Edhat
npr edvertisers
visitors movie times

Santa Barbara Weather: 68.4°F | Humidity: 67% | Pressure: 29.93in (Rising) | Conditions: Overcast | Wind Direction: SE | Wind Speed: 2.2mph [see map]

Free Newsletter
Advertise
  login  twitter  facebook  RSS 
 
 
login
    15009 Subscribers
      695 Paid (4.6%)
     87 Comments
     56 Commenters
     43326 Page Views
 
 

 
The Winehound
The Winehound
 
Walk MS 2014
Walk MS 2014
 
All Gaucho Reunion April 24-27
All Gaucho Reunion April 24-27
 
Advertise on Edhat
Advertise on Edhat
 
News Events Referrals Deals Classifieds Comments About

more articles like this

Advice For First Time Homeowners
updated: Dec 13, 2013, 11:35 AM

By Edhat Subscriber

Can we get some local advice for first time homeowners? We are a young professional couple (both 28) who are coming in to a decent amount of money that would allow us to put a down payment on a home. The amount will be around 75k (btw, this amount will be considered a "gift" so that is a whole other story we will have to take care of). We would like to begin looking for a house and have just started our journey (as we originally didn't plan on buying for a few years). We need some type of yard for our dogs, but would do a condo as well. Can anyone offer tips they wish they would have heard as first time buyers? Thank you!

Comments in order of when they were received | (reverse order)

 COMMENT 476943 agree helpful negative off topic

2013-12-13 11:55 AM

Get a good realtor; makes all the difference. And if the realtor doesn't listen to you, go find another one. They work for you.

 

 COMMENT 476944 agree helpful negative off topic

2013-12-13 11:55 AM

If you leave the area, you can get 40x more home for your money! No really, my advice would be to use the 75k to travel the world until it runs out, then get back to work and continue with your pre-gift plan.

Congrats on the generous gift! Sorry if this isn't what you wanted to hear... but think about it, it's all out there waiting for you and there aint no loading your save game if you have regret. :)

 

 COMMENT 476945P agree helpful negative off topic

2013-12-13 11:55 AM

If you only have 75k for a downpayment doesn't that limit you to around a 400k loan? In which case for this area you are only looking at smaller condos. Find out about the homeowners association and how they get along/dues, or look North or South of Santa Barbara to areas where you might get more bang for your buck if your hopes are set on a yard.

 

 COMMENT 476946 agree helpful negative off topic

2013-12-13 11:56 AM

$75 K is a 20% down payment for a $375,000 dollar house if you are speaking about the broadest section of loans being approved. $375,000 gets you different things in different communities. In Montecito that might be a garage with a view of an outhouse. In The Santa Ynez Valley it might get you a 3 bedroom house with room for the dog. Your question would be easier to answer if you knew where you wanted to be. If you possess substantive income you might not be restricted as to down payment for a first time buyer so location, location location

 

 COMMENT 476953 agree helpful negative off topic

2013-12-13 12:09 PM

You can't die and bring your house with you...but you can use the money to create some awesome travel memories that you will never regret....don't make the decision that you will regret....

 

 SBSURFERLIFE agree helpful negative off topic

2013-12-13 12:10 PM

I would hold on to the money and still wait a few more years. Right now it is a sellers market and you'll most likely end up over-paying or being out bid by all cash investors. Wait a while for the market to even out or dip again. Call realtor Ann Rassmussen for advice, she's a straight shooter.

Also, don't go for a condo. You'll end up paying more in HOA fees. They are astronomical in SB for some reason.

 

 COMMENT 476966 agree helpful negative off topic

2013-12-13 12:38 PM

Move! There are places in this country where $75k will BUY you a nice house, not just provide a modest down payment. Heck, you'll have money left over. Then you've got no mortgage, nest egg, and you're in an entirely different class of living. I recently saw a gorgeous 2500 square foot place on 3/4 acre backing a green belt in Tennessee for $69k.

SBSURFERLIFE, prices aren't going to come down in SB for a while. We just bottomed out from a 5 year correction. Historically, the cycle is about 10 years, tho we don't really have historical precedent for such a large bubble. And that's assuming SB county prices ever see another big drop like the one we just saw. This huge drop happened because of financial shenanigans that won't happen again. They'll need to come up with entirely new shenanigans to create another bubble like that. If you've got the money and you can find the right property, this is the time to buy.

 

 COMMENT 476967 agree helpful negative off topic

2013-12-13 12:39 PM

I know a few people in your situation that were able to buy a condo in Carp with a small yard. You're not going to get anything amazing, but there are places to be had. We bought a condo in SB a few years ago and love it. Yeah, it's not a house, we don't have yard, and we share a wall. But, we live in an amazing area and we're not millionaires so I can't complain.

Don't let people dissuade you, there is nothing wrong with a condo. Watch out for HOA fees, but they're not all that high around here and the HOA will cover other costs you may have with a home.

But in this area you're going to have to dump a ton of money into a house unless you're budget is 900k or higher.

 

 SBSWEETPEA agree helpful negative off topic

2013-12-13 12:42 PM

Take your time to look. If you plan on having children you will want to think about the school district. Make sure you get a really good home inspection. Be there with the inspector don't just take his/her word for it have him/her show you any potential problems. We bought an older home and everything was in good working order and we thought it was a cosmetic fixer, but then the plumbing went out that mushroomed in to a bathroom remodel because the plumbing was in a concrete sub-floor so that meant jack hammering the floor out. Next the furnace died. So we spent a small fortune on things no one can see... under the house, in the walls, over our heads, new sewer line. It goes on and on there is always something in a house to fix. Save your money and get appliances, fixtures etc on CL or at the Re-store. All of that being said I love my house and it has been a labor of love but I get a real sense of pride in what I have done. Good Luck to you! Roll with the punches. Enjoy!

 

 COMMENT 476970 agree helpful negative off topic

2013-12-13 12:43 PM

946 what would monthly payments on this roughly be? just cerious as i am a financial knowlege challenged.

 

 COMMENT 476971 agree helpful negative off topic

2013-12-13 12:44 PM

When you find a house, pay close attention to the home inspection to see how much work you will have to do to bring the house up to code. I bought a 1949 house that needs new wiring, has no insulation, and has only had part of the piping replaced. I am getting to do all of this stuff myself.

Also, I try to meet all of my neighbors to make sure they are nice. There are so many horror stories about buying next to a cranky neighbor and being forced to live there for years. When you rent, you can move. Buying means you will be there for a while.

 

 COMMENT 476972 agree helpful negative off topic

2013-12-13 12:45 PM

Don't do it ... not just yet. The real estate market is still in disarray after the meltdown and even though interest rates are low you'll be dumping an inordinate amount of your income into the house.

Rent for a while an let your landlord take care of maintenance costs to your home while you save and save and save. Don't let the money you got burn a hole in your pocket and don't waste it on frivolous trips you should be able to pay for with your earnings.

If you can't save up for a larger downpayment you won't be able to keep your heads above water when you are on the hook for all the expenses home ownership entails. Seriously, buying in Santa Barbara is not for the faint of heart of for the unsecured revenue stream.

 

 COMMENT 476976 agree helpful negative off topic

2013-12-13 12:48 PM

The housing market is ridiculously high again with very little inventory. I wouldn't buy right now if I were you.

 

 COMMENT 476977 agree helpful negative off topic

2013-12-13 12:52 PM

Save the $75K. You need a larger deposit. Whoever told you to shoot your wad on travel has to be a travel agent. Be prudent and build up your kitty renting cheaply and foregoing extravagances then in 5 years at the young age of 33 you'll be able to find something acceptable. Signed, Mom and Dad

 

 COMMENT 476980 agree helpful negative off topic

2013-12-13 12:57 PM

SBSWEETPEA's post is a great example that if you buy a house make sure it comes with a warranty! They are not uncommon at all and any decent realtor should insist on this being included. Typically the seller pays for this so it is not any extra unforeseen charge for you. While it does not cover everything it does cover a lot of the expensive items that might have not been detected during an inspection.

The inventory right now in SB is very, very low. (typically low during the winter/holidays but right now is especially low). Any decent properties are selling at list price or above and if you don't have a lot of cash in hand you can only pick from the scraps which is never a good thing. A tiny, pretty much a dump of a place on the Westside recently sold for something like 720k for less than 1000sq ft on a 5000sq lot. Crazy.

 

 COMMENT 476981 agree helpful negative off topic

2013-12-13 12:57 PM

A well connected realtor can really make a difference. The seller will pay the realtor's commission, so as the buyer I would choose someone at one of the largest firms. You want someone who might find out about houses before they hit the market and your competition does. I also suggest interviewing several realtors before you commit to one. It can be an intense process and you need a good fit. Also, if you think you might have kids, pay close attention to the school district. Chances are that interest rates will be higher and your property taxes may increase if you want to move to a better area later.

 

 COMMENT 476989 agree helpful negative off topic

2013-12-13 01:21 PM

My suggestion would be to go to open houses, even if the house is out of your price range, just to talk to realtors who are "on the beat". The realtors who work open houses are usually ones who tend to work the hardest for their sellers. Therefore, they would probably work hard for you as a buyer. Face to face meeting these realtors will give you a greater sense of who you match well with instead of just walking into a firm and getting assigned.

Also, although it may sound silly, you should buy a copy of "Home Buying Kit for Dummies" off Amazon. The tips in the book alone are more than worth the $20 price. It helped me out a lot actually since I was a newbie too.

 

 COMMENT 476990 agree helpful negative off topic

2013-12-13 01:23 PM

Look at the ZIR (zoning information report) for the property. Don't buy something that has violations or unpermitted work, as you will have to fully correct that stuff before you can improve anything else. First time buyers generally get a fixer upper at full price around here, but make sure it is just ugly, not too small. "Bumping out a wall" is a ridiculous 6-figure undertaking in today's local regulatory environment. Painting, floors and cabinets are easy. Removing interior walls is generally very cheap. Try to talk yourself out of the purchase if you can.

 

 COMMENT 476991 agree helpful negative off topic

2013-12-13 01:24 PM

OP here. I should have stated that the 75k would be in addition to what we have saved and if one of us chose to dip in to our 401K's at all (which I've been told is a bad idea). Even if we didn't dip in to our 401K's, we could have close to 100k by the time we are ready to do this. I know we could put 10% and take a loan out for the other 10% meaning it would give more options locally. We already travel quite frequently and both make decent enough money to do that & pay our bills. We lucked out in the last year renting from a family friend for extremely cheap. That has given us a chance to save more & we don't want to make any moves just now anyways.

We would both move out of SB, but I was recently promoted and my job/salary is too good to leave right now. Anywhere else we would be looking at/interested in would end up in the same price range...

 

 COMMENT 476996P agree helpful negative off topic

2013-12-13 01:34 PM

Don't be in a hurry. Prices are super high right now and a $75,000 down payment won't get you much. Visit open houses and get an idea of what's available. If you're interested in condos, use the Internet to read up on how condo homeowner associations work and the importance of having an HOA that's well run. Poor HOA management can drag down the value of your condo. And in small condo complexes, crazy neighbors can make your life a living hell. If you find a neighborhood or condo complex you like, hang out there on weekends, and at night. Check the crime data. Talk to the neighbors. You're not just buying a home -- you're buying a community. Make sure it's one you want to live in.

 

 COMMENT 477001 agree helpful negative off topic

2013-12-13 01:56 PM

You can kiss at least $15K goodbye in tax on your gift, so you really have $60K extra to play with. Since you don't have anywhere near 20% down (which is not a requirement...you just have to pay more for PMI), you might consider an FHA loan. The loan limit for our area is $729,750, though you might not qualify for the full amount. You can get an FHA loan with less than 5% down. Prices are going up quickly and there is a lot of investors snatching up properties right now. But the good news is the interest rates are still very low.

 

 COMMENT 477006 agree helpful negative off topic

2013-12-13 02:08 PM

OP, seriously, look at real estate prices in other states. You believe that anything else you would be interested would be in the same price range but that simply isn't the case. Look at home prices and you'll be amazed. You can buy 10 very nice houses in some areas for what you'll pay for a single decent house in SB. That's a fact. And I'm not talking about some crumbling shack with a 2+ hour commute. Look at NC, SC, KY, TN, VA, etc. 5 figures can buy a nice house.

You just got a promotion and a raise. That's great but how much of that raise will go towards the mortgage? Are you really coming out ahead with a $2500-3000/month mortgage for the next 30 years? You're getting a hefty bump in your financial picture. Don't try to cram that money into your old life plan. Adjust your plan to maximize the potential of your new circumstances. You've got a chance to skip that whole 20-30 years under the mortgage yoke.

Talk to a financial planner.

 

 COMMENT 477013 agree helpful negative off topic

2013-12-13 02:19 PM

I'm baffled by all of the "move to another state" comments.
Presumably those people live here? Sure it's expensive but have you spent any time in the states y'all are pushing?

You can absolutely buy here in beautiful SB with $100k
If you've lived here a while, you know the parts of town to avoid. Take your time, try not to fall in love with a house too soon there are many things that can go wrong. Look at plenty of places, get a realtor to help. Good luck

 

 COMMENT 477014 agree helpful negative off topic

2013-12-13 02:20 PM

I like the fact that my taxes went way down when I bought. A lot of my money goes to the bank and I know they have rooms full of accountants telling them how to minimize their tax bill.

So very little of the stupid stuff our federal government does is actually funded by me. Who knew the best thing a libertarian could do was to buy a house?

 

 COMMENT 477017 agree helpful negative off topic

2013-12-13 02:26 PM

946 here. Payment on a $300K mortgage ($375K-$75K down pmt) 4.25%, 30 year fixed loan payment per month only $1433.00 taxes and insurance extra

 

 COMMENT 477028P agree helpful negative off topic

2013-12-13 03:05 PM

The giver of a gift pays the taxes (if any). The recipient of a gift does not pay tax on that money.

If the money is inherited, generally, the estate pays the taxes (if any). The exception is if it is an inherited IRA or 401K-type of fund that had not been taxed previously.

Your issue with the gift would be with the lender, not the IRS or FTB. Lenders calculate terms of the loan differently when it's not all "your money."

Some condo groups here do have atrociously high monthly fees and then special assessments on top of that. Ask for the annual rate of increase in dues; the history of special assessments within the past five to ten years; the forecast of anticipated capital improvements/repairs that result in special assessments.

 

 COMMENT 477029 agree helpful negative off topic

2013-12-13 03:07 PM

Check out City and County housing and get on their lists. That is how I was able to afford a place in SB in an excellent school district for my kids.

 

 COMMENT 477034 agree helpful negative off topic

2013-12-13 03:13 PM

477001; common misconception regarding the GIFT tax. They will not be taxed on the gift amount. The GIFTER is the only one who would potentially pay tax (I know, doesn't make sense), but this is only if they have already given away the amount over their lifetime gift amount. The giver will have to file a gift tax return on the amount over the $13k or whatever the current exempt annual gift amount is, but they will only start paying tax on their givings once they have reached the IRS cap, which is in the millions. It's a non issue for most of us. Your entire $75k will be able to be used tax free. Also, consider the $10k penalty free amount you can take from your IRA for a down payment for each individual... This is what we did and I wouldn't want to live anywhere else.

 

 COMMENT 477044 agree helpful negative off topic

2013-12-13 03:35 PM

OP here again. For all of you suggesting we move out of state, we have considered it. Our original plan was to go to Portland, Denver or Seattle (all places we have been and love). Job security and a career opportunity for me changed all that in the last year. For the next 3 years at least, I plan on staying at my current company. My promotion and job change was something I had been working towards for a while and something I hoped to attain before 30 (I set my goals in college like we sometimes tend to do...and most of those don't work out haha!) We do live here and were both born in SB. He was raised here. I was raised more towards Southern California. Our family is here for both of us making it hard for us to leave. We are young and although intelligent and educated, we are completely in the dark about all of this right now. Do many of you regret staying in SB? That is my ultimate worry. I appreciate all the thoughtful responses.

 

 COMMENT 477049P agree helpful negative off topic

2013-12-13 03:47 PM

I would invest at least half into the stock market. I've made a 40% return with my investents in the last 2 years.

 

 COMMENT 477050P agree helpful negative off topic

2013-12-13 03:48 PM

I agree with those who said meet the neighbors. Pay attention especially to how many rentals are on the street. 20+ years ago we bought a nice house in a Goleta cul-de-sac, but didn't realize that about 1/2 of the houses in the cul-de-sac were rentals -- one of the houses had added on over the garage, so there were a bunch of students, all with loud cars, living there. After they moved out, a drug dealer moved in (I heard the police come looking for him a few times). After he moved out, a very loud family moved in. It wasn't until that house sold that we finally got some quiet neighbors (also renters, but the new owner is much more careful about who he rents to).

Good luck!

 

 COMMENT 477053P agree helpful negative off topic

2013-12-13 03:54 PM

Good luck to you. Years ago I bought cheap and slowly over the years improved things and built up while paying it off. I have never regretted it. I did the work when I could afford it, and now I have a property that at the very least should see me into a comfortable old age when I choose to sell it. The upside of paying the SB prices is that it's entirely possible that you can recoup all or most of it. And if not, you can just enjoy living where you choose as you make it more to your liking.

 

 COMMENT 477056 agree helpful negative off topic

2013-12-13 04:03 PM

I am a Realtor and you should start with a good lender........... Or you're just sort of waisting time trying to hit an ever changing and moving target. Get your facts from professionals only, guidelines change like the tides. Gifting cash is not a problem with documentation. Don't be in a rush with the purchase and remember you're making a business decision, not one based on emotion which is very easy to do being a first time buyer. I would give you a few lender names but it just seems like strange place to do it. Good luck.

 

 COMMENT 477061 agree helpful negative off topic

2013-12-13 04:49 PM

OP, if your families are here and you plan on having kids, I say stay here. If you moved to Oregon, Colorado or Washington, you will ALWAYS think about Santa Barbara (especially when it's been raining or snowing for days ;-). There are few places like SB/Goleta. Again, I think staying close to family you will find is very important. No matter how crazy they tend to drive most of us!

 

 COMMENT 477062P agree helpful negative off topic

2013-12-13 04:51 PM

Find a realtor you like - you'll be riding around a lot together. Educate yourself on valuation by making lots of comparisons, even stuff that's not in you range. Get pre-qualified with a lender. That will let you begin your reality check. Calculate total costs of the deal with mortgage, taxes, utilities, maintenance, etc. and the recurring monthly hit you can comfortably take. Are you DIY types or do you need to have it all done for you? If the latter, maybe think condo and dues instead of SFD. Leave yourself a cash cushion for surprises or an economic downturn so you don't risk your dream either way. Fixer upper stuff will cost more than you think. Look for cosmetics covering structural flaws; hire a good inspector (including lateral lines, chimneys, etc.) as soon as you see something you want. You can buy a warranty that covers most interior systems down to leaky faucets, but you'll still pay for service calls and upgrades. Be prepared to act quickly since the bidding process can be both competitive and nasty. Cash buyers/investors beat out the nicest home hunters relying on loans. Hang out in the neighborhood - watch and listen around the clock. Meet the neighbors, and their kids. Check the crime stats and look for burglar bars. Walk the area and get a feel. Some of the more modest parts of town offer a great lifestyle.

 

 COMMENT 477067 agree helpful negative off topic

2013-12-13 05:02 PM

Probably best comments so far are the get pre qualified 1st ones, until then it hard to give any suggestions until you actually have a idea of what you can spend. Once you have done that find a realtor you feel comfortable with. From your comments its worth noting since you are from here, if you buy and work takes you away from here you do have family and a network to take care of the property for you.

Best of luck in your search.

 

 COMMENT 477068 agree helpful negative off topic

2013-12-13 05:03 PM

There is competition for the good, well priced properties and it will help if you have something from the bank or lender saying how much you have "pre qualified" for. Yes to getting an agent you work well with; you may meet one at an open house, and seeing the open houses will help you get a feel for what things are going for, and what you do and do not want. No, I don't know anyone who is sorry they stayed here and bought a house, but I do know several people who sold and moved out of town, regretted it and wanted to come back but couldn't afford to buy here again. Good look and enjoy shopping.

 

 COMMENT 477086 agree helpful negative off topic

2013-12-13 05:58 PM

First piece of advice: Don't buy in SB/Goleta right now.

 

 COMMENT 477088 agree helpful negative off topic

2013-12-13 06:01 PM

Put it all on Bitcoin, and you can buy 10 homes here in a couple of years!

Bitcoin price is under $900 right now. There will be more buyers at $10,000 than there are at $1000.

 

 COMMENT 477095 agree helpful negative off topic

2013-12-13 06:14 PM

Think like the Europeans who live in smaller spaces and do just fine. I have a house in Portland (one of the places you've considered) and while you can get MUCH more for your money and the job opportunities are better, if your family is here and you're both from here, I'd stick it out since there's no better place. Condo fees aren't necessarily that high when you factor in what they cover. Also, since your price point is lower you may not get lots of attention from a realtor. I'd still get one but look at new listings every morning on the realtor dot com or village sites since they go fast. Also, better to rent if you think you may move within 3 years.

 

 COMMENT 477097 agree helpful negative off topic

2013-12-13 06:19 PM

ok here is some real advice: 1. look around yourself and find the place you want without a realtor. Then work with the sellers realtor: and ask for a discount on the reality fee.. Realtors get paid 3% on both ends of the transaction. On a 400,000 house that is 12,000 of your money for selling and 12,000 for buying..simply for putting together paperwork and driving you around. Dont pay it. The lender is responsible for getting that paperwork right. The underwriter is responsible for that part...a realtor does very little and nets a huge commission, and so you can have the selling realtor do it..because they want the sale.
2. Always purchase the warrantee, no matter what.
3. Be certain you can insure your house for flood, earthquake, fire, weather catastrophe. Dont purchase an uninsurable home.
4. Talk to neighbors about the area, ask who is noisy, what are weird sounds-like helicoptors near cottage hospital, or flight paths, visit the house multiple times at different times of day, and listen. Look to see who is around, pay attention. I almost bought a home on Walnut Place, the realtor swore it was not in a flight path-and on one of my random visits a plane flew so low I waved to the pilot.
5. turn on every faucet, sprinkler, watch the electric meter, flush toilets, run diswashers...try every outlet do everything you can before you offer....
6. Get a very thorough inspection. This will also help with insurance.
7.Try to avoid giving a large deposit. 8. Do not purchase a house that you cannot afford. 9. If you plan to move in the next 5 years, do not buy-it is not worth it in terms of taxes, and the costs of buying and selling

 

 COMMENT 477100 agree helpful negative off topic

2013-12-13 06:23 PM

Sorry- one more thing. Double app for the loan. I was pre qualified by Bank of America for my first house, I had all docs in order, everything...and on the day it was to close-they pulled out. No reason. Fortunately, I had double apped- and Home Savings of America-lender Craig Green immediately pushed the back up loan, and it closed the same day. If at all possible cover yourself even if pre qualified. I would have lost that house if I hadnt double apped.

 

 COMMENT 477105 agree helpful negative off topic

2013-12-13 06:36 PM

Consider moving to Texas and buying a really nice big home in a gated community compared to an 2 bedroom condo or mobile home for about the same price here.

 

 COMMENT 477107 agree helpful negative off topic

2013-12-13 06:49 PM

No one in the industry will admit it--but the market is circling the drain and ready for another dive. I'd save your money for now.
I'm ready to buy (not here) but I'm holding on for now.

 

 COMMENT 477109 agree helpful negative off topic

2013-12-13 06:57 PM

Don't buy anywhere with a HOA. My motto is "Never again."
Lots of people will tell you horror stories and many HOA are also very expensive.

 

 COMMENT 477121 agree helpful negative off topic

2013-12-13 07:41 PM

MILLY, please define #8. What is a house you cannot afford? Some would say if you have to get a mortgage at all then you can't afford it.

 

 COMMENT 477138P agree helpful negative off topic

2013-12-13 09:01 PM

You just got a raise. Congratulations! You are excited! Great! Go out and splurge on a nice dinner, but don't blow your wad just yet. Wait until the spring, gather more dash, get pre-qualified, etc. there will be more on the market by then. Take it from someone who bought at the peak of the market 8 years ago.

 

 COMMENT 477139P agree helpful negative off topic

2013-12-13 09:02 PM

More cash. Not 'gather more dash'.

 

 SANDYINSB agree helpful negative off topic

2013-12-14 06:58 AM

Congratulations. You are asking great questions. Ask your friends, bosses, parents, anyone local that you trust for the name of a good Realtor AND a good Loan Officer.

You need to get pre-qualified for a mortgage loan before you look at houses.

You can buy a house with as little as 3 1/2% down under FHA. (Max loan is $625000 effective 1/1/14). If you go FHA all of the down payment can come as a gift. The problem wit FHA is that the mortgage insurance stays on for the life of the loan - and it is expensive - much more expensive than conventional financing.

If you go conventional, you must have 5% down of your own money and the rest can come as a gift. You'll need to put a minimum of 10% down if your loan amount is over $417,000. (which it probably will be in Santa Barbara). If you don't have 5% down of your own funds, put this money in the bank and let it "season" for three months. You need to provide 2 months bank statements with no unexplained large deposits.

You'll qualify for payments based on income, and I would suggest that you buy the largest house you can qualify for. (I don't make that recommendation to everyone - but you're young and your income will go up. You'll grow into the house payment).

Don't get into a starter condo for a couple years - because you may be priced out of the housing market when you are ready to buy up.

This is an exciting time. Enjoy the process. Learn a lot!

 

 COMMENT 477172 agree helpful negative off topic

2013-12-14 07:16 AM

Op, we bought a Mesa condo in '98 (regret not being more aggressive back then), upper westside starter home in 2000, then a larger San Roque home in '09. We've made $550k in equity. We were very fortunate on our timing and did a lot of cosmetic renovation along the way. So, no regrets but we have friends whose timing was not as good. Also, a very large portion of our income goes toward retirement, housing, and taxes. (Btw, Property tax is $1k per $100k of house). When you see facebook friends taking fabulous vacations or sending their kids to private schools or wonderfully funded public schools, it hurts a little bit. :) Get yourself some ugly in a good school district while rates are low! It's likely to be a good investment in the long run and your family is here. Good luck!

 

 COMMENT 477179 agree helpful negative off topic

2013-12-14 07:38 AM

You may want to check with the Coastal Housing Partnership (you can Google them). If your employer is a member you may be eligible for some discounts.

 

 COMMENT 477188 agree helpful negative off topic

2013-12-14 08:09 AM

The most important thing in this current market is budget. The fact that you can manage to buy the home you want isn't enough. Make sure that your monthly budget will support the purchase. That is, not just the monthly mortgage payments and property taxes, but try to calculate what it will take to maintain and run the household. e.g. utilities, repairs, maintenance, etc. The biggest mistake first time buyers make is that they get caught up in the purchase price and scrape together enough money but fail to account for the regular monthly expenses and often wind up miserable while struggling to make ends meet in the "dream home" they purchased.

 

 COMMENT 477189 agree helpful negative off topic

2013-12-14 08:10 AM

Yes don't buy here, it's overrated over priced and not worth the money...

 

 COMMENT 477209 agree helpful negative off topic

2013-12-14 09:04 AM

once you purchase your home, start adding in $200 with your payment, you will be surprised who much time it takes off the loan. Our 30yr loan was done in 15 years.

 

 LUCKY 777 agree helpful negative off topic

2013-12-14 09:12 AM

For those who tell you to leave town and buy elsewhere, well, let THEM do it. I ended up forced to buy a house in 1998 because I was evicted by the "seismic retrofitting" of my rental residence and no one would rent to me with 2 dogs. I NEVER thought I could buy a house in SB, but I did it by the skin of my teeth, and it is a wonderful thing. The BEST advice I got was to do all the major necessary repairs and renovations BEFORE I moved in, so I spent much money and rebuilt the 1948 house for 6 months. Then I moved into it with all new electrical and plumbing and also added wall insulation. So factor in the money that'll be necessary to do the things you require to make it YOUR home. If you say you'll do it "someday" when you can afford it that'll mean you live in a jobsite for years. But have good heart, being able to stay in the place you love, priceless!

 

 COMMENT 477236 agree helpful negative off topic

2013-12-14 10:40 AM

If you buy now in the SB area, put aside some money to buy a long snorkel - there's a very good chance you'll be underwater for a very long time when the current seller's market collapses again. Unless, of course, you know what the future holds for you and you never plan to move from your first home...

 

 COMMENT 477260 agree helpful negative off topic

2013-12-14 11:50 AM

Milly You are so wrong about your information. Please speak with professionals, it's a big decision. It's funny that people buy a house once and they think they're a pro.

 

 COMMENT 477262 agree helpful negative off topic

2013-12-14 11:54 AM

I second the notion that you move OUT of the area... you can get SOO much more just south of here!

 

 DOG MOM agree helpful negative off topic

2013-12-14 03:04 PM

Lots of useful advice and I agree with Lucky 777, among other posters.

Be cautious about HOA's financial stability...An older complex tends to have increasing costs for the structural maintenance. Walk the entire property with someone familiar with structural maintenance to check the level of upkeep of a HOA property...a unit you are looking at may look good (paint and staging!) but the property in general may be very neglected and indicate future (near or far) expensive assessments or increase in HOA business dues to pay for them. And try to meet some other current residents to get a feel for the cohesiveness of the neighborhood. HOA's boards can increase the monthly dues 20% a year by state law, without the owner member's vote, unlike Special Assessments that require more than 50% of the owner member's YES vote to pass. The HOA is responsible for maintenance as per their CC&R's, some excluding items like mold damage, termite damage control, and reviewing their most recent Reserve Study (Property Manager would have this but I do not know how accessible it is to non owners, let alone owners that are not on the board),the last 3 years of operating budgets, as well as reading a few years of Association Newsletters.
It can be difficult try to get others sharing your common walls to agree to tent a seriously infested structure,settling on spot treatment due to lack of agreement with neighbors that hopefully you can get along with. Common walls can put a damper on a sense of any privacy so be careful in choosing which walls are the common ones at HOA properties without all the structures as single buildings.

Put the $75K away while you look and think about it for awhile. A home has post purchase costs after moving in..do as Lucky 777 advises and fix a place up first on the items a qualified Home Inspector recommends. One former resident at the HOA I am at had taken out an appliance warranty before moving in and had a use for it the first year when the forced air gas furnace died ($5-6K saving to his family). Consider only a single story structure. Check out the neighborhood at various hours of the day and days of the week. Being next to train tracks, freeway, certain areas with noise or air quality issues will not help an appraisal value (related to lending issue).
Be a good steward of this gift, enjoy the looking and dreaming and do all the homework before making the decision.

 

 COMMENT 477372 agree helpful negative off topic

2013-12-14 05:57 PM

We have lived in our neighborhood for 10 years and a little over a year ago Dario Pini bought the place next door. He rented it out to a bunch of students, and up until now things have been pretty mellow. However, today I look out my 2nd floor kitchen to see two college kids sitting on lawn chars on the roof, drinking and smoking a large bong in the middle of the day. I call dispatch, they say they will send someone out....and then call back to say it is not enforceable and they won't be sending anyone out. Seriously? I finally went out to our deck and yelled at these kids telling them that I'd appreciate if they took their marijuana smoking inside and that they needed to respect the fact that there are a lot of impressionable kids in the neighborhood. So I echo checking out your neighbors, though it didn't help us in this situation.

 

 COMMENT 477390 agree helpful negative off topic

2013-12-14 06:42 PM

260-LOL not too specific on your criticism....bet you are somehow in the real estate field , 121-banks will qualify people for loans that they can currently afford, at a lower teaser rate, and then raise the mortgage a few years in..that is what I mean by #8. Buy what you can afford.

 

 COMMENT 477637 agree helpful negative off topic

2013-12-15 07:58 PM

Well the obviously ridiculous advice aside, there is one thread in all these responses that I would wholeheartedly disagree with. That would be those who say not to buy now. Sure, it would have been better if you'd bought a year ago, even 6 mos ago, but the fact is that prices/values are increasing faster than you can possibly save or grow most investments. If you wait a year you'll be in a worse situation even though you'll have more money to put down because the prices out-paced you. Estimates are a 12-15% increase in the next 12 mos. Buy now, buy whatever you can afford, but buy it as soon as you can

 

 COMMENT 477694 agree helpful negative off topic

2013-12-16 08:47 AM

I agree with 637 and so does local economist as well as UCSB economist. Too many armchair quarterbacks in this game. Seek professional advice, and by all means don't have the listing agent represent you as a buyer.

 

22% of comments on this page were made by Edhat Community Members.

 

*** One comment was removed from this thread by the Edhat Board Nanny for violating Edhat Comments Board policy. Click Here to see it.

 

Add Your Comments

Edhat Username

password (email)

Comment

Don't have an Account?

Don't know if you have an account?

Don't remember your account info?

CLICK HERE


ENJOY HAPPY HOUR! ... Between 4:00pm & 5:00pm only happy comment are allowed on the Edhat Comments Board.

If you can't say something nice, don't say nothing at all.

 
Hide Your Handle, but show paid status (paid subscribers only)
NEW - use verified name and picture (contact ed@edhat.com to be verified)
Find out About Becoming A Paid Subscriber
NOTE: We are testing a new Comment Preview Page. You must hit OK on the next page to have your comment go live. Send Feedback to ed@edhat.com.
 

get a handle   |  lost handle

 

EDHAT COMMENTS POLICY

 

  See more articles like this

# # # #

 

Send this article to a friend
Your Email  
Friend's Email  


[ easy-to-print version of this page ]

 

 

  Home Subscribe FAQ Jobs Contact copyright © 2003-2011  
Edhat, Inc.