I live in southern california. I am looking to puchase a home but dont want to spend more than 300,000 with a 6% interest. Last year my husband and I made 60,000, but this year i expect to make more but i am not sure if that is enough. our credit is good. Can you answer the following questions?
1) What should I expect to be my monthly payment?
2) Is it better to be 100% financed or should i put down a down payment. How much of a down payment should that be?
3)Should i purchase a condo and then sell later to purchase a single family home? Do condos have association fees? are condos like apartments?
4) Where do property taxes fall in? Do we pay those up front? or month to month?
5) are there any other fees other than mortgage that have to be paid, such as insurance? what are those and how much do they cost?
6) are there any government funded plans/promos for people within our income range to help purchase a home?
any other info can help. Principal and Interest: $1,798.65 ($300,000 @ 6%, 30yr)
Property Taxes: 150 (probably more, not familiar with CA taxes)
Insurance: 100 (probably more, not familiar with area)
PMI: 30-150( Depending on Credit score and money down)
Current Monthly Income:
60,000/12 = 5,000/mo *.28( Less Income Tax)
5000-1400=
Monthly Income 3,600
Estimated Mortgage $2,100
Just an estimate, but it is much tighter than I would want to live.
1) Estimated $2100, as shown there are many factors the main being money down. That is also dependent on a 6% interest rate
2) An 80% loan will remove PMI, which in my opinion is best case scenario. Down Payment would be $60,000 dollars. From there your PMI will be based on ltv(loan to value ratio) in increments of %95 or 90. The lower your LTV the less PMI you will pay. The biggest draw back to having a 100% loan is that your PMI will be high. Also if your home loses value and you need to sell you will have no equity.
3) That is a tough question, as I cannot predict condo appreciation. I know in Florida that MAY be a bad move, I don't know if the same is true California. That is speculation and you should research property value trends in the are. Condos do have association fees and they vary depending on what the association is responsible for. Condos are like apartments, the big difference being ownership.
4) Your lender will add money to your monthly mortgage and hold them in escrow (I included this in your estimated monthly payment). They will then pay the tax bill at the end of the year. You may be responsible for getting them the tax bill.
5) Homeowners Insurance depends on the risk factors associated to the property; such as: closest fire department, natural disaster risk, cost to replace property and so on. My estimate was a hundred dollars monthly ( this will also be added to monthly mortgage payment), honestly I think it would be higher.
Also PMI will be added to your PMI as explained earlier.
Your home owner association fees you would most likely be your responsibly outside of your mortgage payment.
Property Taxes as I said $150 a month. Once again they could be much higher, it is dependant on your local milage rates.
6) You would probably qualify for an FHA loan, which the main benifit would be a lower down payment. Also, your Interest can be a deduction on your income tax.
Stay away from creative financing. Make sure you get a fixed rate with no longer than a 30 year note. DO NOT get an adjustable rate mortgage, these should be reserved for professional investors.
All in all be careful. Don't push your finances too far, b/c it becomes very easy to make mistakes. Read all the fine print and deal only with people you trust. It is a big decision and should be approached with caution and knowledge.
Once again Adjustable rate mortgages may look good on paper, but they are capable of turning into nightmares as interest rates rise.
Good Luck My site is perfect for all of your questions. I answer basically everything you asked.
To answer a few quickly, yes condos have HOA dues each month that pay for maintenance and other stuff like spa, pool, or whatever else.
Condos are similar to apartments, except your rent apartments, and own condos.
100% financing is fine, but you may end up with a steep 2nd mortgage, and two loans. And 6% is likely a bit low. I would guess something around 6.5% depending on your credit.
Also, don't pay PMI, you can do a combo and avoid it if you keep your 1st loan at 80%, and a 2nd at 10% or 20%.
There are government plans such as FHA loans.
Go here for all those answers:
http://www.thetruthaboutmortgage.com
I address each one of your concerns, and if there's anything I missed, private message me for more information. try this link
http://mortgages.interest.com/content/ca...
Some mortgage lenders will not allow you to finance without placing some money down. And you can also be subject to MPI (Mortgage Protection Insurance) if you put down less than 20%. I'm not sure about condos, but i know co-ops have monthly maintenance fees, which can be pretty steep. Taxes are usually paid yearly, or you can have them factored into your monthly mortgage payment. On top of your mortgage and taxes you will have homeowners insurance, which will depend on the house, location and broker.
Oh, and don't forget about closing costs.
As far as government programs, I dont know much about FHA, but here's a link if it helps
http://www.hud.gov/offices/hsg/fhahistor... call roger eagleton he can help you out with a loan he is a good guy and will call you back and help you get into the home of your dreams, he helped me he's in walnut creek california 1 661 319 0923 I would recommend consulting with a reputable Mortgage Broker. They get paid based on referring you to a lender so they will work to find you a deal that works for you (since if you don't take the deal, they don't get paid). Before you do anything, you should get a credit check and get pre-qualified for a mortgage. That will let you know what you can borrow and will shape what you look for.
The condo route can be a good one. It is like an apartment except you own the unit and gain equity on your investment, which leads to cool tax deduction at year-end. The downside to a condo can be the association fees, which can add anywhere from $100 to $500+ to you monthly fees.
Taxes are paid annually or bi-annually or, can be escrowed which means the cost is divided by 12 and added to your monthly mortgage.
Most importantly, find a real estate agent you like and trust. They should do the heavy lifting for you (researching properties) and they typically have a good reference for a mortgage broker.
Good luck with your search - remember - its not worth it to be house rich, but cash poor. Do not e-mail any of your personal information to anyone you do not know (see above). See your banker or check with a mortgage broker face to face. Start by calling a real estate agent - they can give you ball park figures for all of your questions. Look in the news paper for homes for sale - if it is in your price range call that broker.
Condo's do have additional fees. The trade off is you get front yard or public area maintenance - all condos have to be maintained so you don't have a neighbor who is parking his camper in the front yard etc. They will have strict rules for noise and use of shared area. Some go so far as to tell you what kind of drapes have to be hung in your windows.
With private home ownership you have more freedom, but may also have deed restrictions regarding parking RVs etc. Your mortgage company will want you to make monthly payments to an impound account - and they will pay the taxes and insurance for you. There will be closing costs and title insurance - looking at about $1500 in fees. You will need to put a down payment to get better interest rates. Well first of all, good luck on trying to find a 300K home in SoCal. But to be truthful, housing is one of the reasons I moved out of SoCal. For a 300K home you would be likely be paying about 1700-1900 per month for a traditional loan with zero down.
If you can put a down payment, do so...no matter how much. Paying down the principle, especially in the early years will payoff in the end with lower interest payments.
As for the condo vs single family, depends on what your needs are. If its just you and your hubby and no kids, a 1 br condo should suffice and upgrade when you have kids or just want more. And for 300K, you might only find Condos, unless you're in the middle of nowhere or a not-so-nice neighborhood. Condos most likely will have an HOA with fees. And many condos are apartment conversions (but not all are), so yes, most are like apartments.
Property taxes normally included escrow for your first payment (current calender year). After that year you pay when the bill from the county accessors office comes.
Fees other than your mortgage, of course Home Owners Insurance, Mortgage Insurance {(if you get a second loan equivelent to the down payment) - if you paid the full down payment, you would not have to worry about this one}, Taxes of course, Regular City Utilities such as sewer, trash, etc., and HOA's if applicable. All this depends on where you are in SoCal. Obviously, if you are in a ritzy neighborhood, expect higher cost of living. Plus, you cant forget normal cost of owning a home like home maintenence....unlike renting, you are the landlord and will have to pay for everything instead of calling maintenence.
There are a couple government things, but its mostly first time buyers 3% down instead of 20% that normally is asked.
Other info: Dont get into option arms if in 3/5/7 years you still cant afford it. Only when it works for you should you go for it. Make sure you get the full story of each type of loan before you get into it because in some cases you may lose everything.
Also, check out those Rent vs Own calculators.....even though it may be the proud owner of a home, you may be better off renting. I can help answer all your questions. My name is Adam Alvarez. Here is my toll free number feel free to call me and I'll discuss your issues in great detail.
You have picked a great time to buy!
Adam
www.4618100.com may have a lot of answers to your questions as well. Your mortgage payment for 300k at 6% would be 1798.65 not including taxes or insurance or pmi (private mortgage insurance, which is applied to the mortgage if you go over 80% of the loan amount which for a 300k house would be a loan amount of 240k). The taxes and insurance will depend on the area you live. As far as 100% financing that really all depends on you. the more you put down the better the rate will be, on the other hand if you were to put money down and other needs arose later would it hurt you to not have that money accessable. Feel free to log onto http://www.justgetaloan.net for a fast free loan pre-qualification with great programs,service and low rates. Also I can be contacted directly at 866 530 7300 ext 7305 or by email@jfreeman@justgetaloan.net |
