01-11-2013 02:47 PM
Long time lurker, first time poster. I've been looking to buy myself a house in LA for the past 10 years or so, and I can't seem to figure out what neighborhood I want to live in and in what price range I should be looking. Here's a bit of my background:
* I work in West LA / Santa Monica and make around $100K in the tech industry
* My partner currently works in Hollywood and makes around $45K now, but will likely soon find a job as an RN hopefully making closer to $65K. He could probably work in any location.
* I have about $200K saved, but probably only want to spend about $100K on a downpayment
* We don't have much in terms of car payments and other debt
* We are gay, early 30's
* We're kind of boring in that we don't go out to clubs or anything
* We like going to movies, out to eat (not fancy restaurants), shopping
Areas we've considered: Woodland Hills, Granada Hills, Burbank, Glendale, Pasadena, Alhambra, Monterey Park, Windsor Park-View Park
We would prefer to live in a neighborhood that is more middle to upper-middle class, culturally diverse (i.e. not one culture dominates), and generally safe. We haven't seemed to find the perfect neighborhood in LA yet and not sure if it really exists.
Thanks in advance for any advice you might have!
01-11-2013 08:00 PM - edited 01-11-2013 08:01 PM
Based on your requirements and list, Alhambra and Monterey Park are out because they are pretty much a Chinese dominated community imho.
01-11-2013 08:30 PM
If you are working in West LA I'd suggest the Valley. Possibly Studio City or Sherman Oaks. There are some starter homes in those neighborhoods for $500,000. If you want to spend a little less then look in Encino (north of the Blvd).
Burbank also has decent prices and good schools (not sure if you are planning on having children).
I would stay away from the San Gabriel Valley, unless you large willing to have a long commute.
The amount you are comfortable (not how high a lender says you can go) is most important when deciding on a price range. The old basic rule is 33% of your income can be on housing, but with LA prices, many people go much higher.
01-12-2013 11:35 AM
A couple other important pieces of information are what size house you want (2 BR? 3 BR? 4 BR?) and whether you are planning on having kids at some point.
I would say that Studio City to West LA/Santa Monica is too long a commute (Sherman Oaks or Encino would work better), but that depends on your work hours and your personal tolerance for driving/traffic.
01-12-2013 02:54 PM
Before anything of the above, you know, love and money don't get along soooo many times, ask me about it. So, if you guys as a couple are going to buy anything that high as a home, you need to talk to a lawyer so when things get sour, you can part your ways without any legal fight. Since you guys are not married (I think), buying a home is not like a couple buying a home where the husband and wife thing is understandable and if one dies the other takes responsibility according to the law, and so on.
I hope I didn't insult you in any shape or performance but is worth it to talk to a lawyer so you guys can decide how to take possession of a property as partners or whatever he indicates.
Also, remember, since you can't buy all cash, your income and your partner's income has to be a qualifying one. Changing jobs prior to getting a loan is "buying a home" killer. So many things you need to investigate.
I am telling all of the above by experience because mi wife is making the money, I had to step aside in order for her to qualify to get a loan. I am telling you, it gets complicated and frustrating if you don't do your homework first.
By the way, a Realtor can't help you with choosing the way you can take possession on a home because by law he can't, but he can help you to find it. So, talk to an attorney before you do anything, of course, after you check your credit worthiness that will make you able to get a loan.
Good luck in your endeavor.
01-13-2013 12:20 AM
Thank you all so much for taking the time to respond. I'll try to address some of the points you guys have made.
In terms of budget, I've heard various "rules" of what one should spend, but I can't ever seem to figure out what they mean exactly. Depending on what rule I use, it seems that I can afford a house anywhere from about $400K to $500K based on my income only (more on this later):
1. "Spend 33% of your income" - Does this mean 33% of your take home pay? So say I bring in $5400/mo in my paychecks after taxes, etc. Does this mean our PITI should be $1800, or just principal+interest? Assuming a 30-year fixed loan and 20% down, how much would the house price be? I've also heard of other percentages besides 33%, like 28%, 25%, etc.
2. "Spend 4 times gross income" - If I make around $100K, I'm guessing this rule is telling me to buy a house for around $400K.
Another question (sorry if it's a dumb one): I've tried using online calculators and they always have a field for monthly debt payments which include credit card debt. If I pay my credit card bill in full every month, do I not have any credit card debt or is the amount I charge to my card my credit card debt? This makes a big difference in the amount I can borrow (usually changes from $300K to $400K).
So the reason I only used my income to figure out the budget calculations above kind of relates to what buyinghouse mentioned (and no offense taken). Basically, I wanted to have the house in my name only to keep things less complicated. Since I'm contributing the down payment and my job history is more stable, it made sense to us for my name to be on the mortgage and he contribute "rent". However, if on my salary alone I can afford only a $400K house (based on #2 above), I would rather he cosign so we can afford a bit more since $400K doesn't get you much nowadays. If my calculations are off and I can afford a house closer to $500K, I think we'd prefer to just have my name on the house.
My partner and I have been together for 8 years now and are practically married, if not legally. In other words, it sure seems like we're in it for the long haul, but I also know that you can never predict the future. Thanks buyinghouse for bringing up some issues that I hadn't thought about previously. Guess we need to make sure that the possession of property stuff is all straightened out (pun intended).
Maybe Nanomug is right and I just need to meet with a mortgage loan officer to really nail down how much we can afford, but I have a healthy distrust of anyone real estate industry related (sorry, no offense) and trust the opinions of random internet people better.
I'll address the location questions in a separate post since this one is already pretty lengthy (sorry!)
01-13-2013 11:24 AM
You should buy in west Hollywood that's where all the gays live
Did you miss the part about "culturally diverse". Forget about rules and choose a house you like. You can qualify for a loan in which the payment is 38% of your gross income and total debt to income ratio is 43%. It looks like you are going to be well under that. If your partner goes in with the home purchase you can include his income. That will leave you with enough money for expenses and money for dining out, etc.