Financing in Malibu>Question Details

Scott, Other/Just Looking in Malibu, CA

I live in California. I make about 50k per year. I can build here cheaper than buying. I have A Credit. 1 sma

Asked by Scott, Malibu, CA Wed Dec 5, 2007

all car loan. Many trades all current. How hard is it to get a construction loan and land loan for a total of 400k? What if I have a co signer? Just putting a house on the property I am looking at should immediately be worth 600k. And I am a first time buyer. Any thoughts or suggestions? Is it possible to get a interest only loan for the first few years at a reasonable rate of 6% or so? Am I just way out of my realm? I already have 2 roommates who will pay $800 each. The house is a 3 bedroom.

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Diary Of A Real Estate Rookie’s answer
You are indeed way out of your realm.

If you make $50K a year, you shouldn't borrow $400K, even if you can find a lender who would offer it to you.

Even with eager potential roommates, your co-signer would have to front you around $200K for this to even been in the realm of risks that are worth considering.

Alison Rogers
author, "Diary of a Real Estate Rookie"
http://tinyurl.com/2ag28z
Web Reference: http://tinyurl.com/2ag28z
1 vote Thank Flag Link Wed Dec 5, 2007
Scott, A good rule of thumb is to never purchase a house if you cannot afford the payments on your salary alone. It's great that you have 2 roommates now, but what if they decide to get their own place? disagreement? You are taking the right steps to ask before you react. Next step is for you to speak to a mortgage lender, get pre-approved based on your own income and stay within your budget.

A good mortgage lender will not let you do an ARM loan nor an interest only. Interest only loans are for people that are expecting to cash in on something big in the near future.. are you? may be expecting a hefty inheritance? or other?
1 vote Thank Flag Link Wed Dec 5, 2007
It just isn't that simple. Just getting a permit in Malibu is ridiculouly expensive with geology, soils and water and septic tank viability plus a plot plan. Then there is the Coastal Commission. I notice that even Dwell Magazine couldn't get a house started in Topanga. On your salary you would end up broke and possibly in debt for nothing. Think twice, no make that four or five times. And I might mention that the realtors do not help with bad land (unbuildable). After a lot fails to qualify for building it is back on the market waiting for the next fool to come along. You would be a lot better of buying an already built condo in Los Angeles. After they cleaned me out I moved to Colorado. Azul
0 votes Thank Flag Link Thu Mar 5, 2009
Scott,
We'll be looking for your house for sale on trulia soon

then again
maybe not

anyways

good luck

just fun to look back at the good ole days
0 votes Thank Flag Link Mon Mar 24, 2008
Yes I am interested in cashing out in a year or two. As you know, you cant get a 1500 sqf house in Malibu for under 600k, so I belive it will imidiatly be worth that. If by any chance I did not want to cash out or found the market wouldnt support it, I would like to refi or restructure the loan to a fixed. But that time I will be making much more. And roommates will assist. But great advise and I am taking everyones opnion into full consideration. Thank you everyone!
0 votes Thank Flag Link Wed Dec 5, 2007
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