steved0515
Junior Member
Hi, my wife and I live in Maine in a USDA subsidized home. My wife bought the house in 1990 as a single parent and was eligible for subsidy. It is a 33 year mortgage so it's life ends in May 2023.
Since that time, we were married in 2007, resulting in an end of the subsidy eligibility. The interest rate has been a whopping 9.25% since.
I am now in a financial position where I want to get rid of this elephant but continue to remain in the house. I am recently retired and my wife and I have no plans to move (at the moment).
My question is regarding the subsidy recapture. As I understand it, I have two options if I want to pay off the mortgage without selling the residence.
OPTION 1 - I can pay off the principle, which would end my monthly payments but would leave me with a lien in the amount of the subsidy recapture amount (which is north of $20,000)
OPTION2 - I can pay the principle plus 75% of the subsidy and would be paid off and lien-free.
The principle is approx. $57,000.
I'm looking for advice on which option I should choose and why ?
Thanks, Steve
Since that time, we were married in 2007, resulting in an end of the subsidy eligibility. The interest rate has been a whopping 9.25% since.
I am now in a financial position where I want to get rid of this elephant but continue to remain in the house. I am recently retired and my wife and I have no plans to move (at the moment).
My question is regarding the subsidy recapture. As I understand it, I have two options if I want to pay off the mortgage without selling the residence.
OPTION 1 - I can pay off the principle, which would end my monthly payments but would leave me with a lien in the amount of the subsidy recapture amount (which is north of $20,000)
OPTION2 - I can pay the principle plus 75% of the subsidy and would be paid off and lien-free.
The principle is approx. $57,000.
I'm looking for advice on which option I should choose and why ?
Thanks, Steve