re: Mortgage Info question

quote:

---

Is it worth it paying the lump sum, or does the opportunity cost of using all of that money now for the lump sum outweigh my lower monthly payment?

---

I recall they allow you to divide it over 12 months without any type of interest. If there is no interest, the money can always earn a little somewhere else. If you're nervous you will spend it, then just open a quick online savings account and let it make a little money.

This is how my two houses have gone:
First year there is an overage because it is assessed at the previous price and they send you a check. Second year a shortage because they adjust escrow down because the tax is estimated to be around the previous year but the taxes would be on the new value. Third year, it is about right.

I just bought a house in August and received my overage check for about $600. I am making it work a little before they ask for about the same back next year to balance it out and plan to pay it over the full 12 months. Right now I am thinking of just a high yield savings account, but I am possibly going to put it somewhere a little more risky to see if I can squeeze some more money from it before they want it back.

I never pay back quickly when there is zero reason to do so.