Home Buying in 92648>Question Details

Bill, Home Buyer in spugadiccio

I'm currently trying to sell an income property in which I'm also an owner occupant . I want to take some of the proceeds and use it to buy

Asked by Bill, spugadiccio Mon Nov 30, 2009

a single family home . My question is , if I have a 40% down payment , a 800 or - fico score but my income tax statement for this year will show an income of around $80-90k .... about how much of a loan can I get - also what is the max amount you can borrow before you go into the "jumbo" catagory ? Thanks in advance . Just a general "ball park" answer should be ok .

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Hi Bill,
Like others have stated it is hard with so little information. However, working backwards from your income I was able to calculate some "ballpark" numbers. Below is an example that would be close to your max. This is assuming you carry no additional debt, 80K is documentable, and that you would get sufficient money out of your income property for this size downpayment.

Purchase price = $700K
40.4% downpayment = $283K
Loan amount = $417K (conforming max)
PITI payment $2979.44 (assuming impounds which aren't necessary with this downpayment and a 4.75% rate. That is no points today)

The above scenario puts you at a 45% DTI using 80K/ yr income and assuming you do not carry additional debt. If you do, that would have to be taken into consideration when prequalifying. Like John stated, The DTI on a conforming loan can go well above 45%........but then you are going into Jumbo loan territory.

Obviously, as previously stated, this is not a prequal with this limited information, but I hope this gives you a ballpark number to work off of. Let me know if you would like to personalize the numbers and I would be happy to help.

Take care,
0 votes Thank Flag Link Tue Dec 1, 2009
Conforming loan amounts in Orange County are $417k, Jumbo Conforming loan amounts go up to $729,750, and anything over that are the Jumbo's that I think you are referring to, and want to avoid as the rates are higher.

As to the amount you can borrow, most lenders require a Debt to Income (DTI)ratio of between 42%-50%, but exceptions can be made. I have a client buying now where the DTI is over 60%.

The DTI is calculated by adding your monthly principal, interest, taxes, and insurance (PITI) plus the minimum monthly payment of any other debt (car loan, credit card, etc.). You haven't given enough info to accurately answer the question as 40% doesn't tell me the $$ amount you want to put down. If I knew the amount you wanted to put down, then I could estimate a purchase price and from there calculate the PITI and let you know how expensive a home you would qualify for and what what size loan amount and monthly payments you'd be looking at.

Hope this helps and please call if you'd like to further discuss.

Thank you.
1 vote Thank Flag Link Mon Nov 30, 2009
Hi Bill,
I also endorse John Davis as an excellent resource, as recommended by some of the other responses you received. As another option, if you are not able to get approved for a conventional loan to do this, I can
refer you to a very reliable mortgage broker who has access to private money as well,
even if it's only a short term solution.
Please contact me if you'd like their information.

Best Regards,
Karen McEniry, Realtor, SFR, SRES
Coldwell Banker Beachside, Realtors
(714) 343-9470
0 votes Thank Flag Link Sun Feb 22, 2015
It's difficult to answer your question without getting all the facts, especially since you want to take some of the proceeds from the sale of your income property to buy a single family home yet not indicating what county or area you choose to buy your home. Location is a key factor to consider along with your source of income.

So until, all the facts are known, any ball park answer is meaningless. Find a Realtor to help and guide you to achieve your goals and objectives. You do want the correct answer, don't you? A professional will analyze and recommend the most suitable solution for you after all the facts are determined.
0 votes Thank Flag Link Tue Dec 1, 2009
Dear Bill:
Call or write John Davis. His info is listed below. You need a mortgage lender to help you get pre-qualified. Good luck!
0 votes Thank Flag Link Mon Nov 30, 2009
Conventional Loan is up to $417,000
0 votes Thank Flag Link Mon Nov 30, 2009
In Orange County, you could still get an FHA loan up to $729,500. The higher interest rate happens when you exceed a loan amount of $417K. With rates as low as they are, I don't think it's as huge of a difference in interest rate as you may be thinking.

There are many good deals to be had in downtown HB & there are many owners upside down, deeper discounts can be had with short sales vs. REOs most of the time, in my opinion.

Let me know if you'd like to discuss more. I also have a lender I like to work with, she's been in the business for 30yrs, her office is in HB, she can shop all of the banks for the best deal &/or fund loans in house. That's why I like using her, best of all worlds. She works after hours & on weekends like me, feel free to shoot her an email at ASpellman@StratisFinancial.com , her name is Arlene Spellman.

0 votes Thank Flag Link Mon Nov 30, 2009
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