Paying Off Mello-Roos
This is what a reader found about paying off his Mello-Roos in advance:
My MR servicer gave me an estimate of $58,000 payoff on yearly MR of $5400. The total of $5400 is actually from two CFDs. One has interest rate of 5.5% and the other with interest rate of 7.5%.
Total cost of MR over the next 22 years would have been $160,000, including interest and the 2% increases every year. By paying off now, I’m looking at next 10-11 years of equivalent MR payments, but I think anyone planning on staying put for over 5 years should consider this as an option.
Besides the cost savings, what are other potential benefits?
Are you thinking of selling? With your CFDs paid off, you’d be able to offer the benefit of “No Mello-Roos” as an advantage over others for sale in your neighborhood. Rarely do you see newer houses for sale without Mello-Roos – set yourself apart from the rest of the competition.
How much benefit?
By showing buyers how much they are saving in Mello-Roos fees, not only would your home sell faster, buyers would probably pay more – perhaps an extra $10,000 to $20,000 – over others in the neighborhood.
Are you thinking of buying? Make sure to check how many years are left, and the annual increases.
To get the phone number to the Mello-Roos (CFD) servicer, check the tax bill.
Plug in the address at the link below, and scroll down: