With the cost of living so high, how do teachers in Los Angeles afford to buy homes??

Question

With the cost of living so high, how do teachers in Los Angeles afford to buy homes??

Answer 1

Special programs have been created, probably because there is no way most public servants could afford houses in L.A.

Answer 2

Don't give up.  Check out FHA programs.  I know that there are some specifically for teachers and the police.  To do this, you will need to find a lender that is FHA approved in your area.  Almost any big bank will fit this bill.

Shop at least 3 different lenders, and let them know that you are shopping.  That should cut down on the fees just a bit.

Ask your lender to give you the loan at "par rate".  Tell them specifically that you don't want "YSP", or Yield Spread Premium".  YSP is where the lender artificially bumps up your interest rate so that the bank will pay him/her extra money on the side.  YSP is legal, but it shouldn't be.  

Anyway, a par rate is the rate that a lender would give a close friend or family member.  A par rate should not cost you anything extra at all.  And I mean nothing at all extra.  Your lender just won't make as much money, but don't worry, as that 1% origination fee your lender is charging you should be plenty for him/her.

Also, consider asking the seller to pay for a 2/1 buydown for you.  A 2/1 buydown will bring your monthly payments down for the first 2 years.

Or instead, you could ask the seller to pay permanent discount points for you, thus bringing down your monthly payments on a permanent basis.  If your seller paid for permanent discount points on your behalf, you should be paying "less than par rate".  

You might also consider finding loans that offer "qualified assumptions".  An experienced real estate agent can help you find these.  DO NOT use an inexperienced real estate agent for this endeavor.

You might also try locating sellers that will carry a trust deed in a position that is junior to the main loan on the property.  This is referred to sometimes as a "purchase money mortgage", or "seller carryback".  Most sellers won't do this, but once again, an experienced real estate agent can probably locate a handful of them for you.  It's a lot of work though.

Good luck to you.  Feel free to email me if you want to.

Answer 3

They don’t. Lost of people don’t own homes in areas like that.

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