Archive for the ‘Mortgages’ Category
I’m not going to lie to you: the prices of homes in California are flat-out expensive. You’ll find your occasional good bargain, but if you’re moving from any other part of the country (besides the New York City area) to most parts of California, the prices you’ll have quoted to you are probably going to take your breath away.
When I say real estate in California is costly, I’m not just talking about Hollywood or Bel Air or the nicest parts of San Diego and San Francisco. I’m talking about all over and on a general basis. The fact is, California is the most populous state in the United States (by far), with California’s 55 votes outranking #2 place state (Texas) by 17 votes and dwarfing New York State and Florida’s 29 electoral votes. California has a lot of people, while more people want to live on the West Coast all the time.
So the price of homes are costlier on average in the cities of California than just about anywhere you’re going to look, whether you’re looking in Long Beach or Anaheim, Oakland or Bakersfield. When you get into the heart of cities like Los Angeles or San Francisco, or near the beachfront properties in Los Angeles or San Diego, the prices are going to skyrocket. Keep that in mind when shopping for cheap homes to buy in California.
Cheapest Homes in Los Angeles
The cheapest home I found listed in Los Angeles is a 2 bedroom, 1 bathroom home with 572 square feet selling for $69,900 on East 117th Street. Another house about that size is a 576 square foot single-family home on Hooper Avenue in LA. This place has 1 bedroom and 1 bathroom and has an asking price of $89,900.
Most of the cheaper houses I’ve found in the City of Angels are nowhere near as inexpensive. For instance, I found a 3 bedroom, 2 bathroom residence on Weigand Avenue with 3 bedrooms, 2 bathrooms, and 1,174 square feet. This house is selling for $154,900. I found a HUD home selling for a hundred dollars more, ($155,000–another home had a $123,000 price tag, but it was exclusive for government agencies and non-profits). The 155-grand house has 3 bedrooms and 2 bathrooms and is found at 1125 East 114th Street.
Croesus Avenue has a 5 bedroom, 2 bathroom home selling for $109,000. Croesus Ave also has a $115,000 home selling with 2 bedrooms, 1 bathroom, and a rod iron fence around small yard. The Santa Rosalia Drive Apartments has a 2 bedroom, 1 bathroom home with $133,560 asking price. On 5th Avenue, you’ll find a small but pleasant-looking 2 bedroom, 1 bathroom home with a yard, layered walkway and palm trees in the background. This home sells for $169,000. Grape Street has a 2 bed, 1 bath, 940 square foot single family home selling for $118,800. If you’re looking for a home on Compton Avenue, you’ll find a house with 4 bedrooms and 2 bathrooms fitted into 1,486 square feet of living space. This home has an asking price of $100,000.
Another cheap home I found is a 2 bedroom, 1 bath place on East 106th Street. This foreclosed home is selling currently for $94,900. You can find a home with a rod iron fence around it on East 101st Street with 3 bedrooms, 2 bathrooms, and a price tag of $148,000.
Cheapest Homes in San Diego
The cheapest residences to buy in San Diego are condominiums. Most of the residential houses are in the hundreds of thousands of dollars, so the condo is a less expensive, trendy way to live. One of the cheapest places to buy I found in San Diego is a 1 bedroom, 1 bathroom condominium with 670 square feet at Hotel Circle’s S Unit C3. This San Diego condo’s asking price if $99,900. On Nile Street, you’ll find the Unit 3 condo is on sale for $124,900. This condo has 2 bedrooms, 1 bathroom, 782 square feet, and a one-car garage. On Beadnell Way, you’ll find a 2 bedroom, 1 bathroom condo selling for $139,900. Ask about Unit 1 at the front office.
Paseo Cardiel has a 2 bedroom, 1 bathroom unit selling for $149,000. You’ll also find a home listed online under a McClintock Unit address which says it’s selling for $551. A quick perusal of the listing shows that the square football on the place is 551 square feet, so unless this home owner has a quirk about selling his or her home by $1 per square foot, I would expect a more substantial price. Carmel Mountain Road has a 2 bedroom, 1 bathroom condo selling for $124,000. This condominium has 798 square feet in it. Among homes, a 1 bedroom, 1 bathroom residence on Scripps Westview Way is about as cheap as they come. This foreclosed place is selling for $135,000.
San Jose’s Least Expensive Homes
San Jose is the third-largest city in California, behind LA and San Diego. San Jose has more people than nearby San Francisco, even. Unlike many of the big cities in Southern California, you can find homes selling for 5-figures in the San Jose area. For instance, a 3 bed, 2 bath, 1,344 square foot residence on Ford Road (at unit 34) is selling for $89,900. On Nicholson Lane, you’ll find a 3 bed, 2 bath trailer home selling for the same price: $89,900. At Senter Road, you’ll find what appears to be a 3 bedroom, 2 bathroom condo selling for $149,000.
Inexpensive Residences in San Francisco
The price of housing in the Bay Area can be outrageous at times. The California real estate market has long been out-of-touch with most of the other regions of America. Even in the biggest economic downturn in decades, the price of real estate remains significantly higher than in most parts of America. As an example, Lobos Street in San Fran has a 2 bedroom, 1 bathroom house selling for $209,000.
20th Avenue Apartment E has a 1 bed, 1 bath unit selling for $232,000. If you asked anywhere near that in most parts of the country, they would laugh you out of the room. In comparison, the 4 bedroom, 1 bathroom house on Sagamore Street which is selling for $295,000 seems like a real bargain.
You’ll find a lot of properties listed on certain foreclosure listings online (upwards of 200), but most of these classifieds have a suspicious amount of detail (or lack of detail). When a small home on Franklin Street has a listed price of $985,000, you have to wonder what the price are on all the San Francisco house listings where they don’t want you to know the price.
Even on the HUD website, I wasn’t able to find information. Despite having hundreds of properties listed for California, not one appears to come up in a search of the HUD classifieds for San Fransisco. To find the cheapest homes in San Fransisco, you may have to approach things the old-fashioned way–through a realtor or realty website in the Bay Area.
Cheapest Homes in Sacramento
The same cannot be said for Sacramento. California’s state capital has a significant number of cheap property listings. HuD has a number of cost-effective housing options which are significantly lower than what you’ll find in most of California’s bigger cities, though the prices are still nowhere near as low as you’ll find in the Midwest.
HUD featured a $141,500 asking price for a 2 bedroom, 1 bathroom house at 520 Tenaya Avenue in Sacramento. At 1827 Jamestown Drive, HUD is selling a 3 bedroom, 2 bathroom home for $92,000. The price on this house just was lowered recently. Both the Jamestown Drive and Tenaya Ave homes are extended listings. A two bedroom, 1.5 bathroom house at 8857 La Riviera Drive is selling for $60,000 exactly. The price on this residence was recently lowered.
Frenso’s Cheapest Home
Fresno, the largest city in the San Fernando Valley in central California, has much cheaper housing than in Southern California around Los Angeles or San Diego, and certain cheaper than you’ll find in the San Francisco Bay Area. Fresno is the 5th largest city in California by population, so the job market should still be significant.
You can buy a house on East Franklin Avenue with 2 bedrooms, 1 bathroom, and 938 square feet for $42,400. This house has a yard and a chain link fence. North Ezie Avenue has a 3 bedroom, 2 bathroom home with 1,436 square feet selling for $79,900, while you can find a home on North Harrison Avenue with 3 bedrooms and 1 bathroom fitted into 1,080 square feet selling for $74,900.
Look on East Holland Avenue and you’ll find a home with 3 bedroom and 1 bathroom in 1,026 square feet selling for $64,900. Look on South Maple Avenue and you’ll find a 3 bed, 2 bath home with 1,434 sq feet and an asking price of $74,900. A two bedroom, one bathroom, 1,085 square feet house on East Iowa Avenue has a price tag of $49,000, while an East Floradora Avenue home with 3 bedrooms and 1 bathroom has an asking price of $54,500.
One of the big questions to ask when buying a house is how much will my mortgage payments be? When looking to refinance or make a purchase of a new property, it is important to be able to calculate mortgage payments based on the current rate environment. When refinancing a home, both the current payment and the proposed payment need to be determined so that an accurate comparison can be made. When purchasing a new home, calculating a payment is important to determine whether the purchaser can afford the payment. Calculating mortgage payments is a simple process with a basic spreadsheet program, but more difficult without one.
The Variables of a Mortgage Payment Calculation
Three variables required to calculate a mortgage payment are the interest rate, loan amount, and amortization term. The first two variables are obvious, but the loan amortization term can be a bit more confusing.
The loan amortization term refers to the period of time required to pay the loan in full. The typical 30-year mortgage has a 30-year term, but also a 30-year amortization term. At the end of 30 years, the mortgage is paid in full based on the payment schedule. It is possible for the term of the mortgage to be shorter than the amortization term. A balloon mortgage occurs when a payment larger than the normal scheduled payment is required to pay the loan in full at maturity.
Calculating a Mortgage Payment with a Spreadsheet Program
All modern spreadsheet programs contain a payment function. Microsoft Works requires the principal amount, the rate, and the term. Microsoft Excel requires the rate, the number of periods, and the present value. These are all the same variables that are being required. It is important to note that the rate will need to be adjusted based on the period of time being measured. For example, on a 30-year mortgage where payments are made monthly, you will have to divide the interest rate by 12 to determine the monthly rate. A similar adjustment needs to be made to the term or number of periods. On a 30-year mortgage, payments are made monthly, so the number of periods is equal to 360.
Assuming a 30-year, fully-amortizing mortgage, a 6.00% rate, and a $200,000 loan amount, the monthly payment would be $1,199.10. The 6.00% rate needs to be divided by 12 in the function, resulting in a monthly rate of 0.50%. The number of periods or term is 360 months.
Calculating a Mortgage Payment with a Basic Calculator
Calculating a mortgage payment without a spreadsheet or financial calculator requires a bit more math. The formula is as follows:
Payment = Principal x [rate x (1 + rate) ^n / (1 + rate) ^n -1]
The “^” indicates an exponent, and “n” represents the number of periods or amortization term. Starting with the fraction within the brackets, a 6.00% annual rate needs to be converted to a monthly rate, which would be 0.50%. The numerator is determined by multiplying 0.50% times 1 plus the 0.50% rate to the power of 360, which is 0.0301. For the denominator, 1 plus the 0.50% rate raised to the power of 360 minus the whole number 1 is 5.0226. Dividing 0.0301 by 5.0226 is 0.005996. Multiplying this result times the principal amount of $200,000 from the example above equals $1,199.10. This is the same result achieved in the spreadsheet example above.
A basic spreadsheet program is the easier route to take. To perform the calculations using the formula above requires a calculator that can handle exponents.
Many mortgage lenders also require that taxes and insurance be escrowed. This does not affect the monthly principal and interest payment, but it would affect the total monthly payment to the mortgage company. Many times, a mortgage company will require 13 months of tax and insurance payments to provide a buffer against rising taxes and insurance costs. This would be calculated by adding the annual tax payment required plus the annual property insurance payment, dividing by 12 and then multiplying by 13. A mortgage representative should be able to indicate what amounts will be required on an ongoing basis.