1610 Marina Way, San Jose, CA 95125

53

B.A.C.A.H. 2010 Jul 29, 2:51pm

Nobody,

people making that kind of money in SIlicon Valley live in the Fortress Enclaves like Cupertino Schools, etc. Not in places walking distance to Del Mar High School.

54 vain 2010 Jul 29, 5:18pm

sybrib says

Nobody,
people making that kind of money in SIlicon Valley live in the Fortress Enclaves like Cupertino Schools, etc. Not in places walking distance to Del Mar High School.

My cousin has a great big smile at family gatherings even though his mortgage is over 10k/month. He's in Saratoga.

55

Â¥ 2010 Jul 29, 5:57pm

Nobody says

@ Troy,
You gotta be sh**ing me. How can 20% of $850K be 165K? Did you even graduate high school? It is $170K.

If you buy through redfin, they kick back $5000 (actually $3000 now, they changed it recently & I hadn't updated my spreadsheet). $5000 of principal isn't going to be changing these numbers that significantly, anyway ($16/mo, actually).

How can the monthly mortgage payment be $2200 on the 15 year loan, when the loan principle is more than $600K? Letâ€™s see, 80% of $850K is $680K. So if there is no interest, you still have to pay $680K/180 payments = $3777.78 Add interest of 3.88% to that, you will be paying close to $5000 a month. Your math does not make sense at all. First clean up the number.

$680K x 3.88% is $2200/mo. That's the dominant cost.

So the subtotal with the property tax, adjustment for inflation and interest

Don't "adjust for inflation". That's the beauty of buying, the rest of the economy can inflate away (like it did in the 1960s, 70s, 80s, 90s, and 00s) but your mortgage payment stays the same.

Property tax (1.24%) on $850K is $900/mo.

would still make the subtotal of more than $5700 still. So how can you even get $2200?

Both interest and property tax are deductible, which gives us . . . around a $900/mo credit.

Interest Paid: $2200 x 12 = $26,400
Property Tax Paid: $10,540

Total deductions: $37,000
Less standard deduction: $11,400

Deduction $25,600

Tax bracket (state/federal): 35%

Tax savings: ~$9000 or $750/mo. ($900/mo savings is for single filers since their standard deduction is lower)

Also, I don't count principal repayment as a "cost" since it's really a form of savings.

This is the mistake I made in my analysis of whether to buy a $350,000 condo ~10 years ago, before interest rates fell in 2001. I didn't think I could afford $2600/mo in housing costs, but that included $300+/mo in principal repayment. If I had stretched myself then, my actual outgo would be $2000/mo now, $1600/mo without the principal reduction (plus of course the condo would be worth over $500K now).

$1600/mo housing cost for a very nice 2B condo would be a pretty good deal these days in this area, alas.

So letâ€™s see, the bank states that mortgage payment and property tax should not exceed 30% of their income. so $5700/30% will be $19K a month. That would be 12 months X $19K = $228K annual income after paying 20% of the down payment. OK, thatâ€™s fine. I am sure there are many people who make that kinda salary in Silicon Valley.

Actually if that's sarcasm, anyone buying this house is not going to have just fallen off the turnip truck. They'll have had 10 or 80 years of accrued equity and be able to apply that to this house. Plus it's very easy for a COUPLE to make $228K, with the lower salary going entirely to paying the house off in under 10 years.

One more thing, good luck getting jumbo loan on 15 year loan. It is just not happening, buddy.

Luckily, $720K loan amount is the conforming limit these days : )

Is this how you con an unsuspecting people who canâ€™t even afford a house to buy a house? This recession was partly caused by the peopleâ€™s stupidity and inability to do the simple math. And it is causing us to lose jobs, house and causing our misery in general. And this is how YOU BECAME THE PART OF THE CAUSE. SHAME ON YOU. And stop down playing exactly how much it would cost to own this property. I agree the joy of owning house can not equate to a monetary gain. But this is simply outrageous.

I'm just reporting what my spreadsheet is telling me. Rules were different when interest rates were 8.5%. At that interest rate, a $3000/mo carrying cost (PITI less the P) works out to around a $530,000 purchase price!

56 lowrydr310 2010 Aug 2, 2:46am

So letâ€™s see, the bank states that mortgage payment and property tax should not exceed 30% of their income. so $5700/30% will be $19K a month. That would be 12 months X $19K = $228K annual income after paying 20% of the down payment. OK, thatâ€™s fine. I am sure there are many people who make that kinda salary in Silicon Valley.

Just because the banks say mortgage/property tax shouldn't exceed 30% of your income doesn't mean that is what you should be paying.

The monthly mortgage that the banks claim I can afford is 2.5x what I currently pay in rent; I'm willing to stretch what I currently pay for the opportunity to own something, however not 2.5x more.

My logic is that the less I spend on housing, the more I have to save or spend on other things that I can enjoy.

57 wgrenter 2010 Oct 12, 10:43am

$775k

btw "zestimate" is $1mil.

58 vain 2010 Oct 12, 12:16pm

"Expanded upgraded updated, Willow Glen home on low traffic loop street but yet close to freeway, wholefoods, downtown Willow Glen and ebay employees can even walk to work."

The listing is forgetting that Starbucks & Whole Foods employees can walk to work as well :)

Extremely close to Hooter's restaurant. This ought to add more value.

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