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OK – I have a question for the forum;
From our annual Real Estate Tax notice (BBL 2171,012 Manhattan), it looks like we can save $2,596.16 on our property taxes if we pay in full on 7/1/2009 (or 1.5% of our Annual Property Tax of $173,078). This looks like a great opportunity for us as we can only purchase CD's at 3/6/9 months at .5%/.55%/1.0% annual rates from Vanguard. We would have earned approximately $500 in interest if we invested the amounts in these CDs (on three $43,270 quarterly payments) for a net gain of about $2,100.
Does anyone see any downside? We have ample reserves to cover and we would pay the monthly escrow payment to ourselves to replenish the reserves. NCB is our current mortgage holder.
Thanks!
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Steve, if you have the available cash, there is really no downside to paying early as long as you do not need to liquidate an investment paying a higher rate in order to do so. There is actually a sliding scale of savings - 1.5% if you pay in full by July 1, 1% if you pay the remaining due on October 1, and so on.
In our case we have not been able to take advantage of this discount because our quarterly taxes are over $600k and prepayment would require too large a cash outlay.
Go for it!
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