What's going into escrow - Irvine and maybe some Tustin too

NEW -> Contingent Buyer Assistance Program
<p>"If you like Northwood Pointe, why not go after 29 Lynnfield. It’s a little smaller than 26 Wedgewood but I think it will sell into the mid to low 900K range."</p>

<p>Ten - I think Lynnfield is the same plan as the Blue Spruce that just closed for $980K. If they would sell it today in the low $900K range I would buy it site unseen.</p>

<p>Blue Spruce had a bedroom in the front of the house vs. Lynnfield with a loft in that spot. Lynnfield is much nicer than Blue Spruce IMO, i.e. nicer and more upgrades, good remodel/construction choices, etc. and actually has more square footage than listed as they built another loft area over the living room. In Blue Spruce, those were vaulted ceilings downstairs. I would estimate that the square footage of Lynnfield with the loft addition is in the 2900sf range. </p>

<p>One of the issues I had with Blue Spruce was the smallish family room. In most of the Lexington plan 2 models, the family room and living room are separated by a wall with a big cut-out. Most people put shutters in the cut-out. With the vaulted ceilings in those models, if you are watching TV in the family room, the sound travels unabated from the family room right to the doors of the secondary bedrooms upstairs. On Lynnfield, they put a big built-in on the wall that Blue Spruce had the hole with shutter. Also with the loft addition over the living room area in Lynnfield, you can makes all kinds of noise downstairs and not have it hammer the upstairs bedrooms.</p>

<p>I think there is no absolutely no way it sells for under $1M. I expect it will sell for $1.025-1.05M or so and get into escrow fairly quickly. Trust me, I wish it were different, but NW Pointe has some recent comps and they don't support that place going for sub $1M. </p>
 
<p>"Ipop, do you have to sell your house before you purchase another ? If so, is yours currently listed? "</p>

<p>No Troop. I am non-contingent, i.e. don't need to sell my place, up to a purchase price of about $1M. As the payments on my home are so low, and you get a 75% credit of market rent value when qualifying/underwriting, my existing home would actually help me out ratio-wise when I go to get a mortgage. I will sell it though. When we get into escrow on a property, I will immediately market mine and take a lowball-ish price to move it. Once I sell mine, I'll refi the loan on my move-up home and put the extra equity into that place.</p>

<p>Now if my place falls below my mortgage value, I don't know what we'll do... It would have to decline another 35-40% or so for that to happen. At these mortgage rates it will be a screaming good rent-saver deal after another 10-15% decline so unless rents seriously tank, I can't see losing much more than another 20%.</p>
 
Of course, I've got to ask...why aren't you trying to sell now and ride out the 20-30% decline in a short term rental house ? Also, holy cow.... who's underwriting your future mortgage ? Unless you're going to have a ton of skin in the game....it seems like a tough qualify. No ? What...do ya make seven figures or something ?
 
<p>Unforuntately for me Troop, the wife doesn't want to rent. No talking her out of it... I have to ride it out and go through the stress of selling when we buy.</p>

<p>I'll have 20-25% down, and I'll qual on an ARM at purchase then refi into a fixed when I sell my place.</p>

<p>Figure $750K mortgage on a super jumbo 3/1 or 5/1 ARM interest-only is 5.75%. Monthly spend on interest is $3600. Taxes, HOA, insurance, another $1200 per month or so. Total of $4800 of spend on a $750K mortgage. Assuming one is debt-free such as myself, i.e. no credit card payments, car payments, student loans, etc., we would just need to have $160K of annual income to hit a 36% back-end ratio. My teacher wife grosses almost $80K (thank you IUSD) so hitting $160K isn't a problem.</p>

<p>The traditional lending standards IR speaks of lenders getting back to are 28% front and 36% back. If you have no other debt, your front and back ratios are the same... With 20-25% down, I think lenders will still let you go 32/40 on ratios. Not so sure about that though as it's been a few months since I got pre-qualed.</p>
 
IPOPLAYA,



It probably won't affect you given the pay you are pulling for your CFO position. But in case you are not aware, when banks qualify people for int only ARMs, they don't use the int only ARM rates, they use the fully index rate with full amortization. For example, for a 5/1 arm of 5.5% loans, instead of using int payment on 5.5% interest, the banks use the fully amortizaed amount (interest + principal) based on fully indexed interest rate of 6 3/8 %.
 
<p>Guess I never realized that 123... Never had someone push back on my ratios. Thanks for the clarification.</p>

<p>On my hypothetical $750K loan, which I will never do since I refuse to drop a mil on a house, that would mean we'd need $200K gross income to hit a 36% back.</p>

<p>Be right back, gotta ask the boss for a raise!</p>

<p>:) </p>
 
ipop said "Unforuntately for me Troop, the wife doesn't want to rent. No talking her out of it... I have to ride it out and go through the stress of selling when we buy."



If I do not buy by sometime this year I am toast! No enticement or economic sense is going to work with the wife beyond this year.
 
Me three on the "wife not waiting anymore". It took some sweet talking just to gain agreement to extend our lease out to Dec 31, 2008. January 1, 2009, I am officially in the market, wherever it may be at that point. Even though my hands may still be bloodied by the falling knife at that time, at least the cuts will require fewer stiches than if I would have bought in 2006.
 
<p>What is it with these women you've married ? In the nicest way possible, I want to say....don't they have a head on their shoulders ? Nesting, schmesting....I'm a chick and if I could conceivably save 100K by waiting, it's a no brainer. </p>

<p>I'm wondering if you men don't secretly feel the same way (as the wife) about wanting to buy a knife-catching house.... but conveniently "blame it on the wife" for possibly making a poor financial decision ! </p>
 
Trooper, did you not see that picture on one of the threads of the puppy that said "Your logic makes the puppy sad"! Logic does not work all the time in relationships, men are from mars, women are from venus?:-)
 
<p>LOL Troop. My wife is special ed teacher for kids with severe disabilities. They don't come much more nesty/schmesty than that. She'd rather own a smaller home down the line and keep our young boys rooted in the home they were conceived at, born to, grew up in for these past few years than selling and going to a rental for who knows how long. She doesn't care much at all about money. She just wants a guest bedroom so family can visit with ease (right now it's just the ole futon in the very small office) and a decent spot to put the Xmas tree every year... As long as we can live comfortably, losing that paper money we never had doesn't motivate her. It's actually a nice counter-balance to a money-only thinker like myself.</p>

<p>The upside is her shoes come from Off Broadway, clothes from Gap (sometimes even Costco), and she doesn't mind driving an American-made 6-year old SUV!</p>
 
Oh Sarge - You are soo-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o-o wrong.<p>


It is not a blame thing. It is difficult to get one's wife on the same side when trying to make the own to rent move. You know my situation and it was tough. I know others, and it was tough. It took me two or three years of preparing my wife. It took bribery and demonstration of the type of home and neighborhood we would rent. There was much angst and even recriminations even after the decisions had been made.<p>


By nature, women are nesters. I don't care how sexist that sounds. I have lived it first hand.
 
<p>Yeah, maybe you are right troop, I want to as bad as she does. We are getting old. And renting is getting old. I'm not so worried about the paper loss, either --- as long as we can afford something we can be happy with for 15 years. And then we can downgrade because children are gone. We are <em>*right there*</em> on affording something we would be happy with <em>today,</em> because things have fallen so quickly. I'm not buying for appreciation --- if I read the analysis posts correctly, appreciation isn't coming back until what, 2015? 2017? 2020? You guys can rent for another 8-10 years, or whenever 1989 pricing returns (yep, I read that here yesterday), I'll pass on waiting for that, just like I'll pass on waiting to see MC Hammer on the Aresenio Hall show again (that's fits 1989, right?). </p>

<p>We are buying a home, not an investment. For me, there is too much investment return talk mixed in with home talk here on IHB. Maybe I am too much of a simpleton, but in my mind the comfort and merits of owning a home have very little to do with the price of gold. For us, its just all about finding something we like and can afford. After that, it's all about writing a check to the man every month, and enjoying our home and our lives. And not worrying about what everyone else is paying or not paying for their house. I can't control that. </p>
 
CK- right on. if you want to buy after reading this blog then you should. cause you are buying a home to live in and not for investment purpose. just as long as you can afford it then it is all good.
 
I had to sweet talk my wife into waiting another 12 to 24 months recently. The same conversation took place a few times already in the last few years and I expect for it to come up again in about 6 months. What ended the conversation each time was "if you're Ok with spending $100k more now rather than waiting another year then let's buy now". It has worked every time so far.
 
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