Nancy Ross | Kalamath
|Photo Tom Lawrence
The Del Mar undergrounding schedule provides about 30 days after a successful vote for residents to pay their assessments either in cash or by using the city bonds. Our suggestion is to add as much time as the bids will allow, hopefully 30 more days, for residents to estimate their costs of hooking up to the new system, and to shop for and obtain a personal loan if they wish. This could help ease the financial burden on residents who plan on living in their homes for a long time.
In normal economic times, city bonds would have a much better interest rate than a personal loan or mortgage because of its tax-exempt advantage. This year, with many municipalities and states being in deep financial trouble, the muni bond interest rates have risen and become higher than individual borrowings.
Besides a possible lower interest rate, there are several other reasons why homeowners may want to obtain their own financing:
They can combine their hook-up construction costs with the City assessment costs into one financing.
They will get a 10 to 15% discount on their assessment because they don’t have to pay for the bond issuance. They may be able to do better on their own closing costs.
They can get the terms and conditions that work best for them.
Interest rates are slowly returning to normal relationships. If the city bond rates were lower than personal loans by the time they are issued, then having a few extra days would still assist homeowners in their planning.
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