With sky-high rents, tenants should take another look at purchase opportunities.

Ed Fuller

Ed Fuller

Possibly the most affordable opportunities on the South Coast are in the La Goleta condominium complex, consisting of 270 one- and two-bedroom units. These are located near Hollister and Highway 217 into UCSB. At the moment, there are five one-bedroom units for sale ranging in price from $299,000 to $349,000.

What does buying one of these units look like?

Well, the conventional lenders are now making 95 percent loans with only about a ½ percent interest rate premium for the additional risk. Best of all, for a student, non-occupant family members can co-sign and, if they have enough income, qualify completely for the payment, even while the student isn’t working — and with 5 percent down.

Another scenario would be two people purchasing together with combined gross incomes of $60,000 a year. They should be able to qualify for a $285,000 mortgage with good credit and no other payments.

To make things easier, they may even qualify for a conditioned grant equal to 3 percent of the loan amount, or $8,550. This would make the down payment $6,450 on a $300,000 purchase price. After additional closing costs of about $2,850, the lender will want the buyers to still have two months of reserves in the bank, or about $4,500.

So the total cash required to make the purchase would be around $14,000. Gifts may also be acceptable by the lender to help with the cash requirements.

The total monthly payment under this scenario would include the loan at $1,444, the taxes at $313, condo insurance at $35, homeowners association dues at $330 and mortgage insurance at $128, for a total of approximately $2,250. With tax savings of approximately $225 (consult your accountant), the after-tax payment would be close to $2,025 per month.

Maybe owning isn’t such a distant dream?

Ed Fuller is a real estate broker with San Roque Realty Inc. and president of the Santa Barbara Association of Realtors. Contact him at ed@sanroquerealty.com or 805.687.1551. The opinions expressed are his own.