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Contrary to a banks' wishes that you borrow more money (because it is "cheap"), it is sometimes better to just assess for specific capital projects when they arise. Thus keeping a coops debt as low as possible. Thoughts?
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Completely agree. Even if one agrees that it is "cheap" now, interest rates are variable, and co-op boards / managing agent's don't have crystal balls, so they inevitably make the mistake of taking a mortgage at the wrong time or locking in a bad rate (maybe not this mortgage, but down the line, it will happen).
I tend to think that co-ops with mortgages should have a credible plan to become debt-free eventually, instead of permanently indebted. Shareholders should be educated about the policy, and able to meet assessments for capital projects. Doesn't have to work this way in every building, but it's a viable approach.
If shareholders *want* to have their property mainly financed with debt, fine, they can go get their own mortgage, quite possibly at a better rate than the coop.
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