Mello Roos is depressing as hell

Mello Roos is actually a very good deal. Think of it as a payment plan on part of the cost of the house/community. Instead of paying it all up front you pay it through monthly payments, ala Mello Roos.
 
[quote author="asianinvasian" date=1231245136]Mello Roos is actually a very good deal. Think of it as a payment plan on part of the cost of the house/community. Instead of paying it all up front you pay it through monthly payments, ala Mello Roos.</blockquote>


Yeah, keep a balance on your credit cards too.
 
If I could offer any advice for having a new addition to the family - it would be to not add another stressful live event on top of that right away. If money is tight and tensions are high, you may ultimately find your relationship in trouble and the long-term home-ownership plan won't work out. As of today, you don't even need to worry about elementary school for another 5 years and even in that case, renting will get you into the same school for precisely $0 in mello roos. A win-win.
 
[quote author="No_Such_Reality" date=1231245330][quote author="asianinvasian" date=1231245136]Mello Roos is actually a very good deal. Think of it as a payment plan on part of the cost of the house/community. Instead of paying it all up front you pay it through monthly payments, ala Mello Roos.</blockquote>


Yeah, keep a balance on your credit cards too.</blockquote>


And buy a house with cash.... like us Asians!
 
[quote author="SoCal78" date=1231245490]If I could offer any advice for having a new addition to the family - it would be to not add another stressful live event on top of that right away. If money is tight and tensions are high, you may ultimately find your relationship in trouble and the long-term home-ownership plan won't work out. As of today, you don't even need to worry about elementary school for another 5 years and even in that case, renting will get you into the same school for precisely $0 in mello roos. A win-win.</blockquote>


SoCal,

You and your husband should have dinner with us...our treat for your parental advice. We are not scary...promise, though I have gold teeth now that I just bought with my Cisco stock options.
 
^ Sorry, I don't mean to come off like a know-it-all. Just wouldn't want to see someone bite off more than they can chew and complicate what should be an enjoyable time in their life. You, on the other hand, BV. With those swanky gold teeth and Cisco stock options - I have a feeling money is of no concern to you so you may be an exception to this. :)
 
[quote author="blackvault_cm" date=1231245711][quote author="SoCal78" date=1231245490]If I could offer any advice for having a new addition to the family - it would be to not add another stressful live event on top of that right away. If money is tight and tensions are high, you may ultimately find your relationship in trouble and the long-term home-ownership plan won't work out. As of today, you don't even need to worry about elementary school for another 5 years and even in that case, renting will get you into the same school for precisely $0 in mello roos. A win-win.</blockquote>


SoCal,

You and your husband should have dinner with us...our treat for your parental advice. We are not scary...promise, though I have gold teeth now that I just bought with my Cisco stock options.</blockquote>


BV, You need any advice on how you need treat Mrs. BV during pregnancy or any baby advice, Socal is awesome! She has become Panda's IHB baby counselor. Ms. Panda and I already bought some of the books she recommended and its really good. It's really cool that you and I are having our first baby this year. I hear that it really life changing and I am really excited :)



God bless.
 
[quote author="PANDA" date=1231250022][quote author="blackvault_cm" date=1231245711][quote author="SoCal78" date=1231245490]If I could offer any advice for having a new addition to the family - it would be to not add another stressful live event on top of that right away. If money is tight and tensions are high, you may ultimately find your relationship in trouble and the long-term home-ownership plan won't work out. As of today, you don't even need to worry about elementary school for another 5 years and even in that case, renting will get you into the same school for precisely $0 in mello roos. A win-win.</blockquote>


SoCal,

You and your husband should have dinner with us...our treat for your parental advice. We are not scary...promise, though I have gold teeth now that I just bought with my Cisco stock options.</blockquote>


BV, You need any advice on how you need treat Mrs. BV during pregnancy or any baby advice, Socal is awesome! She has become Panda's IHB baby counselor. Ms. Panda and I already bought some of the books she recommended and its really good. It's really cool that you and I are having our first baby this year. I hear that it really life changing and I am really excited :)



God bless.</blockquote>


You should be excited....and prepared, so it's nice to have someone like SoCal who's been there. I'm also here, with my 3 and 4 year olds. I have lots of advice, but I can't help you with the lack of sleep. Just remember that your wife will be running on a complete adrenaline rush for about 6 weeks, then it will all catch up. Be ready, anticipate the crash and then fill in as much as you can so she doesn't get sick. The first one is actually easy, it's the second one that kills you. I hope your family is like our Korean friends, mom stays for a month and does all of the cooking and cleaning. Unfortunately, I'm not Korean and we had to do it all alone.
 
[quote author="No_Such_Reality" date=1231244550]Can you pay off a Mello-Roos obligation at any time?



Originally, I thought the MRs were timebound bonds to pay for the constructing of the needed infrastructure. Are they still being timebound? I recall a big stink up in Ventura last year about the homebuilder paying off the MRs for the current phase and leaving the prior phases with MRs to the tune of several thousand a year.



I'm sure it wouldn't meet with any success, but I imagine, if one really wanted to and had a agreeable agent, they could write offers with the requirement that the seller pay off, in full, the MRs at the time of purchase.</blockquote>


I think you need to pay off the obligation in whole and can't simply buy out your own homes portion of the CFD. Seems like too much paper work and a lost opportunity for proift. Also, I think the rates on these bonds are so low, it may be finacially beneficialy to pay it off over time (i'm probably totally wrong on this now).
 
[quote author="spclagent7" date=1231243594]Alright, points well taken, and I stand corrected on the use of mello roos.



As I mentioned, I do agree that prices probably have some room to fall. However, I plan on staying in this home for the long term.



Prices generally have already taken a big percentage hit in the last two years. As I -- nor none of you -- can predict bottom of the market, paired with the fact that rates are again very low, I am taking a serious swing at getting a home that my family can live in. And build equity in over the longer term.



Some of you condescending a-holes on this board need to give the newbie a break and get over yourselves. Gee, I'm sure your stock portfolios are doing super right now as you're on the sidelines waiting for housing to drop another 50%. Good luck holding your breath.</blockquote>


You remind me of me around a year to 18 months ago agent... I came into these threads blasting away with the same thoughts, feelings, rationale. The good people here were not so kind and gentle with me so count yourself fortunate.



I went from staying for the "long term" to selling my condo and renting, in large part to the insight and analysis offered by some tough cookies that haven't popped on to this thread yet. I thought in a similar fashion to you and almost dropped nearly $1M on a couple of different properties. They are all selling in the high $700K to mid $800K range today. The a-holes here helped me avoid a multi hundred thousand mistake so I caution you to open yourself to opposing views. It could save you some bucks.



That being said, I suspect I will buy within the next 18 months, hopefuly within the next 6-8 if we get another leg down in prices. As Irvine prices have been mostly flat for some time now, I would guess there has to be another 5-10% decline lurking on the horizon. At that point, I would be comfortable owning for a long term...
 
Yeap, listen to IPO but don't touch his target houses!



Seriously though, we were in the same boat as you in 2005 (just got married, felt like we needed a place to call our own ala HGTV) and bought a condo. We were thinking stay for 5 years, build some equity, upgrade to a bigger home when our incomes grew and our equity increased just like they promised in the realtor commercials.



Fast forward to 2007 and we sold, losing our 10% down payment in the process (transaction costs and 25k in upgrades that we did on the condo). Reasons were many for selling, chiefly that we wanted to buy a bigger place and we'd save more money by renting than losing money on our condo.



Anyways, point is...first home you buy is certainly not your last, since over time and as circumstances change, your housing needs changes, you learn more about home ownership, you know what works for you and what doesn't, what is your financial tolerance, etc. If you want to move in 3 years if you have 1 more kid, could you sell or are you stuck? If you got laid off, are you screwed immediately or can you handle 6 or more months of unemployment checks alone?



I never used to think about those things when I bought in 2005, but in hindsight, i was panicking from "being priced out forever" coupled with "nesting instincts from marriage and impending child coming" and "wanting to provide a good environment for child coming".



Good luck whatever you do!
 
First of all, I apologized earlier and said that some of you had good points.



Second, all of you don't know jack about me. So stop with the assumptions. I'm not a "mark," I'm not buying a condo, nor am I using any type of interest only financing.



If you some points to make, great. I'm all ears. Otherwise, the smarmy backhanded comments are not appreciated.



Some of you have gotten so jaded and take such pleasure in foreclosure misfortunes. Some of you need to get over yourselves or else shut the hell up. Some of you THINK you're brilliant when you're not.
 
spclagnt7 - Please do not take the following personally. We are all just folks with our experiences and trying our best to relate them.

Every so often a newbie posts for advice and includes the statement that they do not mind losing a bit of equity in the first year or so.

If I thought the most I would lose would be 5% or 10% for a year or so, I might not be too fazed and I might buy right now. Seriously.



But here is the kicker. 5% 0r 10% for a year or so is extremely optimistic. Many folks here have sucessfully predicted this market and continue to get it right. The bottom is years off and at least another 20% down.



I traded up in 1990, putting down 20%. Within three years, my equity was gone and withing four years, my property was upside down. I had no intention of moving. Our home was our home and we lived in it. We could afford the mortgage.

And being upside down sucked. It was awful. Maybe other folks are different and it does not or would not bother them, but my intuitions say uh-uh. I aint so different and when folks get honest I find my feelings are just like everyone else's.

It is easy to say that one will not mind losing a little bit of equity, but reality is different than projection. And it won't be just a little bit of equity.

Even after the re market bottoms, it will not be coming back for a long time.

We are leasing. And my wife is tired of it.

But, we will wait. And in the long run, she will be happy we waited.

Just a guess; folks purchasing right now with less than 20% down will lose their homes within the next few years.



And I think the idea that a new home will require less expense because there will be no maintenance is not realistic. A new home "needs" alot of new purchases.

And I agree, Mello Roos is lousy. I do not see any way around it. Someone has to pay for ne infrastructure.
 
Personally, I would not buy another home with Mello Roos. True, I am paying MR now, but my home was only 200k (in 1993)! The Mello Roos payment was not that big of a deal. In the current market, the MR fees would be more than double what I am currently paying. That, coupled with the mortgage, property taxes, etc., is just too much. There are plenty of nice neighborhoods that don't have MR.
 
Regardless of Mello Roos, I think you need to consider rental parity. Use the RentVsOwn Calculator to compare the cost of owning vs. renting. Also figure into that how you can put your down payment to better use.



And with a new baby, I think renting a house may be less stressful as you can call your landlord if you have problems. And you probably don't have time to decorate/landscape/upgrade a new home right now anyways.



Everyone wants to build equity, but in a decreasing market, it's better to wait for bottom because at that point, you've created instant equity.



Aside from the investment angle, I think if you concentrate on your monthly costs, you may find that renting a similar home may be a better decision financially.
 
[quote author="Trooper" date=1231257816]spclagnt7 = janet</blockquote>


Not sure about that, but agent sure seems like a jackass to me.



Yes agent, I am brilliant. Don't forget it. Embrace every word I write with a holy reverence and live your life according to my whims and directives...



[/snark]
 
If you don't want to pay Mello Roos, you simply buy a home without Mello Roose, or with very low Mello Roose.



<a href="http://www.city-data.com/forum/orange-county/130894-what-areas-south-oc-irvine-has.html">http://www.city-data.com/forum/orange-county/130894-what-areas-south-oc-irvine-has.html</a>
 
[quote author="SoOCOwner" date=1231286421]Personally, I would not buy another home with Mello Roos. True, I am paying MR now, but my home was only 200k (in 1993)! The Mello Roos payment was not that big of a deal. In the current market, the MR fees would be more than double what I am currently paying. That, coupled with the mortgage, property taxes, etc., is just too much. There are plenty of nice neighborhoods that don't have MR.</blockquote>


Mello Roos payments don't change. They are fixed. Regardless of the price or value of the house.



As for pre-paying Mello Roos, it is possible for some MR bonds. To investigate you just need to call the assessor (usually there is a phone number on the tax bill right next to the MR assessment that you can call). From what I have seen, 90% of MR is not pre-payable at all. The 10% that is pre-payable only makes sense if you are going to be there for 15 plus years, or it is an investment property and the yield on your pre-payment improves your overall investment yield.
 
Mello Roos is another benefit of Prop. 13. That was our parents and grandparents way of screwing the next generation.



Kinda like we are doing now with the bail out.



Why should I pay more property taxes in the future when I can pass it on to my kids and grandkids.



No way the bubble inflates as much as it did if there was no Prop 13. Instead of people bragging about their equity they would have been pissed that the tax bill kept going up.
 
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