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Financial Requirements for Purchasing in Laguna Woods Village, formerly Leisure World

Although Laguna Woods Village is one of the most affordable senior communities in Southern California, there are financial requirements for purchasing here. For a Stock Cooperative, or Co-op, you need $125,000 in liquid, marketable, or income producing assets above the purchase price of a home and $36,000 per year in income. To purchase a Condo, you need $125,000 in assets above the purchase price and $45,000 per year in income. “Assets” can include equity in your current home or an investment property, 401 k, IRA, stocks, bonds, or a mixture of any of these asset classes.

As an example, if you wanted to buy a home for $200,000, you would need to show total assets of $200,000 + $125,000 = $325,000.

Currently, there is no “exemption” for meeting these financial requirements. BUT, if you make a big enough yearly income, you might need less assets to purchase a home. Conversely, if you have a high amount of assets but do not meet the yearly income requirement, some of your assets may be counted as income…

Another method for satisfying the financial requirements is for a family member (son, daughter, sister, brother, son in law, etc.) to be a ”Guarantor” for you. In that case, for a coop, they would need to have an income of at least $90,000 and $250,000 in assets. The occupying parent must have an annual income of at least $24,000 and $75,000 in assets. For a condo, the “Guarantor” would need to have at least $80,000 in income and assets equal to $200,000 plus the purchase price of the home. The occupying parent must have at least $125,000 in assets. The whole goal in having the financial requirements for purchase is, the association wants to make sure you can live in the community comfortably. You are not “strapped” for cash!

I don’t know if these financial requirements help in making the City of Laguna Woods one of the “Top 10 Safest Cities in the Nation”, which it is, but it sure can’t hurt! It is nice to know your neighbors have met these requirements as well!

Please see my web site if you have any further questions or would like more information about the active senior community of Laguna Woods Village, formerly Leisure World, at: www.leisureworldre.com

18 March
Financial Requirements for Purchasing in Laguna Woods Village, formerly Leisure World
Howard says: November 10, 2008 at 2:46 pm

Thanks for the very useful information. You??™re probably right that having these more stringent than usual requirements makes for a safer, more stable community.

Jason Qian says: May 13, 2012 at 2:30 pm

I, a retiree seeking a new home, have been watching this nice community with great interests for quite a few years and as a matter of fact, have also been hesitating a lot. One largest concern is, will a community like this with virtually no kids and young people be a little too dull and lack of vividness though there are so many clubs and activities for the seniors? They are different, after all. Why dont they allow a certain percentage, say 20%, of residents below 55 to be mixed up with a majority senior citizens? Probably certain degree of integration of the elderly with the “normal” society will be better than a separation?

patrick says: February 25, 2013 at 10:51 am

Hello Jason, in answer to this question, I would say, “to each his own.” If you would prefer to live with children around, by all means do so! Some people prefer the option of not doing so, that is what is so great about this world, options! Also note that kids ARE allowed to visit their folks or grand parents here, and it fact, can stay for up to 60 days at a time, so there are SOME kids around! Typically, this is during summer or winter vacations, but it also could be during any time of the year…

Sue says: January 7, 2014 at 4:23 pm

I would like to clarify that if you purchase a laguna woods home you have to show $125000 in liquid asserts above the price of the home which can be a mortgage and at least the minimum income

So il I were to purchase a $300000 home with a 90% mortgage and can shoe at least $125000 in asserts this would be acceptable?

Please inform thank you

patrick says: January 9, 2014 at 12:14 pm

Hello Sue, regardless of the fact that you are getting a loan on the property, you still need to show the assets! So if you purchased a $300 k home, you would need to show assets of $300 k + $125 k for a total of $425 k in assets. Please call or email me if you have any further questions regarding this!

Sue says: February 3, 2014 at 8:43 pm

Thank you for the info! After filling out the application how long does it take to get approval?

patrick says: February 4, 2014 at 10:54 am

Hello Sue, they check the financial requirements during escrow. During that time you will fill out the application, gather your financial documents, and submit them both to escrow and they will submit them to the board for approval. Typically this takes a week or two but since we are in a 30 day escrow anyway, this is fine. If you are really on top of things I can even send you the application early if you would like to get a “jump start” on this…

David G. says: March 5, 2014 at 8:23 pm

“if you purchased a $300 k home, you would need to show assets of $300 k + $125 k for a total of $425 k in assets.”
Why would anybody take out a loan to cover the $300K home if you had $425K in assets?
Why would anybody do that?

patrick says: March 6, 2014 at 10:25 am

Good question David! You make a good point. One possible answer is they need the mortgage write-off. Perhaps you make a lot of money each year and you are looking for ways to bring down your total taxes. You can write off mortgage interest on your income taxes thus reducing your total taxes. Another reason might be, perhaps you have that $300 k invested in a great preforming stock or other financial instrument. If you took this money out to pay for the house you would loose those great gains you are making on your investment! But you are correct. Generally people DO pay cash for the home. We have one of the highest levels of people paying cash for their homes in the nation.

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