Lynn Robertson

Hello Noshaba,

If you like doing house and yard maintenance then a single family residence would be a great first time home for you. However, if you prefer to have someone else, i.e. a Home Owners Association (HOA) tend to the yard and exterior maintenance then you might consider purchasing a condo.

With a condo you will have Home Owner Association fees, yet these fees generally include home owner insurance which you pay on a single family home too. Other HOA fees are usually water, garbage, sewer, and sometimes cable, as well as a fund for maintenance of the property.

When you talk with your lender have them work the PITI (Principal, Interest, Taxes, and Insurance) for you on a single family residence at the price for which you qualify, and then have them work out the PIT and HOA as well and you'll see what price makes you the most comfortable and if the extra HOA fees make it worth your while to invest in the condo.

Keep in mind, however, that the inside of the condo is generally your responsibility, so if a faucet drips or an outlet malfunctions, you might still be responsible for those repairs.

Good luck to you! - Sun Nov 4 2007, 14:47

Hi Tracy,

Many mortgages with 5% down do require MI (Mortgage Insurance) but there are a few ways around it. It's true that a couple of months ago loans were being pulled off the market quickly, especially those that had favored buyers with less then 20% down. However, those loans are coming back and by doing an 80/15/5 (First note is 80%, second is 15%, buyer puts down 5%) you can avoid MI altogether. I recently had a buyer qualified by two different lenders doing an 80/20 and no MI. In fact, we are in contract now.

However, if you find for some reason that you don't qualify for those programs, you can sometimes prepay MI and avoid paying it on a monthly bases. I sold a home about 2 months ago and we asked the seller to pay $3000 in buyers prepaids which we used to prepay the MI, saving a few hundred dollars a month for the buyer.

Prepaying the MI isn't always the best deal, however. You can determine which is best, prepaying or paying on a monthly basis, by taking the MI and multiplying it by 24 (2 years) and seeing which is less. I use 2 years because that is the mark that most recently has been used by lenders for removing the MI from the loan. As Ute noted below, the lender will not necessarily remove the MI on their own, you will have to apply for removal and jump through a few hoops to get it done, but it will be well worth it!

Good luck to you, and congratulations. - Sat Nov 3 2007, 21:53

Hi Patrick,

Traditionally the market does slow down in the winter months. It's harder for people to get enthusiastic about house hunting through the dark days, rain, and the holidays! However, there are winters now and again where enough compelling factors come together to motivate buyers to brave the weather and forego some holiday shopping long enough to keep buying, and to keep the market moving at a nice, sane pace. So far that is my experience going into this fall season; we have an abundance of homes to choose from on the market (not usually the case for winter buying) nice low interest rates, and consumer confidence is making a come back!

This, combined with the normal winter buyers who are usually investors or home sellers who need to purchase/reinvest by years end, and we might see a more active winter then we have in awhile. - Sat Nov 3 2007, 21:28

Both James and Rachel are right. If you want a more thorough explanation of Seattle taxes, as well as surrounding areas, here is a link that offers a great breakdown: http://www.metrokc.gov/exec/taxes/

Straight property tax is $11.15 per $1000 of ASSESSED value (as James noted, this is different and usually a lower amount then appraised value). However, there can be local assessments added to this rate, which accounts for the 1.1%-1.3% range to which Rachel referred in her posting below. - Sat Nov 3 2007, 21:13

Hi Dave,

When you say "rents", is that from an income portion (like a adu or second unit) on the house you are considering buying?

There are a few other components to consider as well, for instance is this an investment property, or will you be living in it? Or is it two units and you will live in one and rent the other? How much down payment will you be making?

The reason I ask is that if it's investment only your interest rate will be higher by 1-2% as it is a "non-owner occupied" loan.

If you can give a little more informaion maybe we can help loosely put you in the ball park of price ranges. Ultimately, however, this should be done with a lender who is looking at your specific criteria, i.e. credit report, income, and money down, and he/she will be able to offer a variety of loan packages and at that time you will know what rates would apply and what loan balance feels comfortable to you for payment.

Lastly, remember that what you qualify for can often be higher then what you are comfortable committing to, so have your lender make this dinstinction for you and find the home that best fits what you want to pay.

Best of luck to you! - Sat Nov 3 2007, 17:00