Portola Springs Melloroos???

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iceeman_IHB

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<p>This is my first post...i've been following the threads here for some time but never bothered to register till now. I've been in the market (looking for a new and first home purchase). I moved to Irvine little over a year ago and love the city. I work for a prominent software company here in Irvine and make decent money (sub $100k/yr). I have good credit ( sub 750) and fair track record ( no major debts with exception of student loan from UCLA and a car payment). I have yet to apply for a pre-approval, but one of my buddy from the RE industry told me that it shouldn't be a huge problem getting approved, rather the amount of approval will be the question.</p>

<p>With such high market price in Irvine, it's almost impossible to buy a new home, let alone a condo or townhouse. I'm in my late 20s and looking to buy a decent townhouse or a small detached unit with minimum of 3 bedrooms. I visited Portola springs over the weekend and looked at few homes including the Decada models by California Pacific Homes. I was not shocked by the price of the unit, which I expected due to Irvine locality...but rather shocked by the Melloroos. $470 /mo ??? What the hell is melloroos and why is it so high? I thought paying the HOA and sub HOA was bad enough. How does one ever get into a house here unless u put down 30% or greater or buy it cash outright? </p>

<p>I know there's abundance of affluent families in irvine...not to mention numerous extension families buying up a unit together...but this is ridiculous. $470 for just melloroos? There goes my dream of buying a house in Irvine.</p>
 
By the time you add up the property taxes, HOA (and sometimes sub HOA), Mello Roos, and various other bonds and charges (vector control, etc.), you are looking 2.0% annual property tax. That's $12,000 per year if you buy a $600,000 townhouse, or $1,000 per month in addition to your mortgage. It is basically a tax (bond) for the construction of schools, utlities, roads, etc. In the old days, this is an expense that builders absorb as a cost of doing business (although they would probably just pass it on to the buyers). More recently, in newer communities such as Irvine, these costs are funded via bonds that homebuyers will assume for the next 15, 20 or 25 years. Note, not all parts of Irvine are subject to Mello Roos, but then again, these are the older neighborhoods that don't have the WOW! factor for younger families.
 
<p>iceeman,</p>

<p>Mello-roos tax covers for having "newer" schools, roads, and parks. Similar homes like Decada's can be as low as $90/month at a housing development in Irvine that is around 6 yr-old. Your annual property tax is generally 1% assessed value + melloroos. Go into this site: <a href="http://tax.ocgov.com/tcweb/search_page.asp">http://tax.ocgov.com/tcweb/search_page.asp</a> and type in the address to calculate the mello-roos.</p>
 
Iceeman...I feel your pain as I just moved out here about 1.5yrs ago from the midwest. Thought I was doing well until I started looking at Irvine housing prices and crapped a brick. However, if you are not against commuting I have found some good deals in San Clemente and San Juan...although you would have to deal with the morning traffic. Anyways, if you are serious about buying it is probably worth a gander at those communities. I personally am not going to even sniff at looking in Irvine until my uncle's pigs fly on his farm.
 
<p>Thanks for the feedback everyone. I'm just frustrated with the whole home buying experience. I didn't realize there were so many additional fees that I would have to be obligated to. It's worse than buying a car from the local dealership which I thought was a horrible experience.</p>

<p>The reason i'm so frustrated is because I really like and want to live in Irvine ( just like most of you). I grew up most of my life in OC (Garden Grove and Fountain Valley) and went away to LA for college. After landing a job in LA and realizing how much I hate LA, I decided to move back home and plant my seeds again in OC. After landing a decent job here, I realized how much more I like Irvine and the whole community including proximity to everything you need (from the beach, hills, malls, etc) with sense of security and relaxation of the wide open roads (which I assume will change with more new communities being built around Irvine Ranch). Nevertheless, Irvine has always been a hot destination for young families and now for jobs...but with such ridiculous home pricing, how can one afford to get into one permanently (not just for few years before you have file foreclosure due to bad mortgage packages).</p>

<p>I personally thought this whole home buying experience would be exciting and even fun. But the more I look, the more I am discouraged to buy one. I recently attended a seminar for first time home buyers, and learned that regardless of what the U.S. economy is or has performed...and regardless of the real estate industry situation... Irvine always seem to be an exception. It seems to be in its own little bubble...yes I'm sure there will be some effect but not necessarily devasting or even shaky like rest of the nation. For this reason, I am convinced that I should buy a home in Irvine ...which i plan to live in for atleast for the first 5 years. </p>

<p>Going back to the Melloroos. Are melloroos fees the same throughout community or based on individual builders? Thanks againg for your input everyone.</p>
 
Iceeman,





It varies by village. Woodbury has mello-roos in the 0.6% range, which is obscene, but not quite as obscene as Portola Springs and VoC at 0.8%. I believe that most Irvine communities had Mello-Roos at one point in time. If I'm not mistaken, some parts of Westpark and Oak Creek are still paying Mello-Roos despite being 8-15 years old.





-OCR
 
<p>Oak Creek Renter,</p>

<p>Can Melloroos be built into the mortgage as part of the loan and paid up in lump sum or is it a separate monthly fee? Thanks again.</p>
 
<p>Iceeman,</p>

<p>There are many area of Irvine do not have Mello-roos or HOA. If you tell me how much you want to pay per month max for each I can point you to.</p>
 
hey iceeman, i know what you mean on the mello roos... it's just the price you have to pay to live in NEW irvine communities. keep in mind that older homes have significantly lower mello roos or none at all, so you might want to check those out too.





i consider myself pretty fortunate because i was in your exact same situation 5 years ago and managed to buy a new house in irvine in my mid 20s. even back then for the first few years of owning my house, i was living off coupons and ramen noodles lol. i know that if i was looking to buy now, i definitely couldn't afford it. now, the only way i can "move up" to a larger home is to use the equity in selling my house.





my humble opinion on irvine housing prices? it will slowly but surely come down, but i seriously doubt it will come down to rock bottom levels like 150k - 200k that many people in this blog believe. all you can do now is save up as much as you can for the down payment. you'll find the right house.
 
<p>nirvinerealtor,</p>

<p>Thanks for your consideration. Unfortunately my stubborn mindset has me fixated on new homes. I pretty sure there's better value out there for older homes, but I'm just too locked in on a new community home. To give you an idea... i rather drive a brand new Kia than to buy a used Mercedes...that's just me. There's nothing like being the first owner of anything..yes, there is a price to pay..but in my book - it's worthwhile. </p>

<p>Sportsfan8, </p>

<p>I don't mind living off ramen noodels and coupons ... heck, i'll pick up a second job if i have to. I just want to get my first home in timely manner. I've been in the market for about 8 months now...and probably missed the boat. I heard it may be awhile before the boat returns, but i'm willing to jump in and hopefully swim my way little closer to the boat off in the horizon. As I stated previously, I'm not buying a house to flip...rather it's just part of the American dream and my personal goal. I plan on living in the house / townhouse for many many years to come. I am not married nor have pets...so upgrading to larger home is not part of my plans for time being. </p>

<p> </p>
 
Iceeman,








Mello-Roos is assigned alongside your normal tax bill, so I don't think you can pay it up front.





You can make it part of your monthly payment, though. Typically a mortgage company will offer to charge you extra every month and put it in an escrow account, then use those funds to pay your taxes, although I wouldn't recommend it (it would be better IMO to set it aside yourself and earn interest on that money).





-OCR
 
<p>Iceeman --</p>

<p>The shock of Mello Roos and HOA together on newer communities can be quite a shock at first glance. Depending on where you live, Mello Roos will vary. Newer communities in Irvine are notorious for their high Mello Roos. It amazes me how many families can actually afford homes in VoC, Woodbury and PS that have these high assessments which can easily shoot a mortgage up 1000-1500 bucks a month. </p>

<p>Try not to be too discouraged with buying in Irvine. It will be some time before prices fall to relatively sane levels. In the meantime, save your cash and eat at In-N-Out (beats Top Ramen any day!) </p>
 
<p>haha, i know what you mean on buying spankin new homes. i was the same way when i was looking for a home. plus, it's fun choosing your own options and customizing things around the house.





some people in this blog have their eyes set on orchard hills. not sure if you've heard about it. i'll probably check it out too, and maybe prices will have gone down just a bit more. we shall see. </p>
 
<p>iceeman,</p>

<p>You'd be CRAZY to buy a house in Irvine (or anywhere in the OC) in the next 2 years. Just be patient. What do you have to lose by waiting? Nothing. What to gain? You will have a bigger down payment -- which will save you loads of money down the line. You will also have a very, very good chance of buying the home you want for less (even the perma-bulls acknowledge that, at best, prices will be flat for the next two years).</p>

<p>Re: Mello Roos, you can think of it as "rent." Even if you pay off your mortgage, you will still be effectively renting your house.</p>

<p>As for Portola Springs, I am a big fan. But one of the big draws for me was that it will be a walkable/bikable community - walk to grocery store, use the trails, etc. However, it appears that the Retail Center is not scheduled to open until 2012!! And that was before the recent housing slowdown (the builders at PS have slowed down their phase releases). To echo irvine_native's comment re: the elementary school, who knows how a slower pace of sales will affect when these community assets are completed -- I would bet negatively.</p>

<p>And whatever you do, don't buy that garbage that since prices in Irvine have never gone down in the past, they will never go down in the future. Prices are dropping RIGHT NOW in Irvine. Check out the Decada discussion on this forum. If you bought in Phase I, you would have already lost your down payment.</p>
 
<p>Thanks everyone for a very informative insight into Mello Roos and the home buying experience.</p>

<p>I'm getting mixed reviews of when to buy a home in Irvine. Yes, i understand that even Irvine will experience a leveling or even price drop during the next year or two...but from what I have heard is that getting in early is better than later when the prices start to rise again slowly. This will affect my chance of even getting in at all..when all the new homes are taken up by people with more money shows up knocking on the doors. </p>

<p>I know I'm not buying anything within next 6 months...but at the same time I am eagerly and impatiently looking to get into my first home by end of this year ( assuming prices are fair). </p>

<p>Saving money for larger downpayment is great, but at the same time...i'm spending $1500/mo just on rent..which is not recoverable. I just filed my tax return for last year..and it's amazing how much I paid Uncle sam. It hurt me even more because I don't have much write-offs or deductions, so the sooner i get a tax write off..like mortgage interest..it's better for me.</p>
 
whether you're buying a year or two from now... if you found that perfect floorplan or location, if you plan on staying in your house for at least a while, if you're putting down a good chunk for down payment, and if you can comfortably afford a 30 year fixed mortgage, who cares what people say?
 
i don't suggest buying a home for tax deductions. i did that a couple years back. the tax return checks are awesome, but it goes right back into your property tax. So it almost balances out.





or maybe i'm just doing my taxes wrong.....
 
iceeman,


I second sportsfan8!





There are hundreds of reasons to-buy and not-to-buy. As a realtor, I face with the same question every time I decided to make a home purchase. Here are the questions I ask myself (not my mom or my friends) whether to buy or not,


1.Do I want my own a home or have a good reason to own a home?


2.Can I afford it?


3.Will buying house improve my quality of life?


4.Am I up to the sacrifies?


5.If the price drops after I buy, will it effect me greatly emotionally and financially?


6.Do I love the house I am buying?


7.Do I have an exit plan if my house drop in value and or if I do not have a job anymore.
 
<p>nrivinerealtor,</p>

<p>great input and advice as usual. Those are the very same questions i've asked myself...and yes, I know there may be more sacrifice needed in order to afford a home (especially in Irvine). I am ready to make that sacrifice. I'm just sick and tired of paying rent and moving around. I want to settle down and relax in my very own home...in Irvine that is. </p>

<p>It's like owning a ferrari (assuming it doesn't depreciate too much). It's just a means of transportation but is it? Ferrari is a status symbol and the joy of owning one is speechless. The stares you get from people is priceless and knowing that you have a nice car can be worth the sacrifice of living off ramen noodles. To my point, owning a house is a personal goal of mine. To show my friends and family that I have a home and that it's not impossible to do. It's self gratifying and hopefully equitable as well. </p>

<p>I know the risk involved with buying a home (especially in today's market), but from the study i've done...buying a house is one of the safest investment ( just as long you keep it for a long time). I think of it as my 401k plan almost. There will be times when the return isn't as great,but over the long haul..it will be well worth it. </p>

<p> </p>
 
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