Considering New Home Purchase - Need Advice

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Thanks, IR (and haven't said it before, but thanks for all the work you've put into this site). Re the Tustin property holding value, it would not be ideal, but if this 1M house drops down to 600k-800k permanently or even semi-permanently (meaning beyond 20 years), then I think we'll have to resign ourselves to retiring there.



Alternatively, I expect that we could pay it off in 20 years or less, so we wouldn't necessarily need to sell it for the same price as what we bought it at. We could sell it for, say, 600K, and w/ no loan to pay off, that would give us 600k to put down on the next house. Next house might not be that much of an improvement, but I have to think that a 600k down payment will give us more power in 20 years than the 140k is giving now.



Throwing money away doesn't look too smart in any market, but my necessities are outweighing my principles presently.
 
<p>giltee,</p>

<p>I am assuming you have read the other threads on VOC here. Try this one:</p>

<p><a href="http://forums.irvinehousingblog.com/discussion/1226/">http://forums.irvinehousingblog.com/discussion/1226/</a></p>

<p>I hope it helps...</p>
 
I agree with everyone that the Ciara house is a no-go. My gf wanted that Ciara house too, but in the end, I made the same decision to take one step down at a much better price.





I also think you should go for the VOC over the older westpark homes. I hate the feel of the homes built in the 90s and it appears your wife feels the same way. Since you don't plan to have kids and don't mind living there till retirement, who cares about future resale.





I assume you're talking about the Gables right? Make sure you negotiate on the price. They have tons of plan 3s and I'm pretty sure you'll be able to get a great deal.
 
<p>LOL rtlguru. Written like a man proteching his property value in some small way... Good for you!</p>

<p>One of the reasons why Westpark will hold up well in terms of value is that it is anchored by a well-regarded elementary/junior high in Plaza Vista. While Columbus Grove does have access to Irvine schools, they are over in Woodbridge, not local. I don't even want to consider the schools in Columbus Square... If they don't build a new school there, and who knows if that really will happen or when it will happen, people won't buy there due to issues with the quality of schools.</p>
 
hah, no no! Remember, I'm on the Irvine side, so his purchase on the Tusin side shouldn't help me much. I plan to have kids one day, so the Tustin district was a dealbreaker for me. More than anything, I felt like a sales associate for lyon or Lennar when I was typing my response.





I know you're just joking, but I know nothing I say on the internet will prevent the eventual side in prices. Like you, I bought knowing there was a good chance I'd be down 15%-20% sooner or later.
 
A couple with no kids living in a 4000 sq. ft home? When you get older, it's going to be very tiresome to get from one end to the other. Hahaha.
 
<p>giltee, unless you have a contract, I wouldn't rely on your bonuses to help pay you mortgage or property taxes. I would pretend you weren't getting one - and then when (and if) you do get that bonus - then it's a bonus. Don't rely on it as your salary. </p>

<p>4,000 sq. ft house for two people - are you crazy! Heat, A/C, maintenance issues - way too much for two people. </p>

<p>Live within (or below) your means. You'll be much happier in life.</p>

<p> </p>
 
<p>Columbus Grove is a great place to live. It's close to the 405, the District, the Airport, and the rest of Central OC. I admit that Irvine is a good place to live, but being the biggest city in the OC, there are old areas as well as new areas, fun areas as well as isolated ones. So being "Irvine" does not necessarily make an area a premium over Tustin. Irvine primarily borders Tustin, Unincorporated Land, South County, and Newport Beach. The Newport border is very desirable due to its proximity to the hills and beaches of Newport. The Tustin border is highly desirable due to its proximty to Tustin Ranch, the Marketplace, the District, and Central OC. But I think the Unincorporated Border is basically the edge of civilization. Irvine is already dead enough, living over in Portola or Woodbury is like living on a cemetary. As for the South County border, it's only worth it if you are South County oriented.</p>

<p>Personally, I my ranking is:</p>

<p>1. Newport Border - who wouldn't want to live next to or in Newport Beach.</p>

<p>2. Tustin Border - perhaps there might be a chance of urban growth in this metropolitan area.</p>

<p>3. South County Border - there's the Spectrum and access to South County.</p>

<p>4. Unincorporated Border - you might as well move to the Inland Empire. What do all great cities have in common? Population and people. Don't be tricked by the appeal of the new homes, and move yourself ever so closer to the OC deserts.</p>

<p>It seems to me that you guys aren't raising a family anytime soon. It would be best to live close to a more social environment. Try to stay close to Newport or Tustin. Keep close to South or West Irvine. Stay away from the East.</p>
 
Right on. For those still concerned, we're not going to go with the 4200 sf property. Thanks to your input, I was able to form a solid opinion against that. We're going out looking one last time this weekend and will likely settle on the other VOC property I mentioned. It's priced closer to 1M, has roughly 3000 sf, and will leave us with a considerably larger cushion and the ability to adjust regardless of a drastic rate reset in 3 years.



Re the one comment about the risk of a 3/1, for our particular situation it makes the most sense, as it will allow for the lowest interest rate for the time being, and w/in those 3 years, we'll take the principal balance down enough that we'll most likely be looking at a conforming refi vs. a jumbo one.
 
<p>Gosh, 3000 sq. ft for 2? And a million dollar? Would something in the range of 1700 sq. ft around $700k be good enough?</p>
 
Let me add another word of advice for not overbuying a larger house than you require. It's tempting to believe that stretching to purchase a larger house now will translate into a quicker or more attractive sale in 15 to 20 years.





For one thing, financing all those extra square feet and the much higher assessed valuation for 20 years wil be a huge financial commitment. More MRs, property taxes, mortgage payments, utilities, water, household maintenance and services. And for what---hoping that 20 years from now, buyers will still want huge houses? Just think how much money you can save annually by selecting a smaller home.





With the tendency toward smaller families and the "greening" of attitudes toward waste, the buyers of the future may be looking for much smaller, and less gluttonous, housing options. People may not be as fixated on housing as a status symbol in 20 years. I raised 2 children in about 1000 square feet of space and it was really enough room.
 
I totally agreed with you JniWB.....we pay a premium for this wonderful weather, why would someone want to stay inside? A house is just a place to sleep, eat, and shower. I am happy with 1400 or 1500 sq ft.
 
Actually, it's not so much that we need a big house, we just need certain features (such as a bonus room) and we need certain rooms to be larger than average (such as for our office), and a certain number of bathrooms so we can keep the cat box out of used space (indoor cat). Aside from the commute, we're pretty happy in our 1700 sf Fullerton townhouse, but our office is too small, and we've got no space for the pool table or the cat box. We're indoors people, so we want certain areas of the house to offer certain comforts. These wants don't necessarily translate into wanting 3000 sf, it just so happens that houses of that size are more likely to offer those certain rooms that we want at the sizes we want.



As for line of work, we've both been at our respective companies a good amount of time and have avoided debt (other than mortgages) like the plague, so our income is steady and at an ok level to go for a 3000 sf house. By no means high rollers...we have to continue to be careful w/ our funds. We could probably squeeze in the 4000 sf house, but that would make the budget much tighter and the proposition much riskier.
 
giltee -



I noticed a comment about taking a 3/1 jumbo upfront and then expecting to change to a conforming loan later. I think that you should really consider the mortgage futures market and where things are headed. there are many resources if you are willing to google. In three years, a fixed conforming mortgage will easily be in the 7.5-8% range... and your house value may impact your ability to refi. Of course, if you are making 250K+ and only have a 450ish mortgage in three years... I'd agree that it would be no big deal for you.
 
Buyers purchasing in the newly-built areas now, will be selling an old house in 20 years. They will probably hear comments such as, "I don't like the floor plan", "I don't want to re-model to bring it up to 2030 standards", "I hate hard wood and travertine---too much noise and maintenance", "What is this fixation with Tuscan architecture?"
 
GUII, I was set on the 3/1 jumbo but I've read enough here in this thread and w/ your comments to think about stretching that out. Might be worth to pay more for a 10/1 jumbo (assuming it'd be less than a 30-year fixed jumbo). I'll probably have to make a decision pretty quickly, so this will be bouncing around in my head this weekend as we're doing our last pass on available houses before making a decision. Thanks.
 
Thanks for being so open with us regarding your decision, <strong>giltee. </strong>I wish you the best as you and your wife enter into this wonderful phase of your life. Good luck with everything and congratulations!
 
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