Sunday, April 29, 2007

Premature Escrowization

We changed our minds. And the bank declined our offer. In that order. Sorry, folks. I know we got everyones hopes up, and now I am eating my hat because of all complaining I did about the annoyances of apartment living in the last post. We are still looking and open, but a monthly payment quote from the lender was so shocking that we had to sit down and really think. With condo association fees($315!), property taxes, mortgage insurance, homeowners insurance, and the actual mortgage, the payments would be $3200 a month. And this is on the cheapest, littlest, beat up old condos in foreclosure. Most nice new condos are starting at $600,000, and houses start at $750,000. We could do the $3200, but we would have not much money left over each month. No trips, no dinners out, no new shoes, no art supplies, no yoga classes, no funky neighborhood. Jeesh, why is it all so difficult? Why can't I be making more money?
So we will wait and hold out for a place that we can't live without. And hopefully prices will go down to at least $300K (please!), and in the mean time we will save all that extra dough that we would have been spending on the condo, and in 5 years we will have over $120,000, which will be a small downpayment for something then. So we are very happy either way.
What would you do in this situation?

5 comments:

Dave said...

Here's my suggestion.....screw L.A. and move to Denver. Can Mark telecommute?
We are both really sorry and shocked after reading your post, Joy. That really stinks. But you do make some very good $$ points. If you can actually save the money that you would have been putting into the new place, you could end up with a huge chunk for a down payment that will give you more leverage. And given that most of the country is being hit so hard in the real estate market, you could stand to make a serious gain down the road. In the meantime with all that extra cash floating around, come on over to Denver for a visit. Soon!

MOM said...

We are so sorry about the condo, but there will be another, better one for you in the future.
Do as Dave says, go to Denver for a
visit. Guess you'll be back on the east coast pretty soon, too.
Can't wait,
Our love to you both.

Your Mom and Boo

ks1k said...

With a six-figure mortgage and 3k+ payments it is a big step. Much better to have a BIG down payment and work from there.

We know how much you want your own place. The right situation will come along and you will know when the time is right.

Have a good trip to NC and FL and just enjoy the moment.

OLD DAD

saffry said...

I'm sure you made the smart move. Because on top of the $3200 you'd have maintenance expenses, and you don't want to risk overextending yourself. That's what happened to us in D.C, with almost $1500 a month on the mortgage, we couldn't afford daycare for two on top of that. Hence, the move to NY.

Remember, that all signs are pointing to a big correction in the housing market in places like L.A. All those folks with interest only mortgages are going to have to sell soon, and people are going to stop speculating on houses to "flip" them, which has probably been driving up prices on starter homes.

If you wait, you may luck into a buyers market, and it will ease your mind a lot to know you aren't in over your head. Or worse, owing more money to the bank than your house is worth because prices have dropped.

Can you tell I'm still nervous about buying a house? And still have leftover stress from the last year in D.C. when we were borrowing from Peter to pay Paul? Enjoy your easy to clean and maintain condo, and come visit me if you want to see some of the thrills of homeownership. I'll show you the big crack in the foundation to cheer you up!

Dave said...

hey, how are you guys doing with the fires so close?
get our the hose!
sad about the big park that is burning.