Time to ditch California for cheaper living?

September 4th, 2009, 2:00 am · 22 Comments · posted by Mathew Padilla

Randy Johnson, president of Independence Mortgage Co. in Newport Beach, author of “How to Save Thousands of Dollars on Your Home Mortgage” and a mortgage broker since 1983, answers questions…

GG in Fountain Valley asks:
Q. My husband and I have owned our home in Fountain Valley for 10 years. We have a 30-year mortgage. We owe around $235,000, and the monthly payment is $1,800 with taxes. We refinanced last year and our house was appraised at $540,000. We are in our early 50s and have an 11-year-old child. My husband has been at his work for 20 years but he is not making what he used to and I am dipping into savings to pay bills. I work part time. We were thinking of selling our house, taking the equity, and buying in another state for cash or taking out a small loan, keeping some of the money for expenses as we wouldn’t have jobs yet. We have savings, more than a year’s of expenses worth, a 401K at $45,000, an IRA of $10,000, and an annuity of $253,000. No credit card debt or car payments. What do you think of our plan?

A. Those are gigantic questions that really are beyond the scope of this column, but I will pass on a few thoughts. Everyone’s goal is to be comfortable. You have made intelligent financial decisions and you are better off than most. It seems to me that your current situation is really due to a change in external circumstance, not through any fault of your own. So I admire your being flexible enough to consider a bold solution, like making a major move.

You are not the first people to have moved to California only to say 10 or 20 years later, “This isn’t what I moved here for.” A little known fact is that our population growth lately has been because there are a lot more births than deaths. More people are moving out of state than are moving in, so you are not alone. Ninety percent of Americans don’t live in California and the ones I know are all quite happy where they are. I think that you too can find a new home where you would be happy.

You should recognize that you can pay cash for a home, but if you need even a small loan, you are going to need jobs with an income for qualification purposes. When you find an area that appeals to you, you might start working on the job situation before you buy. My best wishes to you wherever you settle.

Don from Placentia writes:
Q. I am a disabled veteran currently attending school full-time, while my wife works full-time. I have excellent credit and my wife has mediocre credit. Our family income is about $60,000 a year and we do have 20% saved for a down payment, but I prefer not using it, if it’s not necessary. We are looking to buy a home at a price range of $200,000 to $300,000, which I calculate would be about the same price I’m paying for rent of $1,600 a month. I have looked into the loan options and find it confusing between the CalVet loan and conventional loan. I have tried researching CalVet on the Internet, but I could not find any details about the benefit of the loan and most mortgage brokers seem to know nothing about it. Could you help me sort out the two options of loans and which is best for me?

A. As a veteran myself, I want to thank you for your service to our country.

You have two options, the first is a CalVet loan which are good for people in some circumstances and perhaps that includes you. You can download a preliminary form online at www.cdva.ca.gov/CalVetloans/Default.aspx and fax it to your nearest CalVet office.

I believe that the staff there will help you compare alternatives and determine whether a CAlVet loan or a standard VA loan is better for you. Note that you will need your VA Certificate of Eligibility and your DD214. Instructions at the Web site will help you get both of these forms. Good luck.

That’s it. If you want Johnson to answer a question, email it to Mathew Padilla at mapadilla(at)ocregister.com. Include your name or nickname and the city you live in — that information will be published with your question.

Johnson will answer up to three questions each week, so keep checking back for a response. If many questions are submitted, it could take a while to get a response, or he may never get to it. Also, readers keep submitting variations on the same question, which has already been answered: what to do when you can no longer afford your mortgage. I have decided not to publish most of those questions, because they are repetitive, although I appreciate the difficult situation many homeowners are in these days.

Read prior questions and answers by clicking on the headlines below…

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meltdown says:

September 4, 2009 at 7:37 am

Of course theres a premium to pay when living in California. The problem is that its too high for many. Until prices and taxes are reduced, the outward migration will continue. Businesses have already been moving. People will follow because they have to.

Nevada has spent some decent change in getting people to move.
http://www.latimes.com/business/la-fi-golden24-2009aug24,0,1640578.story

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uncle bill says:

September 4, 2009 at 8:23 am

People who are leaving are descriminating against the illegal aliens and are racists.

Who do they expect to pay for the illegals? Its just unamerican……

fcprop says:

September 4, 2009 at 12:47 pm

To put this in prospective. You can buy a $600k house in So. Coast Metro area that was built in the 1960’s, but if you have kid’s the school’s are overrun with illegals. So, basically people that can’t afford to buy a house share all the same amenities you do, but rent an apartment with 8 people living in 2bd/2ba. Basically, I think taxpayers are finally waking-up!!

Post Reply
- lolcat says:
  
  September 6, 2009 at 11:11 am
  
  Um, if you are waking up, maybe you should try complaining about the companies and people hiring undocumented immigrants?
  
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  - fcprop says:
    
    September 6, 2009 at 2:26 pm
    
    It’s problem that will not be fixed anytime soon..

BeyondTheMargin.net says:

September 4, 2009 at 9:40 am

To live in CA you have to pay up for it. I grew up in the midwest and appreciate what CA has to offer. The unfortuate part is that you end up paying lots in taxes to cover what amounts to ridiculous government waste and lots of people who leech off of the system.

Also, the state’s property tax rules combined with federal subsidies (tax and otherwise) on housing result in super inflated prices when confronted with the scarcity value of land. Its frustrating, but I couldn’t dream of living anywhere else.

http://www.beyondthemargin.net/search/label/California

SoCal says:

September 4, 2009 at 9:41 am

Not sure what jobs there are in NV, seems like their economy is worse than CA’s. How many companies have headquarters in NV vs CA? Not many, and there is a reason for that: CA is a nice place to live. I like to visit the dessert, but I don’t want to live in one.

chuckconners says:

September 6, 2009 at 3:51 pm

You had better know someone in Nevada, good old boys network. Tuff to get a good job if you are from out of state.

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OC CPA dude says:

September 6, 2009 at 7:09 pm

There are 48 other states besides Nevada and California. I believe Texas is the number one destination for departing Californians. Plenty of high-paying jobs and affordable housing stacks up pretty well compared to California of late.

The same things that makes Texas great today, are what made California great once upon a time. So many our quick to blame the legislature for the bad times in California (who I agree, has a large share of the blame), but you can blame unaffordable housing on self-serving. short-sighted Californians who voted for Prop 13 in 1978.

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- Jack says:
  
  September 15, 2009 at 5:15 pm
  
  Good luck in Texas, I hope you like the heat. Texas has 100 or more day’s a year of triple digit heat. You will need a good job to survive the heat, o yea, what about all the monsoon rains, when the sun doesn’t shine. Good luck.
  
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  - peter wolf says:
    
    September 23, 2009 at 1:43 pm
    
    Have you stepped outside today? Pretty hot ain’t it? Look, when you have to find a job you go where they are. And they are in Texas. Does not matter what the heat is if you have to eat.
peter wolf says:

September 23, 2009 at 1:41 pm

How many headquartered in NV vs Calif? The correct question is what is the proportion relative to the population of each state. And the answer is based on relative population, NV has more. But more important than that is manufacturing is leaving Calif and going to NV and Texas, etc, etc. When that happens so do the jobs that feed off of manufacturing. Further, retired people ( who have money to spend in their retirement years) are not spending it here because they’re leaving the state also.

We’re screwed.

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Patricio says:

September 4, 2009 at 10:47 am

Much of what made CA great is gone, those of us born here and that are over 30 know this. The opportunity was there, the open space was there, affordable housing all of it….much if not all of that is gone now unfortunately. There are many places great to live we do not have a monopoly on that.

peter wolf says:

September 23, 2009 at 1:47 pm

You are correct. I have lived here all my 59 years and I remember this state when it was the envy of the country. Entire industries wanted to move here. What happened? About 40 years ago the Democrats gained control of the state legislature and have never lost it. With them came the extreme environmentalists and tort lawyers. This fatal combination drove taxes and regulations up and businesses out. It is that simple. When that happened the morale of the public dropped because of the difficulty in finding and keeping a job. When you are unemployed or under employed you are not a happy person and you take that out on everyone ( road rage, rudeness, etc) around you. That is what has happened here.

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marketbuy says:

September 4, 2009 at 3:29 pm

If I was laid off from my company, I would seriously consider moving to Texas or even Canada!!

Outsider says:

September 5, 2009 at 8:44 pm

I’ve heard good things about Austin and I’ve even thought about Vancouver

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- peter wolf says:
  
  September 23, 2009 at 1:50 pm
  
  My nephew, with no skills ( other than playing a guitar) and no college education, moved to Austin where he now has a job, such as it is. Point is he could never get a job in California that could pay enough to just rent something. In Austin ( because the job market is strong) even he could find a job and can afford to rent.
  
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lolcat says:

September 6, 2009 at 11:10 am

You get what you pay for. However, I think there are other places with the costs of California that sound so much better. I’d love to live in Vancouver, BC, Boston..pretty much anywhere with actual trees and culture. But not Texas, anything other than Texas. (sorry, I just wouldn’t fit in there.)

Phil A says:

September 6, 2009 at 3:02 pm

My family lives in British Colombia. I lived in Victoria for a couple of years and, if I could, I wouldn’t mind living there again despite the expensive real estate. Vancouver, however, is a place I’ve always hated. I don’t know what it is about the place but I just really can’t stand it a whole lot. I think it may be because Victoria has this rain shadow effect and as a result has more sunshine than Vancouver.

I grew up in Ontario (Canada) and was subject to all seasons and all manner of weather. There are two slices of time in the year where things are beautiful there - in the late spring when things are leafy and the air is sweet, and early fall when the leaves are spectacular and the air is brisk. The town I grew up in was suburban sprawl - Irvine (where I live now) has more vitality and diversity than that humdrum place.

I do love living in California though. I appreciate the weather (fire season being the exception), and I have a great job here. Do I love it enough to buy a house and settle down here indefinitely? I really don’t know.

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exodus says:

September 6, 2009 at 6:24 pm

i think dallas texas is not really bad at all. i have recently moved to frisco, texas. over here has more jobs and everything is affordble though. i guess in order to spend more than 3 hundred of thousand dollars to buy a junk house in southern california, you can come here and buy yourself a mansion….