Thomas Monary

Hi Josh,
It sounds like you've already found a place if you've locked your loan rate.

I'm a little concerned about "No Points" loans. They usually have a higher rate, or become adjustables after 3, 5, or 7 years. If it's truly a no-points loan, you're 30 yr. fixed rate (locked a week or two ago) should be about 5.5%, with the Principal & Interest payment about $570 per $100k, plus tax & Insur.

Read your loan documents NOTE. Verbal explanations are negated by the written documents. So if they tell you "Yeah, sure. Its a fixed", (but only for the next 3 to 7 years), then you lose.
The market may not allow you to resell or refinance in 7 years. People who got 5 yr. ARMS in January 2004 thought they were OK, but are having a tough time quickly approaching in the next six months. If they can't handle the new payment and wish to move, they invariably must come up with $100,000 or ruin their credit in a short sale. The friendly and helpful Realtors and Loan Officers go unpunished. Buyer beware.
The worst part is, the 30/30 payment wasn't much more.

Write your Realtor and Loan Officer a memo. (You should ask both, in case one goes out of business.)

Ask point blank:
Is my loan is a 30/30 fixed, with the exact same payment for thirty years?
Could I please get a copy of my lock form?
Please respond in writing.
Thank you, Josh & ..."

While you're at it, you might ask what the payment would be if you paid one point, then compare the two.
Put their responses in a safe place.

With rates near record 40 year lows, I would avoid anything but a 30/30 fixed right now.
If your loan amount is $400k, and you pay one point, (plus escrow, title, etc.) your monthly P&I payment would be about $2,272. By contrast, if you get a "no points" loan, often the rate is 6.5% or more, or $2,528 / mo. So instead of paying 1% (1 point) in up front fees, you end up paying approx. 1% higher in interest every year, for the entire life of the loan. So if you have the loan for ten years, you pay about ten times as much in interest, than you would have in points.

Where to live is such a personal choice. The most important question might be "Are you retired?" If not, where will you be working? Unless you're retired or work from home, traffic here is tough. Temecula was suggested, but I suggest you view the 20 mile snail caravan on I-15 from 4 pm to 7 pm heading north before making that move. Same in the AM heading south.
School districts are very important to your buyers when you decide to sell, perhaps ten years from now. Most of the coastal districts are award winning, but are expensive areas, as you mentioned.
Poway is an area with lower crime and better school districts than most, and a couple of affordable neighborhoods. It also has a lot of our local sports figures as residents.
If you can afford a bit more, and patient enough for a good deal, Carmel Mountain Ranch, (Rancho Bernardo "South" or 92128), has some nicer and newer homes. Also nice shopping, and generally a better than average resale market, mostly due to all the postal employees. It has a bit more of a commute issue than Normal Heights or Clairemont.
I would choose either of those neighborhoods over Spring Valley. Spring Valley's resale market isn't as good as the other two, and is tougher to commute. Again, depending on where you'll be working.

Since the Internet, most frequent downtown stuff is now just the Padres or dining. Otherwise ask if you need to go there much. The other two areas are closer anyway, and also closer to all the other S.D. stuff. Balboa Park, Zoo, Sea World, Beaches, Old Town, Trolleys, Mission & Fashion Valley shopping, La Jolla, UTC shopping, ad infinitum. Places and Stuff you're more likely to do weekly, and use gas doing so.
If I never leave the house, and never plan to resell, I might consider Spring Valley. But even still, probably not. In today's market, you could probably find something nicer for just a bit more in La Mesa, or Santee, if you like that east county area.

Most important, what's your hurry?

Prices are still dropping by the month. (All the other responders, mostly realtors, just had heart attacks.) The risk you run is the interest rate rising. (It's up to 6.125% since you locked). But you might want to balance that with paying $40k too much.
I had two people approach me to help them find homes last year. I told them to wait a year. Neither listened. One bought a condo in Rancho Penasquitos, (Carmel Mt. Ranch's poor cousin across the freeway). They got a "great deal" for $375K. Today those sell for $280k. The other bought a house in Spring Valley for $350k. Last week his girlfriend found 3 there for $240k. She said they were all superior to his.

If you're not getting a great deal on a bank owned foreclosure, you can probably afford to wait at least a couple of months, and meanwhile, you can get to know the area better.

Best of luck, and welcome to San Diego. - Fri May 30 2008, 07:09