Now all that you need to do is find a place to live and make an offer. There are tons of homes (not just condos) in your price range in the Valley. You may not know it, but you can also afford houses in some parts of L.A.. I recently wrote an blog called 'The Most Affordable Homes in Los Angeles: $500k and Less' that may be of interest to you.

http://www.trulia.com/blog/AJonesREALTOR/2009/07/the_most_af…

Please feel free to contact me if you have more questions or want me to run some property searches for you. Best of luck.

You and your parents will need to speak with a lender regarding the down payment and get prequalified through a lender of your choice. Usually parents with this much in assests have a banker they trust and would use for lending. If you are a first time buyer then you would qualify for the first time buyers tax credit that if part of the stimulous package. This credit will expire if you do not close escrow by November 30, 2009. You need to pre approve not just pre qualify. Good Luck on your house hunt.

Thanks Michael Young...now I have a general idea. I won't have any other debt besides the home loan, but I will have to factor in the HOA fees.

How much you can "afford" to pay can actually be irrelevant. In school, I could live on bread, cheese and top ramen, but lenders are going to be more strict in their guidelines:). No matter how much you put down, you still need to qualify for the loan. The lender will ask for your pay stubs and/or tax returns and base the loan amount on how much you make. Generally, you can expect the ratio of your monthly payments to income to be anywhere from 26%-38%, unless you have massive car payments, credit card payments, alimony or other obligations.

With 200K down on a 350K purchase, a loan of 150K at 5% will be roughly $1100, so you will need to "prove" income of at least $3500 per month. If the property has an HOA fee, you'll need to add this as well, then recalculate.

Thanks for all the answers....it's all very helpful. Regarding how much I can afford each month towards housing expenses, the $1154 is not a problem...my rent is a lot more than that living in a 1-bedroom in Encino. i do plan on using the entire thing as a down payment, and the less debt I have, the better.

The question is not how much you will need to borrow.

The question is how much can you afford towards your housing expenses per month?

Lets assume your purchase price is $350K, your parents gift of $200K, this means your loan amount is $150K. Assume your credit score is at least 720, assume the interest for 30-yr fixed rate is 5%, then the estimated monthly principal & interest is approx. $805. Property tax is approx. 1% of $350K divide by 12 = $292/mth. Homeowner insurance for 1,500 sqft interior living area is approx. $57/mth.

So, the "total" estimated monthly payment is $805 (P&I) + $292 (taxes) + $57 (insurance) = $1,154 (EXCLUDING recurring expenses such as food, gas, utilities, etc.) Can you afford this estimated monthly payment - $1,154 (plus recurring expenses)?

What is the amount of your "maximum budget" compare to the estimated $1,154?

At the moment, to buy a home, most banks are looking for 20% down payment. This means you do NOT have to allocate 100% of your parents gift towards the down payment. I suggest you keep some of the gifts as your 6-8 months reserves for unexpected repairs and maintenance for the home.

I agree with some of the earlier suggestions ... find an experience loan officer from a direct lender such as Chase, BofA, Wells Fargo, etc. to help you pre-approve first, then you will know how much you can by based on your income and affordability.

I can recommend Dexter Stanly at Chase Bank at (714) 921-6706. Dexter is a loan officer for +12 years and he can help you with conventional loans, Fannie Mae, Freddie Mac, FHA or VA (if you are a US veteran.)

I hope the information helps

Email: Contact@ActusPropertySolutions.com
Phone: (626) 529-3072

I can get you pre-approved at no cost to you.

Witha pre-approval in hand you can shop with confidence.

Please do not waste more time. Time is running out.

Hi Mymammoth,
We are dealing with a very competitive market these days, so you definetely should get pre-approved. Then you are ready to make an offer. You can talk to the lender and tell her/him how much down payment will be. If you have $200-$250K to put down, it will make your offer pretty strong, but you still have to compete with other offers. I work with some excellent lenders who can also help you with all the benefits of being a first time home buyer. I am very familiar with the San Fernando Valley, and my office is in Sherman Oaks. I'll be very happy to help you with your search.
Best regards,

Liliana Alfonso
Dilbeck Realtors
Sherman Oaks, CA 91403
liliana.alfonso@dilbeck.com
818-414-0396

Speaking to a direct lender is a great idea. This means a lender who can "fund" their own loans. My lender is with Stratis Financial, they do fund their own loans however they can also Shop all the wholesale rates FOR the major banks like Wells Fargo, Chase, Bank of America etc. You do need to speak with a lender though. I am sure they're not going to be able to qualify you by yourself because your parents are giving you more than 50% down out of their funds, not yours to purchase the home. They will probably have to be considered co-borrowers to you.

If you would like a reference to my direct lender, just shoot me an email or give me a call.

emilyknell1@yahoo.com
562-430-3053 cell

You would finance and qualify for the remaining amount over and above your down payment.

Any financing questions feel free to contact me.

Good luck.

You'll need to get pre-approved. A pre-approval is a more thorough process than a pre-qualification because it involves a more thorough overview of your finances. I recommend speaking with a major, national, direct lender, like Bank of America, Wells Fargos, etc. When making an offer on a home you'll likely be competing with other bidders and you'll have to demonstrate strength based on your downpayment and ability to get a loan - and therefore actually purcahse the property.

During the escrow process you wire your downpayment funds to the seller via escrow and your lender wires their funds.

You can get pre-approved for a certain amount, but you don't have to borrow that amount, thats just the maximum that the bank will lend to you.

I can recommend you to a lender who will give you a great rate and terms, and I can help guide you through the whole process.

Richard Schulman
REALTOR
310-482-0173
Keller Williams Realty
schulmanrd@yahoo.com http://www.RichardSchulman.com