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Bond or Deposit on Apt?


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Ok before going off half-cocked with the subject line ... read:

I'm going to enter the home buying market near the end of 2006 and beginning of 2007. My present lease expires April 1 and I'm moving to a cheaper apt (less rent = more into savings) with a 1 year lease

One apartment I went to today offers two options for security deposit: $500 refundable, or $87.50 non-refundable purchase of a surety bond.

I figured on using the $500 to go towards closing when I moved into a house at the end of this lease in 2007. Would a lender or broker take that into account when figuring everything up? I figure I'd rather save the $87.50 considering that yes I would tie up $500 for a year at 0% whereas in a savings account I would earn about 1.7% which is like $9. Big whoopie.

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Grim,

Depends on whether or not you feel that the apartment complex will really refund your deposit when you move out next year!!!!

Been a long time ago, but the last apartment I lived in, they came up with lame reasons to keep the deposit (carpet stains, that were already there and noted on the initial walkthrough and an oven cleaning charge for an oven that was cleaner than when I moved in, bvut they said it was customary due to Board of Health requirements {like new paint}.

A bond is actually an insurance policy that you would be buying in lieu of the deposit. If I had to do it again, I would probably lean towards the bond, but that is my personal opinion.

P.S. Which way are you moving? Northside, southside, eastside, westside, or Haughville?

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If I get to vote, I would say to pay the bond. If you go with a conforming type loan, then the more $ in the bank the better and the longer it is in your account the better.

Our daughter gets taken every year on cleaning deposit, so I am going to have her look into this bond deal.

Charles

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