Apologies if any tone was received, it was not my intent to send any negative vibe (just surprised at what felt to me like a completely new topic).I'd like to ask that you adjust the tone in your reply, given this information - thanks!
So the city just gets to put everyone on the hook for a cash payment -OR- loan terms without disclosing the amount/rate/duration up front? That seems awful...I would say yes, I am saving for a potential loan that is 1 year away. I am asking if it makes sense to even take the loan versus just paying out of pocket (since I already divulged I am not staying 30yrs here)
...and no I've never heard of this kind of thing. Every town I've ever lived in (parents' rentals growing up, my rental, 1st owned home, and current owned home) already had municipal water in place.
Unless the rate on the loan (once you know it) is considerably below the rate on 3m T-Bills (which is highly unlikely, even for a municipality issued loan), it's almost always better to pay up front if you can. It's the same line of thinking that we advise when considering to pre-pay a mortgage or just keep making regular payments; if the rate on the loan is higher than prevailing "safe" investment returns (i.e., relatively risk-free MMFs), then pay off the loan as quickly as possible (pre-pay monthly or make a lump-sum payment to eliminate it all at once). Some here like to compare a taxable investment fully burdened by your marginal tax bracket at Fed & State levels to the "investment return" comparison against the "loan interest rate," which typically makes paying the loan off look even better.
Statistics: Posted by bonesly — Sat Mar 09, 2024 7:18 pm — Replies 9 — Views 489