Del Sur Mello Roos Payoff

User Forum Topic
Submitted by Kristen_P on June 7, 2016 - 2:05pm

We just purchased a home in Del Sur and after doing a lot of research on this forum we thought that paying off the mello roos would be the right move for us. We made a pretty good profit off of the sale of our last home in 4S and decided that paying off the mello roos on our new home would be a good use of the money since we aren't planning on moving again for a long time.

After reading through the threads I was anticipating our payoff to be in the 50-70k range, I know the threads on this topic were a few years old but how different could they be? Turns out that the cost has sky rocketed, we were quoted 83,609 for CFD no14 and 83,573 for IA for CFD no 14. So 167k for a payoff which is outrageous. Our home was built in 07 and is 2000sqft, how is it this high?!?

I wrote the contact who prepared the quote, Larry Fershaw at the Dolinka Group and he was extremely vague and wouldn't give me any real info about when the bonds end etc. This whole things seems so shady and I don't see how the number can be this high. Does anyone here have any recent experience with this? Does this number seem correct to you? Thanks for any advice you may have!

Submitted by joec on June 7, 2016 - 6:23pm.

Some one else here has paid it off I think, and may comment, but they may have been in a different CFD area. I think they paid closer to 60k or so.

I think Del Sur has the highest CFD rates compared to any of the other 4S areas so it should be higher, but I don't know if your house is in both CFD districts?

One of those payment sounds more correct to me.

Submitted by Essbee on June 9, 2016 - 9:26pm.

I remember that it was earlyretirement (from Santa Luz) who paid off the Mello Roos. I haven't seen him on here for a very long time, though.

Submitted by matt on June 10, 2016 - 10:03am.

Anyone know the approx payoff for la costa oaks area?

Submitted by ocrenter on June 11, 2016 - 8:17am.

We paid off our MR in Stonebridge about 5 years ago. We were in two CFD districts, one was at $2500 and another close to $3000. The combined pay off was $59k.

Because of the built in annual 2% increase, ROI was about 10 years.

My friend in a different tract of Stonebridge with just slightly larger acreage and sqft but with a home about 3-4 years older reported payoff of $70k just a couple of months ago.

Just like mortgages, the principal doesn't change much over the first 10 years as you are just paying interest.

2000 sqft homes in Del Sur should have a MR burden of roughly $5000 +/- $500. Very shocked to see the payoff as reported here. That is about 2.5 times the payoff for similar yearly burden.

Why the difference?

Find out the individual interest rate for each CFD.
Find out what was the original bond maturity date, and find out if the maturity date was extended due to additional money raised. (Yes, they can decide to generate more funds by extending maturity date).

Submitted by ocrenter on June 11, 2016 - 8:23am.

joec wrote:
Some one else here has paid it off I think, and may comment, but they may have been in a different CFD area. I think they paid closer to 60k or so.

I think Del Sur has the highest CFD rates compared to any of the other 4S areas so it should be higher, but I don't know if your house is in both CFD districts?

One of those payment sounds more correct to me.

Just checked a few random Del Sur homes, they are in two CFD districts. The high CFD rates was a major turn off for us back in the days as well. But then again, that high school looks like it could put most of the community colleges in this country to shame. That cost had to come from somewhere...

Submitted by plm on June 11, 2016 - 9:40am.

ocrenter wrote:
We paid off our MR in Stonebridge about 5 years ago. We were in two CFD districts, one was at $2500 and another close to $3000. The combined pay off was $59k.

Because of the built in annual 2% increase, ROI was about 10 years.

My friend in a different tract of Stonebridge with just slightly larger acreage and sqft but with a home about 3-4 years older reported payoff of $70k just a couple of months ago.

Just like mortgages, the principal doesn't change much over the first 10 years as you are just paying interest.

2000 sqft homes in Del Sur should have a MR burden of roughly $5000 +/- $500. Very shocked to see the payoff as reported here. That is about 2.5 times the payoff for similar yearly burden.

Why the difference?

Find out the individual interest rate for each CFD.
Find out what was the original bond maturity date, and find out if the maturity date was extended due to additional money raised. (Yes, they can decide to generate more funds by extending maturity date).

ocrenter,

Thanks for the mello roos info. I'm in Stonebridge as well with mellos roos of about 6200 for the two CFDs. Seems to me from your data, the payoff amount is increasing (maybe because of the 2 percent increase per year?) so I should pay of the mello roos now instead of later. Love Stonebridge so planning on staying in the home forever so I suppose there isn't any reason not to pay of the mello roos now. Been using savings to pay down the mortgage but seems like it makes more sense to pay off the mello roos first. No regrets paying off the mello roos, right?

When I bought the house, I was told there was three different rates for Stonebridge based only on the square footage of the home.

Thanks

Submitted by ocrenter on June 11, 2016 - 10:04am.

plm wrote:

ocrenter,

Thanks for the mello roos info. I'm in Stonebridge as well with mellos roos of about 6200 for the two CFDs. Seems to me from your data, the payoff amount is increasing (maybe because of the 2 percent increase per year?) so I should pay of the mello roos now instead of later. Love Stonebridge so planning on staying in the home forever so I suppose there isn't any reason not to pay of the mello roos now. Been using savings to pay down the mortgage but seems like it makes more sense to pay off the mello roos first. No regrets paying off the mello roos, right?

When I bought the house, I was told there was three different rates for Stonebridge based only on the square footage of the home.

Thanks

Yes, no regrets at all. Here are the reasons why:

--the interest rate on the two CFDs were 5% and 7%, my mortgage is at 3.7%
--for me my mortgage is deductable, my property tax isn't (due to AMT)
--I knew we were going to be here for 10 years if not longer. Selling the property as a non-MR property is only going to give you a leg up.
--every April and November when we pull up our street on the SD county assessor site to pay the property tax we see a nice little reminder of why we did what we did.

I think my friend falls in the $6200 MR bracket.

Submitted by ltsddd on June 11, 2016 - 10:14am.

ocrenter wrote:
joec wrote:
Some one else here has paid it off I think, and may comment, but they may have been in a different CFD area. I think they paid closer to 60k or so.

I think Del Sur has the highest CFD rates compared to any of the other 4S areas so it should be higher, but I don't know if your house is in both CFD districts?

One of those payment sounds more correct to me.

Just checked a few random Del Sur homes, they are in two CFD districts. The high CFD rates was a major turn off for us back in the days as well. But then again, that high school looks like it could put most of the community colleges in this country to shame. That cost had to come from somewhere...

Del Sur does not have a high school built. The kids will either go to westview or Del Norte. The thing I don't understand about Del Sur is with such a high mello-roos, it built exactly 1 school - Del Sur Elementary. Their website lists Oak Valley & Del Norte in 4S Ranch as their middle & high schools.

As for that K-8, Design 39 school, you must also be paying the secondary CFD No. 15 in order to be able to send your kids there.

Submitted by ltsddd on June 11, 2016 - 10:18am.

ocrenter wrote:
plm wrote:

ocrenter,

Thanks for the mello roos info. I'm in Stonebridge as well with mellos roos of about 6200 for the two CFDs. Seems to me from your data, the payoff amount is increasing (maybe because of the 2 percent increase per year?) so I should pay of the mello roos now instead of later. Love Stonebridge so planning on staying in the home forever so I suppose there isn't any reason not to pay of the mello roos now. Been using savings to pay down the mortgage but seems like it makes more sense to pay off the mello roos first. No regrets paying off the mello roos, right?

When I bought the house, I was told there was three different rates for Stonebridge based only on the square footage of the home.

Thanks

Yes, no regrets at all. Here are the reasons why:

--the interest rate on the two CFDs were 5% and 7%, my mortgage is at 3.7%
--for me my mortgage is deductable, my property tax isn't (due to AMT)
--I knew we were going to be here for 10 years if not longer. Selling the property as a non-MR property is only going to give you a leg up.
--every April and November when we pull up our street on the SD county assessor site to pay the property tax we see a nice little reminder of why we did what we did.

I think my friend falls in the $6200 MR bracket.

OCR,
What's the process to paying off the mello-roos? I suppose you can't just walk into the assessor's office and give them a check.

Submitted by plm on June 11, 2016 - 11:08am.

http://piggington.com/paying_off_mello_roos

this thread had the info about paying to get the payoff amount calculated first. I wanted to pay it off a couple of years ago but I wanted the tax break that year and was afraid that paying off the whole thing would not count. Seems like it might have worked but now I'm in the AMT so no reason for me not to pay if off.

Submitted by ltsddd on June 11, 2016 - 4:36pm.

plm wrote:
http://piggington.com/paying_off_mello_roos

this thread had the info about paying to get the payoff amount calculated first. I wanted to pay it off a couple of years ago but I wanted the tax break that year and was afraid that paying off the whole thing would not count. Seems like it might have worked but now I'm in the AMT so no reason for me not to pay if off.

IIRC, ER mentioned about paying $500 for the assessor's office to do the calculation and provide the exact pay-off amount. $500 is excessive for some arithmetic.

Submitted by Coronita on June 11, 2016 - 4:53pm.

you guys are lucky... in Carmel V, asked if I can pay off my MR early, since I'm already hitting AMT. San Dieguito and Del Mar MR you cannot pay off early. However, I believe my MR is done soon anyway, and MR in CarmelV isn't as much as where you are.

As far as tax deductibility: if you are hitting AMT, property taxes deduction doesn't help that much since it's not counted as part of AMT deduction.

I believe you would be better off either cash out refinancing or if your HELOC has a ceiling, using that... I believe in those cases, you can write off your mortgage interest on the money you borrow, up to $100k i believe.

Submitted by ocrenter on June 11, 2016 - 5:02pm.

ltsdd wrote:
plm wrote:
http://piggington.com/paying_off_mello_roos

this thread had the info about paying to get the payoff amount calculated first. I wanted to pay it off a couple of years ago but I wanted the tax break that year and was afraid that paying off the whole thing would not count. Seems like it might have worked but now I'm in the AMT so no reason for me not to pay if off.

IIRC, ER mentioned about paying $500 for the assessor's office to do the calculation and provide the exact pay-off amount. $500 is excessive for some arithmetic.

It is a way to discourage pay off.

They don't advice early pay off and certainly does not make it known as a possible option for homeowners.

They have the option of extending the CFD bond to raise more funds, too many people opting for early payoff and it would limit the number of "eligible properties."

Submitted by ocrenter on June 11, 2016 - 5:06pm.

flu wrote:
you guys are lucky... in Carmel V, asked if I can pay off my MR early, since I'm already hitting AMT. San Dieguito and Del Mar MR you cannot pay off early. However, I believe my MR is done soon anyway, and MR in CarmelV isn't as much as where you are.

As far as tax deductibility: if you are hitting AMT, property taxes deduction doesn't help that much since it's not counted as part of AMT deduction.

I believe you would be better off either cash out refinancing or if your HELOC has a ceiling, using that... I believe in those cases, you can write off your mortgage interest on the money you borrow, up to $100k i believe.

Agree. Tax advisor said he does consider the HELOC for MR payoff as "home improvement." We actually took out a HELOC to pay the MR off.

Submitted by Kristen_P on June 11, 2016 - 6:52pm.

To get the payoff numbers we called PUSD and they referred us to the Dolinka Group and it was $100 but since we had 2 bonds it was $200. When I questioned the contact about specifics of the bonds such as payoff dates etc he wouldn't tell me anything in email form and said if I had questions to call him, probably in order to not have any paper trail of anything he said. The entire thing seems very shady and I still can't believe the numbers are correct.

Our MR each yr is about 5500 so I don't know what year these bonds end if we were quoted 167K for payoff. If going off the 167 number that means these bonds don't end for 30 more years?? Plus I thought there was an incentive to paying off early and this doesn't appear to be so or perhaps they just don't want people to pay it off? The whole thing is extremely frustrating and just seems like a huge rip off.

Submitted by Coronita on June 11, 2016 - 7:22pm.

Just curious. What school district is del Sur in?

Submitted by an on June 11, 2016 - 7:29pm.

flu wrote:
Just curious. What school district is del Sur in?

Poway.

Submitted by FlyerInHi on June 11, 2016 - 8:05pm.

Wasn't there a financial scandal at PUSD?

Submitted by Coronita on June 11, 2016 - 8:17pm.

FlyerInHi wrote:
Wasn't there a financial scandal at PUSD?

It's not a "scandal" exactly. But it was about I believe a "debt bomb" wrto debt the school borrowed at a extremely inflated interest rate.....Let me see if I can dig it up.

Submitted by Coronita on June 11, 2016 - 8:21pm.

Found it... We discussed it here awhile ago, back when more of the discussions were more useful. Not sure if it's relevant or not to this topic.

http://piggington.com/powaythe_real_debt...

http://www.voiceofsandiego.org/topics/ed...

It does seem strange that the MR payoff seems so jacked up right now. I'm not suggesting something fishy is going on, it just seems a little odd that the difference now and a few years ago would be that large.

Submitted by ltsddd on June 11, 2016 - 8:24pm.

flu wrote:
Found it... We discussed it here awhile ago, back when more of the discussions were more useful. Not sure if it's relevant or not to this topic.

http://piggington.com/powaythe_real_debt...

http://www.voiceofsandiego.org/topics/ed...

It does seem strange that the MR payoff seems so jacked up right now. I'm not suggesting something fishy is going on, it just seems a little odd that the difference now and a few years ago would be that large.

I wonder what really happened with this bond. The damage hasn't shown up on my tax bills, yet.

Submitted by Coronita on June 11, 2016 - 9:07pm.

ltsdd wrote:
flu wrote:
Found it... We discussed it here awhile ago, back when more of the discussions were more useful. Not sure if it's relevant or not to this topic.

http://piggington.com/powaythe_real_debt...

http://www.voiceofsandiego.org/topics/ed...

It does seem strange that the MR payoff seems so jacked up right now. I'm not suggesting something fishy is going on, it just seems a little odd that the difference now and a few years ago would be that large.

I wonder what really happened with this bond. The damage hasn't shown up on my tax bills, yet.

Well it's not due for awhile :)... I don't know.

Submitted by ocrenter on June 12, 2016 - 3:03pm.

ltsdd wrote:
ocrenter wrote:
joec wrote:
Some one else here has paid it off I think, and may comment, but they may have been in a different CFD area. I think they paid closer to 60k or so.

I think Del Sur has the highest CFD rates compared to any of the other 4S areas so it should be higher, but I don't know if your house is in both CFD districts?

One of those payment sounds more correct to me.

Just checked a few random Del Sur homes, they are in two CFD districts. The high CFD rates was a major turn off for us back in the days as well. But then again, that high school looks like it could put most of the community colleges in this country to shame. That cost had to come from somewhere...

Del Sur does not have a high school built. The kids will either go to westview or Del Norte. The thing I don't understand about Del Sur is with such a high mello-roos, it built exactly 1 school - Del Sur Elementary. Their website lists Oak Valley & Del Norte in 4S Ranch as their middle & high schools.

As for that K-8, Design 39 school, you must also be paying the secondary CFD No. 15 in order to be able to send your kids there.

Did not imply there's a separate high school for Del Sur. Comment was meant for Del Norte, which I'm sure some of the money from Del Sur CFD went to. PUSD pretty much spent the CFD dollars however they wanted throughout the district.

http://www.kpbs.org/news/taxes/

Submitted by Kristen_P on June 12, 2016 - 4:22pm.

That article is insane. Great to know our taxes will prob go up too, we have a two yr old and plan to stay in the area until he finishes school... Perhaps 167K will turn out to be a bargain in 15 yrs. Ick : (

Submitted by Coronita on June 12, 2016 - 5:35pm.

Well to be fair. Poway probably isn't the only district that has this problem. And when people didn't want a tax increase to fund public schools, the district did get creative and kept its promise of no tax increase for current owners. Reality is that this won't be a problem for another 20-30 years. So it's not likely going to be your problem....I wouldn't worry about it. Plenty of time for your kids to graduate and for you to cash in and move somewhere else just in case this does become a problem. Reality is , when the bill comes due, and it can't be paid, it will probably be negotiated down somehow. Again, not your problem...public financing is great. It makes no sense whatsoever and yet magically things always get.modified and taken care of by itself.

Submitted by Myriad on June 13, 2016 - 1:17pm.

There's a previous thread on this topic:
http://piggington.com/4s_melloroos_will_...

However, the links seem no longer to be available.
http://californiataxdata.us/ seems to charge for reports now. Might be worth the $29.

I'm in CFD#1, tried paying off, called Dolinka, but they said I couldn't pay it off. Fortunately it's supposed to be done in a few years.
Looked at Del Sur, couldn't get over the HOA and Mello Roos.

Submitted by maoing on September 14, 2016 - 10:19pm.

I paid off my 4S mello roos back to 2011, it's about 11 years payment at that time. So far it's been 5 years, so I think it's a good investment for the sake of long term as I'm sure I need continue to pay another 30 years if I didn't do so.

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