So I made the call. Yep, called a mortgage banker because I thought I found the place I wanted to buy. She took my information and came up with these suggestions:
Make more money
Get the 2BR and find a roommate
Then yesterday on NPR I heard a story about land trust homes. You buy the house but the land in owned by a non-profit and is leased to you. This really appeals to me. The home costs less, therefore your taxes are less. The non-profit leases the land to you, but retains the ownership. There are guidelines to what you can do with the property, and your house appreciates less, but the bottom line is your mortgage is less.
Of course in my initial search, I could find no such homes here in my neck of the woods. But I’ll keep on trying.
My mom is constantly on me about buying a house. True, I should have bought when she first started in on me. It would have been tough but I would now be in a position to make that mortgage payment. Unlike now. How are people affording $3K - $5K mortgage payments?!
I met a woman who worked in real estate banking last year and she anticipated a change in the market. Said that people were stretched to the hilt and any change in income - a divorce, an illness, loss of a job - would make it extremely difficult to keep the property. That is starting to happen. Although people are still buying homes so I imagine the financially strapped are able to sell before it gets too bad. However, as the market slows, that may no longer be the case.
Let’s say you’re a married couple with a $4K mortgage and a 3BR house (welcome to California!) Each of you brings home $4500 a month after taxes. Nearly half of your combined income goes to the house. More than half if you count utilities and stuff. Couple gets divorced. How is $4500 going to cover the mortgage? Get a roommate. How much can you charge for a room? Maybe $800? $900 if you turn over the master bedroom, but not much higher than that because you can still find an apartment for that rate. You’re still responsible for $3100. And again, that’s just the mortgage, not utilities, repairs, maintenance and all that jazz.
In my case, if I put down $20K I can have a mortgage payment of $1370. Which I can do, but that’s nearly 70% of my income going toward mortgage! I’ll have just enough left for a car payment, insurance and the 12-pack of ramen noodles from Costco.
It’s all so depressing. So now I’m looking at other states and hoping to be inspired to move somewhere. How do you like your hometown?
Darling….I love my hometown but in my opinion it is rather expensive as far as buying a house goes…I think thats the way it is in most urban markets though…especially here since now they are currently trying to revamp the downtown area to make it more attractive to the young professionals to move back into the city instead of commuting. As a result, the prices they are asking for the condominiums downtown are simply ridiculous and the rest of the housing market isn’t much better…I personally know someone whose monthly house note is $3,200! Now that is simply silly insane!
Comment by greggy — August 23, 2006 @ 3:08 pm