REAL ESTATES FORUM

I am a high school teacher, making approximately $50,000/yr in Bay
Area. It is very difficult for me to purchase a condo. However, I
am still interested in the real estate and like to purchase a condo in
the near future. I think the price is approximlately $350,000.

Any first time home buyer programs here in Califonria? Any downpayment
assistances? Anyboyd use those before? I did my research and found
out the Calfha. Anybody out there using this? Any catch?

The first time homebuyer program for teacher is not working for me. I
am working in the city of Santa Clara and would like to purchase a
condo in Northern San Jose.

Any inputs will be deeply apprecaiate.

In article
,
Alice wrote:


You would be nuts to consider this property. Even if you could
get approved, the payments on a reasonable 30 year mortgage at
a good interest rate (6.5%) would result in payments of $2,212
per month. Lets say you get the same tax rate that I do here
in Minnesota, which adds on $183 per month. Then you have
commons fees. I dont know what your fees are, but my townhouse
fee is $210 per month. Then add in your insurance plan. Mine
costs $450 a year, which is $38 per month (the condo insurance
only covers the building and common areas, not your personal
liability, contents, or improvements). I get a total of
$2643 per month just to walk into the door. That is no
utilities, no heat, no A/C, no water, etc.

You say you make about $50K per year. I assume that is gross
before taxes. That is $1000 per week. After taxes, you
probably bring in $800 a week. Times 4, that is $3200 a
month.

Do the math -- subtract your $2643 condo from your $3200
income, and you are left with $350 a month. That $350 has
to cover electricity, gas, heat, A/C, water, sewer, and
all the other costs associated with owning a home. In
addition, you have to use what is left to eat and for your
personal care items. And if you use a car, you have to
add that in.

Now then, what happens when the condo building needs a new
roof or has to replace some rotting windows? They come up with
a total cost, divide it into N shares, with each unit owner
paying one share. What happens in your case if the condo
association sends you a special project bill for $4500 as
your share to replace the roof? You dont have it, and it
would take years to earn it even if you could spare the
extra $50 per month to save for the bill.

The net-net is that no lender should allow you to buy a home
where it costs 3/4 of your take-home pay. In fact, the standard
ratios are 28% and 38%. You can pay no more than 28% of your
income for a home, and your home plus all other debt. Assuming
that you have no other debt, the most that you can afford for
a house is $110,000.

If you cannot find a house in your area for $110,000, that
means one of three things:

1. you are not home-owner material.

2. you need to be looking at moving to a place where you
can afford to buy a home.

3. you need to add a partner to your life who can fill in
the missing financial part for you to get a home.

Sorry to give you the bad news, but that is better than making
a huge mistake, and then having to live with the consequences
for the rest of your life.

-john-

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John A. Weeks III