them. I don’t listen to the “noise” or stress about interest rates, values, sales, inventory, etc. The only thing I care about is cash flow on the rentals. That’s the only thing important to me and I don’t plan on selling them.
I also totally agree (as usual) with flyer’s point as well about trying to totally be on the path by the time you are 50 in trying to be more financially secure. I realize it’s not feasible for many people but it should be a personal goal of more people out there.
Many people make a ton of money but they spend all that money (and more) on a lavish lifestyle, expensive cars, etc. In my experience, I’ve seen that most people that make a lot of money think they will make a lot of money forever for all eternity…but the older you get, typically the harder it is to make money.
And the true danger is I’ve seen a LOT of people that as they get older and make less, still want to live that lifestyle when they made a lot of money. So they do whatever they have to do to continue to live it. Including using their credit cards, taking personal loans, cashing out retirement savings, or taking equity loans out of their homes. It’s a slippery slope.
Like flyer, my goal was to be totally financially secure by the time I hit 50 and part of that plan was not having a mortgage for the reasons flyer and UCGal mentioned.
Participant[quote=UCGal]On the topic of mello roos:
http://www.kpbs.org/news/2013/jun/12/homeowners-overcharged-thousands-special-property-/
Looks like some folks in Del Sur were overcharged by thousands/year. It pays to pay attention.[/quote]
No offense to these clueless owners but if they don’t know what their Mello Roos is supposed to be and it’s double and they paid it, they should feel embarrassed and silly. This goes along with what some of us are saying is most people have absolutely NO clue at all. They will just pay whatever the government says to pay.
I’m not saying the government isn’t idiotic either but “mistakes” like this will probably always be made. Ultimately John Doe taxpayer needs to know what their taxes are and make sure they aren’t overpaying.
It should NOT take an investigative reporter to tell YOU that you are paying double the taxes that you should be.
Participant[quote=CA renter]ER,
Good to hear that more people are catching on WRT Mello-Roos bonds. Personally, I detest this type of financing because it’s like everything else in this credit-crazed market: “How much per month?” Whenever I hear about “payments” when I ask about price, it makes me want to scream.
It’s a crazy market, isn’t it?[/quote]
Oh, I totally agree with you CAR that I hate these types of bonds. I wasn’t crazy about buying at first in a Mello Roos area but I can honestly say 100% that I totally don’t regret it at all.
I’m so thrilled with our area, the schools are excellent and I love our community that we ended up in. In principle I understand why they have Mello Roos bonds if they stick with the original amounts, they don’t squander the money and everything is above board and transparent.
Unfortunately with governmental entities here, that isn’t always the case as we all know.
Your point CAR about “how many payments” is so spot on target! That drives me nuts as well.
Absolutely it’s a crazy market. Certainly not “normal” at all. And I get a bit of a kick out of people that think this is a “normal” market. Normal real estate market, normal stock market, etc.
Participant[quote=CA renter][quote=earlyretirement]
That was the big part of getting my Mello Roos taxes pre-paid off. As well, I wouldn’t be surprised if there are too many people starting to pay them off if they ban the pre-payment in the future. The thing with these types of things is you just never know.
A few years from now I wouldn’t be surprised if they quietly stop accepting pre-payments on Mello Roos taxes. And the pay off dates conveniently get extended out further into the future. In such a scenario, the people that have paid them off already will be laughing all the way to the bank.[/quote]
Totally agree with this. Very smart of you to pay off the Mello-Roos on your property; the fact that you plan to hold it for the long-term makes it a no-brainer.
What’s odd to me is that more people don’t grasp how valuable pre-paid Mello-Roos are when they look at houses. I would definitely pay more for a house where these bonds are permanently paid off, but have seen some people totally not grasp the value of this.
Also concur about people who want all kinds of high-quality public goods and services, but complain about having to pay for it. There is no public infrastructure fairly, no matter how badly people would like to believe in one. All too often, though, when the private sector and public money intersect, there is often a lot of fraud and abuse, and it seems especially bad where real estate and development are concerned.[/quote]
Hi CAR. I do think people are starting to realize how valuable a pre-paid off Mello Roos is. We have received SEVERAL unsolicited offers to purchase our home from private individuals. They were via letters in the mail from actual individuals. And they did research that we paid off our Mello Roos and were willing to more than compensate us for paying it off.
I just think that the actual % of people paying it off is so very low that most people never come across a home with a pre-paid off Mello Roos. I don’t think many people even know that is a possibility. I was having dinner the other night with a certified financial planner here in San Diego and he lives here in a Mello Roos area. I mentioned that I paid mine off and he thought I was kidding at first.
He had no clue that you could pay this off. I figure if a guy like that doesn’t know then the majority out there have NO clue you can pay it off ahead of time. And the PUSD likes that just fine that way.
I’d be curious how many times you SD real estate pros come across a paid off Mello Roos. How often do you come across properties like this?
I do believe that anyone paying off a Mello Roos that lives in a desirable area in this kind of market will EASILY get more than reimbursed for all pre payments they might have made. I don’t know how easily it would be in a bear market but I don’t foresee the real estate market getting ANYWHERE near the levels it got at the depths of the lows.
We are polite with the people that send the letters and I’ve taken the time to answer them back. I have a feeling some are pouncing on other properties as some properties in my neighborhood have went into escrow within a few HOURS of being listed. Others just a few short days.
I think this entire matter of people prepaying off their Mello Roos is so very small. I looked at a ton of houses in San Diego over the course of a few years and I would always look up on the Tax Assessor’s website and I never once came across anyone that had pre-paid off their Mello Roos.
And I TOTALLY agree with you that there is so much potential for fraud and abuse when the private sector meets public money. So very true.
[quote=ocrenter]
Problem ultimately is there is zero accountability. So what if a hospital went over budget by 1/2 billion? Pay is not reduced, no one got fired, you don’t even hear any investigations or news articles on this major mishandling of public funds. On the other hand, let’s say the administrators did complete the hospital on time and on budget, there’s zero reward for that type of accomplishment either. End result is projects run into problems, we’ll just throw more money at the problem because it really is just other people’s money.[/quote]
ABSOLUTELY agree! This happens all the time like this. There is NO incentive typically for people to do things the right way. Especially with OUR taxpayer dollars.
Unfortunately I don’t think too much will change in the future until taxpayers as a collective group DEMAND changes with the way things are done. The only good thing about this PUSD Capital Appreciation Bonds issue is taxpayers seem to be more aware of things.
Participant[quote=ocrenter][quote=earlyretirement]
The Board members of PUSD were DEFINITELY shady. No doubt I put the majority of the blame on them. NONE of them should ever hold public office again! The point I was making is what you touched upon, ocrenter. That the voters wanted the improvements, they refused to pay for it with higher taxes. But they listened when the PUSD said that they found a way to do it without raising taxes.
Palomar is a monster. I read today where they just laid off a bunch of employees. They still aren’t getting the traffic that they anticipated.
And people like you don’t count for that credit card APR I mentioned. LOL. I’m like you. I never keep a credit card balance and just pay it off each month so my APR is simple. 0% same like you.
But you get the gist of what I was saying…. it’s not pretty…[/quote]
I hear ya. There’s no such thing in life as a free lunch. Of course nobody bothered asking “how” when the free lunch was offered. 🙂
http://www.smartvoter.org/2004/11/02/ca/sd/prop/BB/
Found the old proposition BB back in 2004 approved by the voters. Looks like they went over-budget by 1/2 a billion… whoopsie, what a silly mistake!
Pretty sad really. The voters get screwed if they vote yes for added property tax. The voters also get screwed if they vote no for added property tax. There is simply no oversight and no accountability for elected officials.[/quote]
Exactly. But then again I think deep down inside people probably knew there was some “catch” but as long as they could ‘kick the can down the road’ to the future taxpayers then they would rather do that then face some tough issues.
It’s not just government leaders that do that. Ordinary everyday citizens (taxpayers) are very guilty of that mentality as well.
Thanks for taking the time to post that BB. It’s an eye opener and just highlights the problems with these projects using taxpayer dollars. They NEVER finish on time and they ALWAYS go way over budget. And ultimately all they have to say is “oops…we need more money” and the taxpayers are on the hook.
That was the big part of getting my Mello Roos taxes pre-paid off. As well, I wouldn’t be surprised if there are too many people starting to pay them off if they ban the pre-payment in the future. The thing with these types of things is you just never know.
A few years from now I wouldn’t be surprised if they quietly stop accepting pre-payments on Mello Roos taxes. And the pay off dates conveniently get extended out further into the future. In such a scenario, the people that have paid them off already will be laughing all the way to the bank.
Participant[quote=ocrenter]
If I recall, I don’t think PUSD residents actually voted for the capital appreciation bonds. I think how it went down was they voted against further tax increases, and the PUSD board had to go out and find creative financing to complete the projects after the vote. How the board members justified it was very passive aggressive: aka, voters wanted the improvements, they refused to pay for it with higher taxes, so we were left with no choice.
What I find outrageous is the cost of these public funded projects. $150 million for Del Norte High? Hey, but that looked like a total bargain for the $1 billion for Palomar Medical Center. and remember, even at $1 billion they still ran out of money to build the maternity ward.
btw, I’m guilty of your last example. I have no idea what the APR is for my credit cards. 🙂 but then again, we are the worse type of customers for the credit card companies as we never keep a balance for them to make money off us.[/quote]
The Board members of PUSD were DEFINITELY shady. No doubt I put the majority of the blame on them. NONE of them should ever hold public office again! The point I was making is what you touched upon, ocrenter. That the voters wanted the improvements, they refused to pay for it with higher taxes. But they listened when the PUSD said that they found a way to do it without raising taxes.
Palomar is a monster. I read today where they just laid off a bunch of employees. They still aren’t getting the traffic that they anticipated.
And people like you don’t count for that credit card APR I mentioned. LOL. I’m like you. I never keep a credit card balance and just pay it off each month so my APR is simple. 0% same like you.
But you get the gist of what I was saying…. it’s not pretty…
June 5, 2013 at 3:33 PM in reply to: Which public schools are better: Carmel Valley or La Jolla #762446Participant[quote=sjglaze3]Hi I just had to reply to this thread. My daughter attends Muirlands and is going to LJHS in the fall. She is a VEEP student and takes a school bus in the morning (yes BG the district is still running free school busing). There was no academic requirement, high or low, for being a VEEP student, just being in the right cluster area (we live in South Park). I have been very impressed with the academic rigor at Muirlands and its very strict no tolerance policy on bullying, drugs etc. Incidentally my daughter has a 3.8 GPA and her local bused in friends are likewise doing well academically. Just my 2 cents.[/quote]
Thanks so much sjglaze for taking the time to post that. It’s always nice to hear actual real-life current information from parents. So really appreciate it and congrats on the success of your daughter.
[quote=DaCounselor]To answer your question er, the SD Unified enrollment options catalogue lays everything out. You have to go to their website to download it. The short story is that 3 out of the 4 programs actually give priority to the lowest achievers. Once you have transferred, the district’s continuity policy keeps you at that school (if you want) so no need to re-apply. The only students given priority over the lowest achievers are siblings of continuity students, regardless of performance.
There are plenty of local 92037 kids to fill those schools. The 2010 census says there are about 12,000 school-age kids in 92037. That is actually an increase over the 2000 census figures so the school-age population is rising, not falling. The fact is that many opt for private schools and that leaves enough space open for lots of transfers.
From what I have seen regarding CV vs LJ the data is what it is. At the middle and high school level (haven’t had time to look at all elementaries but probably there too):
CV – higher test scores, almost entirely local students, minimal free lunches, higher percentage of educated parents (college/grad)
LJ – lower test scores, substantial non-local students, substantial free lunches, lower percentage of educated parents.
CV has overcrowding issues at a few schools that I think exceed such issues in LJ. CV has a significant and growing Asian enrollment. LJ has a significant Hispanic enrollment.
What people do with these facts, how they interpret them and so on, is up to them. These are just the facts m’am.[/quote]
Thanks DaCounselor! Yes, I figured this was all available online but I appreciate you taking the time to post it. It’s very helpful. As with this thread, I often hear conflicting information about these types of things. Even from parents that send their kids there. So it’s nice to hear both sides of this.
Super interesting comments.
Participant[quote=ocrenter][quote=earlyretirement]
I mean realistically, what would homeowners due if by 2045 (or whenever the last payment is due) all of a sudden they say it needs to get extended 5 more years… what recourse do homeowners have? If anyone knows that answer, please post. The legal paperwork for the CFD’s was so long and complex that I think even most lawyers would get confused by the technical jargon in it. It’s almost as if some lawyers sat around a room when drafting these CFD’s and said, “let’s make the wording so complex and difficult that no one will really be able to decipher the meaning…..”.
And I TOTALLY agree with you that it doesn’t make sense for everyone. Especially in a transitional town like San Diego where people seem to come and go all the time based on job losses, weak economy, etc. I’d only recommend it for people that know for sure they will stay in the area for the long-haul or at least for many many years.
In a hot housing market like now, I think you will ALWAYS be able to sell and get back all you prepaid and probably more. But in a recession or difficult housing market who is to say how difficult it might be to recover these pre payments. Especially from people that might not plan to stay in the house “forever”.
I already knew that this was our “forever” house. It’s plenty big even anticipating for having another child if we do.
But for people in a similar type situation, it seems like a no brainer to me to pay it off ahead of time and get rid of the obligation.[/quote]
Of course, very few people look at and plan for 2045, and how many of us will truly stay in the same home until 2045. This is what PUSD is banking on. They figure the great majority will just keep paying and not even realize the MR was suppose to stop.[/quote]
I totally agree with you ocrenter. I’ve found in life that the vast majority of the people out there are financially clueless. As well, they only think about today/tomorrow/next week. They don’t really project and think out into the long-term. Especially here in San Diego where many people kind of have the “live for today” attitude.
PUSD is fortunate that most of the property owners are almost “financially retarded”. (and no offense to the mentally disabled). These PUSD homeowners are also to blame for these ridiculous capital appreciation bonds. They can blame the Board but they also share in the blame for voting for such a horrible thing. Sometimes 1+1 really does = 2.
What the PUSD is simply banking on is homeowners continuing to be clueless as always and just keep paying these CFD’s. After all, most don’t even have ANY clue how long they are for, what the scheduled pay off date is, what the interest rate is on them or really ANY details at all. All they know is they see it on their property tax bill each year and they pay it each year.
Heck, I’d venture to guess that most PUSD homeowners don’t even have any clue what the APR is on their credit cards! LOL.
June 4, 2013 at 3:05 PM in reply to: Which public schools are better: Carmel Valley or La Jolla #762426Participant[quote=DaCounselor]That is very interesting bearishgurl because I thought just the opposite was true – ie; most of the transfer programs give priority to the lowest achievers not the “cream of the crop” as you say.
I recall looking at this a few years ago when LJ was still a contender as a place to raise the family. I will try to find that info. Do you have a link to a source that shows only the cream of the crop are offered these opportunities? Thanks.I am also fairly certain that there was a study performed in the last decade that attempted to track academic performance of the transfer set and that there was essentially no change in scores, but I don’t have the data, I’m sure it exists somewhere.
Keeping with the original intent of this thread, I still don’t see any basis to support the idea that the LJ public schools can match those in CV or the other top areas.[/quote]
This is a super interesting thread. More along the lines of what DaCounselor is asking, what criteria is used to determine who is accepted in these transfers? Is there some level of criteria that puts one ahead of the list vs. someone else?
If anyone out there knows I’d be curious how they prioritize these requests.
Participant[quote=deadzone]early, arguing with you guys is pointless because your brains are so cluttered with sensationalist fearmongouring stories you can’t think straight.
I never said their are no risks in Mexico. But you guys insist that it is significantly MORE dangerouse than before, and I argue that it is not. You guys have no evididence to prove that it is more dangerous.
Was Baja a “sketchy” place to visit 10 or 20 years ago? I would say yes. But you guys are arguing as if it was some utopian place a few years ago and now all of a suddent it is a war zone. The fact is it is neither. Baja was a crap hole 20 years ago and it still is.
But if you loved to visit Baja 10-20 years ago and all of a sudden you are too “scared” to go down there today, then you are an idiot.[/quote]
I don’t think it’s “arguing” per se. I think it’s ok to have different opinions on any given subject. The world would be a boring place if we all thought the same thing.
I think in this case it’s just a difference of opinion. You say it’s as safe as 10-20 years ago and many of us are saying we don’t believe it is. I don’t think anyone is “fear mongering”. And as I mentioned, I definitely am not saying that people shouldn’t visit Mexico or Baja.
But I will disagree with you that it’s as safe as it was 20 years ago. We can agree to disagree. That’s ok. As well, I don’t think people are saying it was some peaceful “utopia” 10-20 years ago with no problems. I think people are saying that the violence and petty crime has escalated there and they choose to avoid it now until they can get a clearer picture of things. I wouldn’t call these people idiots for choosing not to go over now.
Participant[quote=CA renter][quote=earlyretirement]See I’ve always said that I don’t think the risk of murder is the issue.
It’s just petty attempted shakedowns like this.
http://www.utsandiego.com/news/2013/jun/01/tp-jailing-in-mexico-highlights-risks-for-tourists/
There are many American tourists that get hassled for bribes by the cops. And most of them never get (nor want) media attention. They just never go back down again.
I’d be curious how many people get targeted by the police for shakedowns.[/quote]
Yikes! With so many potential risks, it’s a wonder there are any American tourists at all in these border areas.
We had a situation there over a decade ago when we were trying to get home from Mexico at night (long story, tried to get into a hotel, but it was full). We got stopped at a road block on a desolate road by a bunch of soldier-looking types with machine guns who searched everything we had for about an hour and a half, and then let us go. They didn’t ask for money, so might have legitimately been looking for drug smugglers. Still, it was enough to keep us from ever going down there again. It’s just not worth it.
There were multiple trips before when I was camping with family and friends down there, even in the 70s and 80s, and our tents were ransacked by Mexican “police” who stole watches, cash, and anything else that might have been considered valuable. Not fun. :([/quote]
I’m just glad they had a video showing she got on the bus with no luggage. I wonder what would happen if there was no video? I mean, after all, it would just be her word against theirs and she probably would be sitting inside a jail cell at least a few months.
I originally heard about this story a day or so after it happened. Fortunately her husband was able to get CNN on the story and that put a LOT of pressure on the Mexican police…..
I noticed this from the US State Department: “The U.S. State Department also warns that criminals are increasingly affixing drugs to the bottom of parked cars in Mexico, then removing them after the vehicle enters the U.S.”
What if something like this DID happen to you? I’m curious how anyone would defend against it? After all, it would be your word against the evidence. Sounds like it would be a horrible nightmare. Even if you got off, you probably still would be facing at least some time in jail but more importantly tens of thousands of dollars in legal bills and also possible problems with work, etc.
Has anyone ever known someone or heard of any Americans this happened to? I got curious after seeing that warning.
[quote=deadzone]Seriously??? Petty shakedowns have been associated with Tijuana for decades, nothing new here. From my experience, they are a lot less common in recent years.
Does anybody else have real world experience with this? Would be interesting to know what others are experiencing.[/quote]
Deadzone,
Sure petty shakedowns have always been going on in Mexico. When you say, “from your experience they are a lot less” do you mean personally or some official statistic?
As well, it almost sounds like short of Americans getting murdered, you don’t find any risks of going across the border. I realize your argument is it’s the same Mexico as before and the risks are the same. But sometimes your posts don’t come across that way. I’m just saying…
Participant[quote=ocrenter][quote=earlyretirement]
As well, besides the 2% annual increases, it looked like they can extend out these CFD payments beyond the scheduled termination date. I liked the fact once you paid it off it forever releases you of ALL CFD obligations.
[/quote]ER mentioned a very important point. With PUSD engaging in what can only be described as simply very creative financing, it is quite likely that they’ll try to extend CFD obligations when the sh#$%$ hits the fan in a few years.
Just don’t do what this guy in Stonebridge did:
[img_assist|nid=17315|title=substation view|desc=|link=node|align=left|width=300|height=225]
So the owner pays off part of the MR. But then needs to sell in less than a year. The lot is a deficient lot due to the view of the substation in the backyard.
I would have simply spent some money to plant in some mature trees that would block off the substation view.
MR pay off is for folks that are done with all of the necessary home improvements and they are in for the long haul. It is not for everybody.[/quote]
Absolutely OC Renter! That was one of the MAIN motivations for wanting to pay it off. I didn’t do it immediately after buying because I figured with the low interest rate environment maybe they would refinance at a lower rate. Which they did.
But interest rates are so low I figured they can’t get much lower and as well with all the shenanigans with the PUSD, I didn’t know if by the time these CFD’s come due they will just extend out the CFD further into the future. While I don’t think it’s likely, who the heck knows??!
I mean realistically, what would homeowners due if by 2045 (or whenever the last payment is due) all of a sudden they say it needs to get extended 5 more years… what recourse do homeowners have? If anyone knows that answer, please post. The legal paperwork for the CFD’s was so long and complex that I think even most lawyers would get confused by the technical jargon in it. It’s almost as if some lawyers sat around a room when drafting these CFD’s and said, “let’s make the wording so complex and difficult that no one will really be able to decipher the meaning…..”.
And I TOTALLY agree with you that it doesn’t make sense for everyone. Especially in a transitional town like San Diego where people seem to come and go all the time based on job losses, weak economy, etc. I’d only recommend it for people that know for sure they will stay in the area for the long-haul or at least for many many years.
In a hot housing market like now, I think you will ALWAYS be able to sell and get back all you prepaid and probably more. But in a recession or difficult housing market who is to say how difficult it might be to recover these pre payments. Especially from people that might not plan to stay in the house “forever”.
I already knew that this was our “forever” house. It’s plenty big even anticipating for having another child if we do.
But for people in a similar type situation, it seems like a no brainer to me to pay it off ahead of time and get rid of the obligation.
Participant[quote=xgliu128]Thanks Ocrenter.
Then 2005 home owner still has to pay 25 more years, same as 2012 home owner, till 2037?
if 2005 home owner wants to pay off mello roos in 2013, will the pay-off amount count his already paid 8 years mello roos?[/quote]
OCRenter makes some great points.
You need to see when the particular CFD in question is slated to be paid off. I’ve spoken to some people in that area that were just told that they had to pay Mello Roos for 30 years. But what they weren’t told is that it doesn’t start until the development is finished! Every CFD is different so research the CFD and check out the details.
Yes, the pay off quote will account for payments already made. Both entities that I dealt with were pretty straight forward about everything. Once you pay the fee to get the payoff the communications are pretty good.
On one of them that I prepaid (CFD #2 for Santaluz) it was kind of a pain because I had made the full payment to pay it off that I was quoted. But then after paying it off and them cashing the check they told me that there was some confusion as it was in between the cycles of the tax payments.
Something to do with the City of San Diego coordinating things with the County. Ultimately even after paying off the CFD #2 I had to send in a separate check for about $2,000 that they ended up sending me a refund check for a few weeks later. A bit confusing but ultimately it ended up working out. (I dealt with Chuck Wilcox with the City of San Diego who was really great with communications).
You may want to wait until the full cycle ends to prepay the Mello Roos taxes. For example, on my CFD #4 for PUSD I paid off the total they gave me but they told me it didn’t include this last cycle that just ended.
To make things easier it may just be worth it to prepay it off after the cycle completes and starts over.
On the CFD #2 it immediately showed $0 on my property tax bill online. But on my CFD #4 it is still showing what I was being charged but they say it will drop off on the next cycle to $0.
I don’t regret paying all CFD’s off completely. I know we will keep the house and won’t sell it. Even when the kids are out of the house we plan to keep the house and will probably rent it out. Under our circumstances, pre-paying off the CFD was a no brainer and a solid investment.
As well, besides the 2% annual increases, it looked like they can extend out these CFD payments beyond the scheduled termination date. I liked the fact once you paid it off it forever releases you of ALL CFD obligations.
Also, for the CFD #2, I got a formal stamped certificate from the City of San Diego canceling the obligation. The name at the top says, “Notice of Cancellation of Special Tax Lien”. Signed by the City Clerk.
For the CFD #4 , I didn’t get a similar certificate. They said they don’t issue them. But in emails with Kari Zipp from the PUSD Planning Department, she did confirm that my Mello Roos obligation forever ended with my payment. She also referred me occasionally for questions she didn’t know the answer to Justin at the Dolinka Group who was helpful.
Just make sure for the CFD #4 you verify ahead of time when you make the payment that it will cancel out the current tax year. When I asked them why it wasn’t showing $0.00 on my property tax bill online they told me, “It is the policy of the PUSD not to remove any Special Taxes that are currently on the Property Tax Roll (i.e. FY 2012/2013) and was calculated based on this assumption.
The Mello-Roos will no longer appear on the FY 2013/2014 (mailed in October 2013) and any subsequent property tax bill”.
ParticipantSee I’ve always said that I don’t think the risk of murder is the issue.
It’s just petty attempted shakedowns like this.
http://www.utsandiego.com/news/2013/jun/01/tp-jailing-in-mexico-highlights-risks-for-tourists/
There are many American tourists that get hassled for bribes by the cops. And most of them never get (nor want) media attention. They just never go back down again.
I’d be curious how many people get targeted by the police for shakedowns.
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