A first home buyer need advice. - please help...

[thelinux]

Hi.
This is my first post here and I would like to get you guys expert advice regarding my first home purchase.

As I have never purchased a home before I don't know much about home buying.
I want to buy a home for my family (I + my wife + a 4 yr old boy + a new boy coming next month.) in Irvine very soon.

I am thinking to put down 300K and do not want to pay more than 2K per month toward home (mortgage+Tax+HOA etc..) because that's all I can afford at this moment.

That means I can afford a 400K-500K home...

So here are my questions.
1. Which is better between buying a new home or old home? What are the good & bad???
2. If I buy a new home, will there be any other expenses other than the price of the home? (I am asking this because I guess, you need to do some upgrade and decorate your garden etc..)
3. Should I buy a town home or should I buy a smaller single family home for little more money?
(For example, 1600sqft single home for 550K in northwood VS 1800sqft town home in northpark for 500K)
4. Which community would you recommend? I heard old communities has no mello roos? How importantly would you consider mello roos and HOA when you purchasing a home? Should I avoid paying high HOA and mello roos?
5. What else do I need to know? (Sorry I am so new to home buying so I don't even know what to ask!!!)
6. Finally, Is this a good time to buy? Will the home price go down further? Should I wait???

Well, I see some people always buy and sell homes like they eat snack.
But to me this is the most expensive purchase I've ever made (If I make) in my whole life!! So I am really nervous and don't know where to start.
I would appreciate if you can help me with these questions.

Thanks.

 

[usctrojancpa]

Hi.
This is my first post here and I would like to get you guys expert advice regarding my first home purchase.

As I have never purchased a home before I don't know much about home buying.
I want to buy a home for my family (I + my wife + a 4 yr old boy + a new boy coming next month.) in Irvine very soon.

I am thinking to put down 300K and do not want to pay more than 2K per month toward home (mortgage+Tax+HOA etc..) because that's all I can afford at this moment.

That means I can afford a 400K-500K home...

So here are my questions.
1. Which is better between buying a new home or old home? What are the good & bad???
2. If I buy a new home, will there be any other expenses other than the price of the home? (I am asking this because I guess, you need to do some upgrade and decorate your garden etc..)
3. Should I buy a town home or should I buy a smaller single family home for little more money?
(For example, 1600sqft single home for 550K in northwood VS 1800sqft town home in northpark for 500K)
4. Which community would you recommend? I heard old communities has no mello roos? How importantly would you consider mello roos and HOA when you purchasing a home? Should I avoid paying high HOA and mello roos?
5. What else do I need to know? (Sorry I am so new to home buying so I don't even know what to ask!!!)
6. Finally, Is this a good time to buy? Will the home price go down further? Should I wait???

Well, I see some people always buy and sell homes like they eat snack.
But to me this is the most expensive purchase I've ever made (If I make) in my whole life!! So I am really nervous and don't know where to start.
I would appreciate if you can help me with these questions.

Thanks.

Welcome to the forum.  You bring up a lot of questions that most first time home buyers have.  Many of the questions that you have will be answered by your own preferences (like buying new versus older).  Is the $2,000 per month amount you want to limit yourself to before or after tax?  I ask because your mortgage interest and property taxes will be tax deductible so I'm not sure if you've factored that into your equation.  Here are my thoughts for some of your questions...

1. Which is better between buying a new home or old home? What are the good & bad???  - This really comes down to a personal preference.  Some buyers like the older Irvine neighborhoods and that they have no Mello Roos and low HOAs while others like newer properties with newer floorplans and don't mind the extra cost.  What is your preference?  Have you looked at any of older and/or newer homes?

2. If I buy a new home, will there be any other expenses other than the price of the home? (I am asking this because I guess, you need to do some upgrade and decorate your garden etc..) - If you buy a new home there may be costs for upgrades that you can either get through the builder (it will increase the purchase price of the home) or that you can do yourself after closing.  Interior upgrades and landscaping are the main costs for that.

3. Should I buy a town home or should I buy a smaller single family home for little more money? - Again, comes down to personal perference.  That being said, detached homes (and detached condos too) tend to hold their value better than attached condos/townhomes. 

4. Which community would you recommend? I heard old communities has no mello roos? How importantly would you consider mello roos and HOA when you purchasing a home? Should I avoid paying high HOA and mello roos?  - That personal preference again, it all depends on which community you guys feel is the best fit and has the amenities that you guys are looking for.  You have to consider both HOA and Mello Roos when purchasing a home.  HOA almost never goes down and will tend to go up over time while Mello Roos is a fixed cost for 20-35+ years.  It all comes down to comparing different homes together by normalizing the cost of HOA and Mello Roos (I have a quick formula for that).

5. What else do I need to know? (Sorry I am so new to home buying so I don't even know what to ask!!!) - You should also consider what type of loan program works best for you.  Do you prefer to go with a 30-year fixed or maybe a 15-year fixed to pay the loan off early or does a 7-year ARM loan work better for your needs.  It is important to select a good loan person to work with as well as a good realtor to work with.  Remember that any home purchase will also have closing costs involved...those can range from 0.75% up (depends on the lender costs and prorations). 

6. Finally, Is this a good time to buy? Will the home price go down further? Should I wait???  - That is the most difficult question to answer.  It really comes down to you and your family.  Real Estate can go up or down and timing it is basically impossible.  If you plan on living in the home for the next 7-10+ years than it may be an OK time to buy, but again it comes down to you.  Can you sleep at night if prices fall by 5-10% over the next few years???

Let me know if you have any other questions.

 

[kinetics]

I am thinking to put down 300K and do not want to pay more than 2K per month toward home (mortgage+Tax+HOA etc..) because that's all I can afford at this moment.

That means I can afford a 400K-500K home...

I'm in a very similar financial situation.... interested to see the response to your questions as well.

 

[thelinux]

USCTrojanCPA/
Thanks! So much of my questions are matter of my personal preferences... 
ok...
About picking a community to live in... I was primarily asking that question in the perspective of an investor. Which community will gives the most value increase of a home???

And for the timing of buying an home, let's put a side my family. For purely investment purpose, is it a good time to buy? Or is there very high chance that the price will go down further????

Considering the fact that the market is very volatile, I guess I should buy detached rather than a condo???? Is this a good idea????

BTW, I am looking at a SFR buit in 80s. Is this conidered to be a too old home? Are these homes hold its value well? Or will it go down because these homes are too old?

 

[thelinux]

I am thinking to put down 300K and do not want to pay more than 2K per month toward home (mortgage+Tax+HOA etc..) because that's all I can afford at this moment.

That means I can afford a 400K-500K home...

I'm in a very similar financial situation.... interested to see the response to your questions as well.

My realtor said that there were some homes in that price range last year, but since early this year, single family homes in that price range is not coming up for sale at all. Were you able to find any????

 

[IndieDev]

6. Finally, Is this a good time to buy? Will the home price go down further? Should I wait???

Unemployment is still high, the U.S Dollar is being turned into worthless pulp by the FED, and the U.S is currently engaged in numerous foreign conflicts that are unpopular both abroad and domestically. In 6 months, when hyperinflation destroys what is left of the U.S economy, families will be reduced to roving bands of cannibals, reduced to eating their neighbors to survive.

Is it a good time to buy? Only if you can purchase tillable land on defensible terrain.

 

[thelinux]

6. Finally, Is this a good time to buy? Will the home price go down further? Should I wait???

Unemployment is still high, the U.S Dollar is being turned into worthless pulp by the FED, and the U.S is currently engaged in numerous foreign conflicts that are unpopular both abroad and domestically. In 6 months, when hyperinflation destroys what is left of the U.S economy, families will be reduced to roving bands of cannibals, reduced to eating their neighbors to survive.

Is it a good time to buy? Only if you can purchase tillable land on defensible terrain.

If you expect hyperinflation, then isn't it a good idea to buy a home instead of putting cash in the bank and watching it becoming toilet paper???

 

[IndieDev]

6. Finally, Is this a good time to buy? Will the home price go down further? Should I wait???

Unemployment is still high, the U.S Dollar is being turned into worthless pulp by the FED, and the U.S is currently engaged in numerous foreign conflicts that are unpopular both abroad and domestically. In 6 months, when hyperinflation destroys what is left of the U.S economy, families will be reduced to roving bands of cannibals, reduced to eating their neighbors to survive.

Is it a good time to buy? Only if you can purchase tillable land on defensible terrain.

If you expect hyperinflation, then isn't it a good idea to buy a home instead of putting cash in the bank and watching it becoming toilet paper???

Only if you expect to be able to adequately defend your home from neo nazi cannibals. How's your aim? Can you hit a moving target at 30 yards with relative ease and consistency? What happens if the ammo runs out? Can you kill or maim with your bare hands?

I think you put too much value into what amounts to a box made out of stucco, toothpicks, and cheap IKEA compressed cardboard furniture. 

Ammo, food, water, and the will to kill without question for your own survival; these are the only things that will have worth at that time.

 

[villiagepeople]

In 6 months, when hyperinflation destroys what is left of the U.S economy

do you expect wages to increase in 6 months... i thought you said inflation is impossible w/o sustained rising wages?

 

[edhne]

6. Finally, Is this a good time to buy? Will the home price go down further? Should I wait???

In 6 months, when hyperinflation destroys what is left of the U.S economy, families will be reduced to roving bands of cannibals, reduced to eating their neighbors to survive.

Is it a good time to buy? Only if you can purchase tillable land on defensible terrain.

USCTrojanCPA's last post sort of encompasses what I believe in a nutshell, except I'll go one step further. Unless we create actual jobs, aka real 9-5'ers with benefits, not temporary, seasonal, or part-time work, we won't see real wage growth, let alone inflation.

Genius.

The "people's champs" conviction lasted all of 6 days.

You should ALWAYS follow Indie's advice. It is rock solid for a week at a time.

 

[thelinux]

6. Finally, Is this a good time to buy? Will the home price go down further? Should I wait???

Unemployment is still high, the U.S Dollar is being turned into worthless pulp by the FED, and the U.S is currently engaged in numerous foreign conflicts that are unpopular both abroad and domestically. In 6 months, when hyperinflation destroys what is left of the U.S economy, families will be reduced to roving bands of cannibals, reduced to eating their neighbors to survive.

Is it a good time to buy? Only if you can purchase tillable land on defensible terrain.

If you expect hyperinflation, then isn't it a good idea to buy a home instead of putting cash in the bank and watching it becoming toilet paper???

Only if you expect to be able to adequately defend your home from neo nazi cannibals. How's your aim? Can you hit a moving target at 30 yards with relative ease and consistency? What happens if the ammo runs out? Can you kill or maim with your bare hands?

I think you put too much value into what amounts to a box made out of stucco, toothpicks, and cheap IKEA compressed cardboard furniture. 

Ammo, food, water, and the will to kill without question for your own survival; these are the only things that will have worth at that time.

I had 3 years of military experience. I was a fairly good shooter back then but since I am much older and have less sharp eye now, I am not sure if I can be as good as I was once.

 

[davenlei]

6. Finally, Is this a good time to buy? Will the home price go down further? Should I wait???

Unemployment is still high, the U.S Dollar is being turned into worthless pulp by the FED, and the U.S is currently engaged in numerous foreign conflicts that are unpopular both abroad and domestically. In 6 months, when hyperinflation destroys what is left of the U.S economy, families will be reduced to roving bands of cannibals, reduced to eating their neighbors to survive.

Is it a good time to buy? Only if you can purchase tillable land on defensible terrain.

If you expect hyperinflation, then isn't it a good idea to buy a home instead of putting cash in the bank and watching it becoming toilet paper???

Only if you expect to be able to adequately defend your home from neo nazi cannibals. How's your aim? Can you hit a moving target at 30 yards with relative ease and consistency? What happens if the ammo runs out? Can you kill or maim with your bare hands?

I think you put too much value into what amounts to a box made out of stucco, toothpicks, and cheap IKEA compressed cardboard furniture. 

Ammo, food, water, and the will to kill without question for your own survival; these are the only things that will have worth at that time.

That is why I have an armed house with over 1000 rounds of ammo in my safe. 

 

[IndieDev]

6. Finally, Is this a good time to buy? Will the home price go down further? Should I wait???

Unemployment is still high, the U.S Dollar is being turned into worthless pulp by the FED, and the U.S is currently engaged in numerous foreign conflicts that are unpopular both abroad and domestically. In 6 months, when hyperinflation destroys what is left of the U.S economy, families will be reduced to roving bands of cannibals, reduced to eating their neighbors to survive.

Is it a good time to buy? Only if you can purchase tillable land on defensible terrain.

If you expect hyperinflation, then isn't it a good idea to buy a home instead of putting cash in the bank and watching it becoming toilet paper???

Only if you expect to be able to adequately defend your home from neo nazi cannibals. How's your aim? Can you hit a moving target at 30 yards with relative ease and consistency? What happens if the ammo runs out? Can you kill or maim with your bare hands?

I think you put too much value into what amounts to a box made out of stucco, toothpicks, and cheap IKEA compressed cardboard furniture. 

Ammo, food, water, and the will to kill without question for your own survival; these are the only things that will have worth at that time.

I had 3 years of military experience. I was a fairly good shooter back then but since I am much older and have less sharp eye now, I am not sure if I can be as good as I was once.

3 years of military experience means you're probably a well trained rifle man at least. But what happens when the ammo runs out?

Can you kill a neo nazi charging full bore towards you with a simple bow and arrow? You can't simply wound the type of animals we'll see when this all plays out, you have to hit the kill shot (vital organs, head).

Those who can't do the above risk watching their family members and relatives eaten alive by cannibals.

 

[IndieDev]

6. Finally, Is this a good time to buy? Will the home price go down further? Should I wait???

Unemployment is still high, the U.S Dollar is being turned into worthless pulp by the FED, and the U.S is currently engaged in numerous foreign conflicts that are unpopular both abroad and domestically. In 6 months, when hyperinflation destroys what is left of the U.S economy, families will be reduced to roving bands of cannibals, reduced to eating their neighbors to survive.

Is it a good time to buy? Only if you can purchase tillable land on defensible terrain.

If you expect hyperinflation, then isn't it a good idea to buy a home instead of putting cash in the bank and watching it becoming toilet paper???

Only if you expect to be able to adequately defend your home from neo nazi cannibals. How's your aim? Can you hit a moving target at 30 yards with relative ease and consistency? What happens if the ammo runs out? Can you kill or maim with your bare hands?

I think you put too much value into what amounts to a box made out of stucco, toothpicks, and cheap IKEA compressed cardboard furniture. 

Ammo, food, water, and the will to kill without question for your own survival; these are the only things that will have worth at that time.

That is why I have an armed house with over 1000 rounds of ammo in my safe. 

That's a good start. Do you think 1000 rounds is enough though? What if you were to be engaged in 8-12 hour firefights with neo nazi cannibals everyday for the rest of your life?

I would suggest the following if you don't have them already:

- 6ft wide moat filled with 500 gallons of diesel fuel surrounding your complex.
- Water purification system
- Underground hydroponics room, think about 2,000 square feet or more at LEAST for a family of four.

That type of preparation might give you a survival rate of about 35%, which is excellent compared to your average unprepared suburb family.

 

[NoSoup4U]

If you expect hyperinflation, then isn't it a good idea to buy a home instead of putting cash in the bank and watching it becoming toilet paper???

This might be what happens to Irvine.  Home prices here will stay flat as inflation creeps up but your actual home value will go down in terms of real dollars.  I have no statistical data to back this up...just a hunch.

 

[shokunin]

I am thinking to put down 300K and do not want to pay more than 2K per month toward home (mortgage+Tax+HOA etc..) because that's all I can afford at this moment.

That means I can afford a 400K-500K home...

Personally, I hate high mello roos and double HOA fees if you're in a condo or attached property.  It's like money down the drain every month.  If you bought a new attached product you could easily spend $800+/month alone on HOA and property taxes and mello roos.  The pro would be everything is new, under warranty and less likely to need maintenance.

However, I'd rather sock away some of that $$$ that you'd save on an older detached house with a lower single HOA and no mello roos and put that into a house maintenance account.  When maintenance needs arise, you would tap into that fund.  At least when you "redo" or fix something it'll be done to your tastes and aesthetics.

 

[usctrojancpa]

USCTrojanCPA/
Thanks! So much of my questions are matter of my personal preferences... 
ok...
About picking a community to live in... I was primarily asking that question in the perspective of an investor. Which community will gives the most value increase of a home???

And for the timing of buying an home, let's put a side my family. For purely investment purpose, is it a good time to buy? Or is there very high chance that the price will go down further????

Considering the fact that the market is very volatile, I guess I should buy detached rather than a condo???? Is this a good idea????

BTW, I am looking at a SFR buit in 80s. Is this conidered to be a too old home? Are these homes hold its value well? Or will it go down because these homes are too old?

Irvine not be the best city to make an investment in residential housing but if I had to pick I'd look at old Northwood, West Irvine, Woodbridge, and Oak Creek.  I think that Portola Springs might have the best chance of future appreciation as gets fully built out.  I would focus on looking at detached condos or homes.  If a property is maintained well and it checks out when you get a home inspection, I wouldn't be too concerned about how old it is.  As for timing, I think there are currently more downside pricing pressure than upside due to the headwinds that we are facing.  Can property values in Irvine fall by 5-15%?  It's possible...will it happen?  I have no idea.

 

[test]

....  It's like money down the drain every month ....
I'd rather sock away some of that $$$ .... with a lower single HOA ..... and put that into a house maintenance account.  When maintenance needs arise, you would tap into that fund. 

That's exactly what the HOA does, and they can get things done far cheaper due to volume.  A significant portion of your HOA fee goes into the reserve fund.

 

[lcms2002]

Everyone would prefer a newer and detached house, but when it comes down to finance, we have to choose between a newer attached home and an older detached house. In Irvine, the older house in this range must be around 30-40 years old. If you are handy and enjoy home improvement, you may get the older one. For me, it is just a lot easier to buy a new home in a new neighborhood, new schools and new parks. We enjoy the house the day we move in, one of my friends had to tangle plumbing issue in the first month they moved in. The driveway is nice, but I would prefer the newer floor plan, it is much nicer. I figure I spend more time inside my house rather than on my driveway!

 

[iacrenter]

I figure I spend more time inside my house rather than on my driveway!

IHO would cringe at your comment