Dave,

I have had experience originating and underwriting loans. I needed to learn so I could easily provide answers for my clients. And a situation of yours is typical for me.

You should talk to a mortgage broker (I know you already said you would). Reason: I have yet to be impressed by any lender rep at a bank I could walk into because most of them are new and they do not know lending guidelines. They only do the initial interview and facilitate the paperwork.

2 years of steady employment is good, but industry also counts. Education is also a factor.

Buying a home nowadays-- if you are buying your principal residence, you need at least 20% down payment, unless you go through FHA or other first-time buyer programs. FHA is a good program for first-time buyers or even for buyers who are not buying their first home as long as they only have one FHA loan. FHA allows you to have only 3% down payment, but in some real estate markets, you need 5% down payment. It depends on where you are buying. I believe SF is still 3%, but you should speak with someone who does loans in SF. Now is a good time to use FHA because the limit has increased.

Cash reserves is what you also need. Do you have about 6 months' worth of "seasoned" monies saved up? It doesn't seem like it from the figure you provided for the home price you are suggesting.

Your excellent credit scores will open doors for you to more loan programs and better pricing on the loans, but that does not mean it's an automatic approval. Property still needs to qualify, assets need to be verified (if you want better pricing) and everything else has to fall in place.

I hope this didn't confuse anything for you.

You already did the best thing -- seek guidance on what to do. The best thing to do inext s to get pre-approved so you don't waste time "window shopping" on model homes, foreclosures, bank-owned or auctioned properties.

Fri May 2 2008, 23:05

Hi Doug,

I'm afraid that such an advertisement for your services is not permitted on Trulia Voices.(Including your business URL is advertising your services). Please review our Community Guidelines located at http://www.trulia.com/guidelines/ and check out our Agent Best Practices blog post at the link below for more helpful information.

Best Wishes,

Leslie Taylor
Trulia Voices Moderator

Tue Apr 29 2008, 13:25

Congratulations on your outstanding credit scores. As an active realtor in San Francisco, I always recommend speaking with a mortgage broker rather than a specific bank. The mortgage brokers I work with have access to the individual bank's programs, but they can also compare them to hundreds of other providers. And more importantly, they can find the best loan for your situation at the moment you need it (when you find the house you want to live in). And since they work with banks everyday, they also know what's happening with each lender and what your realtor will need to know when preparing an offer (for instance, Union Bank is taking an inordinately long time to process mortgages at this time). Feel free to contact me if I can be of any further assistance in your search.

Thu Apr 24 2008, 22:18

please check wahoiva rep in San, Ca. We offer jumbo loans 80/10 from May1st, which is under jumbo Fannie Mae jumbo conforming guide line.

Please email me and let me know.

Thanks,

Tue Apr 22 2008, 15:11

Hi Dave and Mr. Burns,

The only real disadvantage is the 1.5% upfront MIP and the monthly MI. But the upside is the rates are better on a Jumbo FHA loan right now vs. a 90% no MI Jumbo loan.

Also, for now, mortgage insurance is tax-deductible. The 1.5% upfront MIP is financed in the loan amount.

Please feel free to email or give me a call. I am in San Jose, but I do work with borrowers throughout the state of California.

Elva Wormley
Branch Manager
(408) 467-0500
Allied Home Mortgage Capital Corporation

Tue Apr 22 2008, 14:05

Glad I found this post. It's funny how similar our situation is to yours. We recently sent in a lending tree application for a 750k loan and got 1 repsonse from a bank in the midwest offering us a FHA 30 yr fixed loan. Our income is approx 190k, credit scores wife and mine are around 710. We have a clean sheet but our problem is that we are from Australia and have only been in the US for close to 3 years. So the credit score isnt that great because of the length of credit history. Debt is 650/month.
We were looking at a new constrcution condo in San Francisco which is not fannie mae approved (only 60% sold). We were pre qualified by all the inhouse lenders but only with a minimum of 10% down and requiring PMI. Unfortunately for us BoA was doing the 80-15-5 loans up until March 31st.
I've been trying to find out the advantages of a FHA loan and to be honest it sounds too good to be true. The interest rate we were offered is 5.875 which is pretty close to the regular 30 yr fixed. I would love to hear the advantages/disadvantages of FHA loans and also if it would be better for people in our situation to wait and save that 10% before we buy a place or if there is some other alternative. The reason we've decided to buy a place is because we are D.I.N.Ks (Double income no Kids) and are getting killed by taxes.

Tue Apr 22 2008, 13:40

If youre putting 10% down and your loan is going to be jumbo, FHA has many disadvantages even with its higher loan limits. Sure it is an option but you will be required to pay an upfront MI of 1.5% and pay monthly MI. With the secondary market for 2nd mortgages drying up we allow straight 90% financing with no pmi up to 729,750. With 10% down, with 500k purchase price, and 150k yearly salary, I don't see why you wouldnt qualify for a mortgage. If you want to talk specifics, please feel free to email me. sunny_hong@countrywide.com

Sun Apr 20 2008, 21:57

Hi Dave,

I've been doing mortgages in California since 1981 and specifically, FHA loans since November 2002.

FHA will allow debt-to-income ratios that are in the 55% range if you can document certain compensating factors.

You don't have to meet all of these compensating factors, but at least 2 would give you a better chance for approval.

Feel free to call me or email if you would like more information.

Elva Wormley
(408) 467-0500


FYI...I copied this right out of the guidelines:

Compensating factors that may be used to justify approval of mortgage loans with ratios exceeding our benchmark guidelines are those listed below. Underwriters must record on the "remarks" section of the HUD 92900-WS/HUD 92900-PUR the compensating factor(s) used to support loan approval. Any compensating factor used to justify mortgage approval must be supported by documentation.

A. The borrower has successfully demonstrated the ability to pay housing expenses equal to or greater than the proposed monthly housing expense for the new mortgage over the past 12-24 months.

B. The borrower makes a large downpayment (ten percent or more) toward the purchase of the property.

C. The borrower has demonstrated an ability to accumulate savings and a conservative attitude toward the use of credit.

D. Previous credit history shows that the borrower has the ability to devote a greater portion of income to housing expenses.

E. The borrower receives documented compensation or income not reflected in effective income, but directly affecting the ability to pay the mortgage, including food stamps and similar public benefits.

F. There is only a minimal increase in the borrower's housing expense.

G. The borrower has substantial documented cash reserves (at least three months' worth) after closing. In determining if an asset can be included as cash reserves or cash to close, the lender must judge whether or not the asset is liquid or readily convertible to cash and can be done so absent retirement or job termination. Also see paragraph 2-10K.

Funds borrowed against these accounts may be used for loan closing, but are not to be considered as cash reserves. "Assets" such as equity in other properties and the proceeds from a cash-out refinance are not to be considered as cash reserves. Similarly, funds from gifts from any source are not to be included as cash reserves.

H. The borrower has substantial nontaxable income (if no adjustment was made previously in the ratio computations).

I. The borrower has a potential for increased earnings, as indicated by job training or education in the borrower's profession.

J. The home is being purchased as a result of relocation of the primary wage-earner, and the secondary wage-earner has an established history of employment, is expected to return to work, and reasonable prospects exist for securing employment in a similar occupation in the new area. The underwriter must document the availability of such possible employment.

Sun Apr 20 2008, 21:47

Hi all,

Four points:

1. Loan info

Thanks for the info. It's clear that I need to speak with a Real Live Human Being (tm) and will do so. Also, I'm not up to speed on FHA loans ... can someone provide a primer, or a link to one?

2. A little more on my monthlies

Our total monthly debt is $148/mo. - negligible (student loan). That's it. I can't imagine what else I can reveal under the kimono, but ask and if it's reasonable, I'll pull it further up if it will help "diagnose" the situation.

3. Local banks

My original post also asked if anyone could provide recommended local banks here in SF. If anyone from SF has a lender they recommend, I'd appreciate a contact point, as well as the reason why. (Jed, saw your comment and details - thx.)

4. Thanks

Finally, thanks for the info. I know that everyone here (myself included) has their own agenda and at the end of the day, this is all business. Your expertise and candor is appreciated.

D

Sun Apr 20 2008, 18:49

This is one of the reasons i always say talking to a person is better than talking to a computer especially when it involves a major decision such as yours.

We cannot really answer the question without knowing your monthly liabilities. Just entering this into a quick pre-qual sheet me and my Loan officer use it looks like at 12400 monthly income between the 2 of you your top end ratio's for a FHA loan @ 97% financing for a 500K purchase price would be around 31%. Thats within FHA guidelines as they usually like a 31/43. I have seen them go as high as 55% on the bottom but there are no guarantees. Even if you had around 1500 dollars a month in liabilities you would be in the 43% range.

So i know thats alot of Loan talk, but it looks just as i would do for a client that you are within range to easily qualify for a loan. I usually at this point would refer you over to the loan officer to actually enter all info and get you a more accurate approval and let him go over your options and rates.

I don't want to give up to much information but there are reasons you are not getting approved through lending tree and it has nothing to do with your incomes or FICO. Contact a professional and have them go over your options. I can gladly refer you to a great loan officer that could explain the process to you.

Also just FYI as someone stated you can get a loan up to 729K purchase, thats a bit wrong purchase price does not have to be 729K the max loan amount in certain counties is 729K so if someone were to put 20% down and want to utilize a FHA loan they could theoretically purchase a house around 910K.

If you would like more info feel free to contact me, we are actually closing our first FHA jumbo's with new loan limits this week. The loan limits have only been active about 45 days, and they are expiring as of now in December. So ask questions now.

Good Luck

Sun Apr 20 2008, 18:30

I would be very happy to help you to get a loan. However, my concern is your debt to income ratio. If it is over 55% or higher FHA does not take, which means it has to be manually underwritten. It takes time and the result may not be desired.

however, I would love to help you if chance is given. So please call me or email and let me know.

Thanks,

My number is 703 760 5664. email: sean.thorson@wachovia.com

Sun Apr 20 2008, 17:59

If you are the First time Buyer you can apply for FHA loan - the property could be up to $ 728K in SF or in Bay Area and your agent can request seller a "buy down" points. Looks like you can get the property with 5% downpayment. There are number of the Banks and Loan brokers are offering the FHA loans to qualified borrwers.

Sun Apr 20 2008, 17:16

Dave,
Do you have a relationship with a bank now. WaMu or BofA especially. I tell my clients now to talk to an experienced broker and a bank rep.
Contact Aisling Ferguson of Guarantee Mortgage at 415-345-4318
ashloan@aol.com or
Larry Lee of Bank of America at (415) 622-3892
larry.l.lee@bankofamerica.com

Both very good professional and long term loan reps.

Sun Apr 20 2008, 17:10

@ Sean,

Thanks for your reply. We're clear on LendingTree's model, and we were surprised as well. We had the same reaction as you did and wondered if it was a technical issue, so we emailed them. The response was, "No, no glitch, your criteria isn't matching anyone's terms."

Yowsa. : /

Sun Apr 20 2008, 16:37

Just want to add; lending tree is not a lender or broker. What it does is to sell your information to several brokers or lenders, and after they evaluate the data you have provided, they will contact you with their offer. Again, it could be their u/w system failure, or your information had been sold to a lender exclusively who does not offer anything less than 10% down payment.

Sean

Sun Apr 20 2008, 16:25

Hello Dave,

It is unbelievable that there is no lender to come up with BIG “Approve”. I would say there is technical issue or system failure.

However, I have just come back from a closing of purchase contract in Hillsborough, California, and it was 5% down payment, with a credit score is very similar to yours. We all know California real estate is considered to be “Stressed Market”, however, most lenders are still doing 3% down payment FHA loans with two appraisal report.

I would like to take a look at your application and let you know how I could be a help.

Sean Thorson
703 855 5030

Email: sean.thorson@wachovia.com

Please ask me send GFE.


Cheers,

TA

Sun Apr 20 2008, 16:05