[Husker8877]

Have you ever owned a home before? Have you ever survived a Residential RE crash like in 1990-1996 California?

What lender in their right mind will lend you 100% on terms you quote?

First rule: NEVER EVER trust a mortgage broker!!! They pack more waffle-ability into their so-called "commitments" than Clark and Kerry combined.

Second Rule: If you are buying a home with no cash down, you are not buying a home, you are buying trouble at the very first hiccup in RE market. Mortgage brokers care only about whether or not they can ram a large loan down some naive lender's throat--not whether or not you can survive a touhh market or even 2-3 months income loss.

I'm a banker. I am not a residential mortgage lender, but I am well-versed in the many ways they can cause you terrible grief. Most of my clients (generally very sophisticated, experienced property owners) have at least one horror story to relate regarding mortgage lender scum (not ALL are scum, but so many are--the used-car salesman of 1995 is usually now the top-producing mortgage lender in most offices. Fresh meat, you know...)

Just BEWARE!

[ibbryn]

bumping so I can check in on daviddennis later

[Grim]

Woodland Hills is a better area of Los Angeles so you're ok there in terms of re-sale value. Remember, you generally want the least expensive house in the best area and not the other way around.

Pay for a professional appraisal to establish actual realistic value. If and when you make an offer be sure to make the sale "contingent" on a professional inspection.

If everything works out and you buy the home, you should be able, after one year of "seasoning" your mortages, to refinance the entire debt to something better than you're presently being offered. In fact, you might want to shop around for a better mortgage arrangement than the one you described.

Real estate values in California are bound to continue upward as there is a severe housing shortage.

[stumpy]

In the north end of L.A. County (near the community of Gorman) there is a 3500+ square foot house on 10 acres of land in an area of big trees that touches up against Angeles National Forest land. It was on the market for 425k. Located 15 minutes from I-5, and about 45 minutes from magic mountain theme park. Lots more house for the money.

[sergeantdave]

You're buying at the top of the California housing bubble. You could be stuck with a whopper mortgage payment and a declining home value. Ouch!

Then again, some lefty California judge could declare that all private property belongs to the state and you'll get to live there rent free, ala North Korea, with all the tree bark you can eat.

[Willie Green]

Move to another state.
ANY other state.
California is a trendsetter, and it'll be the first to collapse to Third World parity.
Try Tennessee. Cost of living remains relatively reasonable.
And the TVA gives reasonable assurance that you'll still have access to fresh water and electricity, something that can't be said for California.

[L,TOWM]

Similar position bump.

[taxcontrol]

Get educated

www.richdad.com
Read the first 4 books - then decide.

[Carry_Okie]

I agree with you about the desirability of Topanga and its propensity to appreciate. From your emotional statements, it sounds to me like you are committed to living there. Were I you in that case, I would save my money, bide my time, befriend a banker or realtor maintain a set-up for the financing and look for a repo.

Make sure your prospective neighbors are OK with brush clearing and such or you could be buying a death trap. I would be doing the homework on learning how to care for that kind of land properly, NOW. You might want to consult with the local Resource Conservation District, Fire Marshall, and/or a well-regarded arborist for a cheap education.

I hope you know where I stand on landscaping: if you are going to introduce a non-native plant, please be responsible and make sure it can't get out of control, even if you leave.

If you are buying a fixer, how skilled are you? Else will you be able to afford a $25,000 upgrade while making those payments? Otherwise, a $500,000 place sounds like its over your head, especially with a balloon payment in a time of higher interest rates. I'd get a combination of a conforming first and an equity line of credit. It's a lot of flexibility for the future. Pay down the equity line and save it for a rainy day.

[steveo]

self bump

[Pagey]

BUMP for later

[conservcalgal]

I've lived in So Cal my whole life and own 1 commerical property and 2 residentials in SD county - I'll give you my 2 cents.

My husband and I got into our first home 17 yrs ago with 5% down . It was a killer for us to buy a $150K home then, but now it's worth $500K. I bought a brand new home just 13 months ago (basically 0 down again) and it has gone up $125K. Quick jump to the latest with my properties, the commercial property (landlord selling so we quickly borrowed small down payment) that I purchased 5 years ago is paid off thanks to some refi's. The plan we have for our retirement is to sell the new house around '08 (just before the possible Hillary factor), pay off the smaller home, and retire there. We will use the commerical property as monthly income.

I'm sure some can name bad times in real estate (the early 90's had a few years of decreasing values), but they went back up and have gone up on the average 10-15% every year since.

I don't know if my experience will help, good luck!

[TomAdkinsCC]

David-

Just wanted to drop you a line.
I am a Real Estate agent in Philadelphia, and I'm happy to offer some good advice.

THE HOUSE
First, nobody can tell you what is a good deal or a bad deal. Real estate is local, and unless you have someone who knows your specific area, their home advice is useless.

THE MORTGAGE
Second, DO NOT get an amortized loan. They are a waste of money. Paying principle is foolish. Instead, get an interest-only loan. You pay interest, but no principle.
Why?
1-Because paying principle doesn't change the value of the home.
2-You must weigh paying off the home vs. investing the money.
If you have a 401k, you'll get matching funds, with the same tax break.
If you have a self-employed IRA, you can stash a boatload of money into it.
You can't pick a better time to invest. The market is poised to make a screaming recovery.

AND...it's also a great time to invest into real estate as well. With extra money, yoiu can.

ALSO- If you have ANY OTHER DEBT- You can use that extra money to pay it off.
Car loans, credit cards, school ooans, etc.
And remember, they are NOT deductible. Home loans are.
Paying off debt is WAY smarter than paying off principle.

NOTE- ALWAYS put your money where it gets the highest return.
If your mortgage is at, say, 5.5% and you are in the 28% bracket, your NET interest is 3.96%. If you invest into the market, you should easily beat that over time.
PLUS- It's almost always a better rate than the cost of your debt. Better to pay off debt than to pay off principle.

SUMMARY
Paying your home off early must always be balanced with how much you could earn by investing the difference or paying off debt.
Take that money that WOULD have been principle, and invest it instead. Long before 30 years gets here, you'll have enough to pay off the mortgage and have a ton of money left over.

BEST INTEREST-ONLY LOANS OUT THERE?
HOMESTAR Check out their 6 MO ARM, tied to the LIBOR.

INTERESTING POINT- Normally, points are foolish.
But this loan allows you to pay points that buy down rate AND margin.
2 pts drops the margin from 2.25 to 1.5% over the LIBOR
That is sweet. You get the points back in 2 yrs and always have a great rate.

TOM ADKINS