{"id":17271,"date":"2011-10-03T11:43:09","date_gmt":"2011-10-03T18:43:09","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=17271"},"modified":"2014-04-08T12:16:15","modified_gmt":"2014-04-08T19:16:15","slug":"terrible-at-math-you-poor-filthy-renter-you-can-own","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2011\/10\/03\/terrible-at-math-you-poor-filthy-renter-you-can-own\/","title":{"rendered":"Terrible at Math, You Poor, Filthy Renter? YOU CAN OWN!"},"content":{"rendered":"

\"DeceptiveI spotted the ad at right on the Seattle Times homepage yesterday. It’s not as patronizing as Quadrant Homes’ old “down payment latte” ad<\/a> was, but the claim of buying for just $800 a month immediately jumped out at me as unlikely.<\/p>\n

Running some quick numbers through my Simple Affordability Calculator<\/a> indicates that to have a PITI payment of $800 or less, your purchase price would have to be no more than $157,000 at an interest rate of 4.0%. Of course, that assumes you have $31,400 saved up to make the 20% down payment. If you don’t have the down payment or you don’t qualify for the lowest interest rate, the purchase price that gets you an $800 payment will be even less.<\/p>\n

So, where in the Seattle area is Polygon selling brand new homes for $157,000 or less? I clicked on the ad to find out. Three clicks down from the sparse, unhelpful landing page<\/a> that the ad sends you to, I found the sales pitch for “Dunhill Terrace,”<\/a> a townhome complex a couple miles north of Alderwood Mall. On this page, they advertise homes “from $176,990,” and claim that “If Your Rent is More Than $800, You Can Own at Dunhill Terrace!”<\/p>\n

Let’s run the numbers on that claim. According to my calculator<\/a>, if you put 20% down on that $176,990 home your monthly payment (PITI<\/a>) on the resulting $141,592 mortgage at 4.0% would be $896. Wait, that’s already more than $800. Oh, and according to the MLS listings for the advertised floor plan<\/a>, HOA dues for these townhomes add another $128 to that monthly payment, bringing your total monthly nut up to $1,024—28% higher than the advertised $800 monthly payment<\/strong>.<\/p>\n

Home financing is not some sort of dark art full of unexplained mysteries. There are only a few ways you could buy one of these $180k homes and keep your payment down to the advertised $800 a month. Even with a 2.0% interest rate (which you can’t get, even if you get an ARM), the PITI plus HOA dues add up to $871, so it seems apparent that they’re conveniently excluding the non-optional $128 HOA dues from their calculations, which feels rather dishonest to me.<\/p>\n

Here are all the ways I could think of that you might be able to get down to $800 a month:<\/p>\n