update – we’ve decided against making an offer for new construction (we’ve been looking at Viridian in La Costa Greens by Davidson and Messina in La Costa Ridge by Shea). There are many reasons why we have decided to continue renting, at least for now, but the major three are:
1) builder security. We’ve seen three builders within a 5 mile radius of here pull out or go bankrupt over the last few months (Magnolia Estates by Barratt, Symphony in SEH by California Cove and K Havorian in La Costa Greens). Davidson is private so there’s no way to check their finances, but they have to be hurting. The lot we were interested in is a premium lot, and we weren’t on Davidson’s Priority List, but we still could have bought it as it had gone through three interested parties in less than a week. We don’t want to lose thousands of dollars if the construction company folds – a very real prospect.
2) Mortgage companies are almost all requiring a minimum of 20% down. We can technically do this, but we don’t want to invest any more than 10% in a downpayment. My credit score ranges from 790-805 and my husband’s is right there too, but that just doesn’t matter anymore – banks won’t even talk to you unless you are willing to put 20% down. We talked to several brokers, including Anika (who several of you referred me to) and they all said there just isn’t anything else out there. One broker had a 10% down option (out of 20 mortgage lenders he dealt with) but there’s no guarantee that the program will still be in place when we closed in 6-8 months. Which brings me to our final reason –
3) Interest rates. Rates are climbing, and most experts agree that they will continue to do so, despite the Fed’s decision to hold for now. Anika told me she would not be surprised to see rates as high as 8-9% by year end. We would not be able to lock today’s rate, but instead would have to go with whatever deals/rates we could find 45 days before close. Since we don’t have a crystal ball, but we do have brains, we decided that these were not risks we wanted to take.
