Home Buying in Los Gatos>Question Details

K, Home Buyer in 95032

First Time Homebuyers Looking To Purchase a Home in the LG Mountains

Asked by K, 95032 Sun Feb 9, 2014

We are a first-time home buying couple looking for a property in the LG mountains. We are looking in this area because we currently reside at my parent's house in 95032, but we have seen huge lots in 95033 (we need a lot of land; 4 cars and 3 dogs). We have both been at our jobs for a year (myself, a little more than a year), and we are students as well. We had read from a realtor (don't know how accurate it was) that if within the 24-month verification period, if that involves school, it can count towards the verification process. Is this true? We are looking to see how much we can afford, we currently have about 20k saved up and we each make 3k monthly. Will we be approved for a loan, FHA? Can we be approved together (not married)? What about USDA loans in the Los Gatos Mountains; are there any? Could I purchase a piece of land and have a LivingHome (http://www.livinghomes.net/primer.html) built? USDA loans don't qualify with mobile homes; would a LivingHome count as a mobile home?

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k, 95032:

First, a USDA loan can be used to buy a manufactured home such as the Livinghomes.net style or any HUD coded home that comes on a trailer and gets set onto a foundation. The key for the latter is that it gets permanently set on a foundation with a building permit and an occupancy permit signed off by the county. With this in mind, your options widen and your expenses lessen.

Whether a property is USDA eligible depends on whether it is within an MSA (metropolitan statistical area) or in a "rural area", meaning outside of an MSA. Parts of the Los Gatos Mountains are in rural areas. You can go to http://www.Usgeocoder.com and enter any address. Then look at the tabular results to the left of the map, expanding the plus signs. Toward the bottom of the table, you can see if the property is in a rural or MSA designation. My wife's company owns USgeocoder.com and I designed most of the data side of that website, so I am quite interested in your user experience of it.

You can apply for a loan together even though you are not married.

Whether your schooling can count toward your employment history so that you only need one year of employment depends on what you were studying and how it relates to your current job. This is a case by case issue that you need to discuss with either me or a lender, such as John Hanson at 408-281-8383 of High Tech Lending. Mr. Hanson has experience lending in the Los Gatos Mountains and is familiar with the peculiarities of USDA and FHA loans for that area. High Tech Lending is a direct lender, so you won't pay a broker fee.

Generally speaking, your total monthly debt payments including the proposed mortgage must be under 43% of your adjusted gross income for FHA loans and 41% of your adjusted gross income for USDA loans.

Whether you can purchase a piece of land and put a home on it depends on whether building site approval has been obtained for the land, whether there is a history of a home having been on the land, zoning, where the land is with respect to watersheds, whether there are any endangered species on the land, and many other factors in addition to the price of the land and the size of your down payment. One factor is whether your realtor can convince a landowner to "carry back" on the land, which means whether the land seller is willing to act as your bank and pay him/her over time toward the purchase of the land. This is common with bare land.

How far away from Highway 17 are you willing to live in the mountains? The answer to this question will largely determine if there is any land you can afford to buy and eventually succeed in building a house on it.

I have represented several buyers and sellers in the Los Gatos mountains and would be interested in meeting you over a cup of tea or hot chocolate in Los Gatos. By the end of the conversation, you'll know whether you have a path to home ownership in that area or not.
Please call me at 408-639-0211 or email me at mitchell@handsonrealtor.com.

Mitchell Pearce
408-639-0211
mitchell@handsonrealtor.com
2 votes Thank Flag Link Mon Feb 10, 2014
Hello K,

Some great research questions!

Lets begin with the job history. Since you have both been working for a year, it is likely that the lender will allow this income. Typically, lenders want a 2 year history, but since you are both students this can be handled.

USDA loans are usually for rural properties (classified as properties that are significant distances from services. The Los Gatos Mountains are close enough that I do not think they would qualify.

FHA is a good fir considering you are looking to put a low down payment into the transaction.

There are also some conventional programs (5% down) that could be a good fit without the high cost of mortgage insurance.

You can purchase a piece of land, but getting a lender to do a living home loan with so little down is unlikely.

I am happy to talk with you in further detail to ensure you have reviewed all options.

Best,

Eric Nelson III
Sr. Mortgage Planner
SVC Funding
http://www.campbellmortgagebroker.com
NMLS # 120412
408-268-2442
1 vote Thank Flag Link Sun Feb 9, 2014
Thank you, you have been the most helpful!
Flag Mon Feb 10, 2014
You really need to sit down with a lender to see what you qualify for. As for the raw land it requires much more of a down payment than a residential property. With $20K to put down you will have to go with a FHA loan that only needs about 3% down. The Los Gatos mountains sounds like a great place to look considering your needs and budget. I know the mountains an properties there so let me know if I can help. Good luck,
1 vote Thank Flag Link Sun Feb 9, 2014
You have to sit down with a lender to discuss your options. It is free and you can talk to more than one lender to find the best solution.
Web Reference: http://talisrealestate.com
1 vote Thank Flag Link Sun Feb 9, 2014
A meeting with a lender is advised. You have a lot of questions regarding qualification and the answers can not be answered generically.

If you have not meet with a lender I have a great local direct lender I can refer you to.

The mountains have their own concerns and when you are ready, I'd be delighted to sit down with you for a free consultation.
1 vote Thank Flag Link Sun Feb 9, 2014
I would be more than happy to get you pre-approved. Just send me an email with any further questions you have and we can get started.

Alex Greer Loan Officer NMLS #1056079 http://www.TheMortgageOutlet.com 408-352-5147 AGreer@TheMortgageOutlet.com
1 vote Thank Flag Link Sun Feb 9, 2014
Hi K,

I would be happy to assist you.

You can reach me by email or phone.

~ Best wishes, Elva A. Wormley, Mortgage Consultant, (408) 615-8500, elva@elvawormley.com,
C2 Financial Corporation, 2845 Moorpark Avenue, Suite 209, San Jose, CA 95128, NMLS #331981 / BRE #01274093
1 vote Thank Flag Link Sun Feb 9, 2014
Your first step should be to sit down with a lender who can review all of your financial info. They'll be able to help you determine what you qualify for, what loan program is best for you, etc. I know several lenders licensed in CA. I you want to message me directly, I'd be happy to give you their contact info.
1 vote Thank Flag Link Sun Feb 9, 2014
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