mello roos in orange county cities (Santa Ana, Thousand Oaks: HOA, insurance, mortgage)

[Juneb81]

I am a first timer in home buying in orange county. I want to get the most house by watching taxes, mello roos and home owner associations. Can you help me out on how to find which areas have mello roos and how much?

[EscapeCalifornia]

The newer (built after 1982) areas such as anything up against the Santa Ana mountains is more likely to have it. A realtor will know which specific developments have it.

[kturbe]

Mello Roos is a bond that covers the cost of roads, new schools, etc in newer neighborhooods. But even in some neighborhoods could have mello roos on one street and not the other. The amount may differ from, a few dollars to thousands.

When buying your first home, the most important first step is to get pre-approved based on your finincial picture and the lender you choose should breakout the mortgage cost, tax cost (as a whole), insurance, assocation fee's etc. I would also recommend you work with a Lender and Realtor who understand what you are looking for as a first time buyer. I come across many first timers who are not fully aware of the different programs available to them and not all lenders have access to each program, for example FHA, etc. But if you have a Realtor who is aware then you have some checks and balances.

Once you are pre-approved then a Realtor can help you determine the neighborhood you want and compare cost with mello roos and without. For example, I showed two houses yesterday in the same neighborhood, one had mello roos of $500.00 a year and the other didn't. But the home with Mello Roos was priced less then the one without.

There are certain areas, i.e. Ladera Ranch, Portola Springs, that generally have a higher tax which includes MR and a Realtor can help you understand those situations.

Should you need any further help please do not hesitate to contact me direct. There are some awesome new programs out currently for first time buyers and with the pricing drop in the OC you may even get FHA coverage on many homes...

Remember, It's Possible!

[Charles]

Originally Posted by Juneb81

I am a first timer in home buying in orange county. I want to get the most house by watching taxes, mello roos and home owner associations. Can you help me out on how to find which areas have mello roos and how much?

There has been a debate as to whether MR is considered a tax that can be written off on your income taxes. In Ventura County it was on the property tax bill and for nine years I wrote it off. I never confirmed that this was legal or illegal and believe it or not, I didn't find too much on this technicality on google.

Can anyone chime in conclusively on this?

[Juneb81]

But the MR is % of the cost of the house, right?

[fipster]

It depends. Some MR is a %. Others are set annual amounts.

[EscapeCalifornia]

Originally Posted by cfdtax

Mello Roos taxes, in my opinion, are not really taxes at all. They are actually a pre-existing loan attached to the title of the property when you purchase it. The fact they show up on your tax bill is just a facet of the Mello Roos Act which was a developer initiated bill pushed through the CA legislature in 1982. Home purchasers should evaluate the "mello roos" loan like any other loan prior to home purchase. Some are good loans and some are bad loans. The deductibility of mello roos taxes is sticky issue which isn't clear and you should ask a tax attorney about its deductibility. cfdtaxadvisors.com

But do they ever expire? And why would the repayment of a debt secured years ago be affected by your house's value? If it were a parcel tax with a known end date, that would make more sense. But as if its tied to your house value and it doesn't end, it sure sounds like a tax to me.

[Charles]

Originally Posted by EscapeCalifornia

But do they ever expire?

Datapoint: Our Mello Roos in Thousand Oaks started in 1998 and was to last for 15 years at $1200/year (which actually adjusted downward slightly....somehow related to bond/price/indexes???? not sure).

I wrote it off on my my federal tax as it was a line item on my property tax bill.

[elba1653]

Originally Posted by kturbe

Mello Roos is a bond that covers the cost of roads, new schools, etc in newer neighborhooods. But even in some neighborhoods could have mello roos on one street and not the other. The amount may differ from, a few dollars to thousands.

When buying your first home, the most important first step is to get pre-approved based on your finincial picture and the lender you choose should breakout the mortgage cost, tax cost (as a whole), insurance, assocation fee's etc. I would also recommend you work with a Lender and Realtor who understand what you are looking for as a first time buyer. I come across many first timers who are not fully aware of the different programs available to them and not all lenders have access to each program, for example FHA, etc. But if you have a Realtor who is aware then you have some checks and balances.

Once you are pre-approved then a Realtor can help you determine the neighborhood you want and compare cost with mello roos and without. For example, I showed two houses yesterday in the same neighborhood, one had mello roos of $500.00 a year and the other didn't. But the home with Mello Roos was priced less then the one without.

There are certain areas, i.e. Ladera Ranch, Portola Springs, that generally have a higher tax which includes MR and a Realtor can help you understand those situations.

Should you need any further help please do not hesitate to contact me direct. There are some awesome new programs out currently for first time buyers and with the pricing drop in the OC you may even get FHA coverage on many homes...

Remember, It's Possible!

hi, i think it great that you help people. I am looking to buy a home and i am first time home buyers, so please keep giving advice....What is Mell Roos? and why do people need it?

[RAMFEB31]

Since all of you are using a computer, just punch in MELLO-ROOS and you will find all kinds of info including the question of tax deductibility. I am sorry to say, in most case, especially on a newly built project, and even though the city/county label Mello-Roos as a tax, most are not a deductible item if I have read all the headings correctly. But then, if IRS do not question it and have not question the individual tax payers, why worry about it. After all, it is included in the property tax bill and you all can claim it to be an honest mistake.
But to answer the original ?, most veteran or long time homeowners do not like Mello-Roos and even try to avoid Home Owner Ass'n like poison. But then, HOA are a fact of life in all new projects since 60s and 70s