Financing in San Francisco>Question Details

John, Home Buyer in California

Mortgage Question....

Asked by John, California Tue Apr 22, 2008

My wife and I make $210,000 gross annually with credit scores each of 800. We are looking to purchase a $589,000 townhome with a 7-10% down payment. We have approximately $2200 a month in student loans, car loans, etc. Are there loans up to 90% of the home value with no PMI? Do 2nd mortgages exist any more or are they significantly dried up? Are we in the right ballpark in terms of our purchase price or would we qualify for more? Does anyone know of any reputable mortgage consultants in the Bay Area? Thank you, in advance, for your advice.

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Buying a home is about you, not about what a calculator or anyone tells you could qualify for. If anyone tries to push you to buy a home in a more expensive area because you have the income for it, be very careful.

Your income is good but it depends on what you are doing to retain that money and how much you have been able to retain. I see that you have student loans that are really high and could actually be someone's mortgage.

I would not be too worried about PMI because that is a very small amount of money in your mortgage each month. A knowledgeable and trustworthy loan broker could tell you and if it is required or that particular loan program, you have no choice but to have it. I don't trust a lot of the loan reps at any bank you could walk in because I have not yet been impressed by one. (It really takes a lot to impress me when it comes to knowledge about real estate, laws, financing and customer service.) Well anyway, back to your question --

You should focus on where you want to live, how much you want to pay per month (but be realistic about it). For a condo or townhome, expect to pay HOA fees. Some would say those fees are not useful or helpful -- they are misinformed or they could be right. "Useful" could be defined in so many ways and it really takes someone who knows what HOAs do to help you understand what you are paying for and why an HOA exists.

I work with only a select few mortgage professionals. I've had experience originating loans so I still have good connections. First things first, concentrate on your budget, lower your bills, make sure you have enough cash reserves and make sure you are able to manage a house payment if, worse case scenario, one of you stops working.
1 vote Thank Flag Link Fri May 2, 2008
I am not familiar with any lenders in your area. I am not aware of using a 2nd for downpayment anymore b/c of all of the subprime issues,etc. I think you are ok with your purchase price. I would try to save some more and put down 20% if you don't want PMI. Or you could refinance later.
0 votes Thank Flag Link Thu Jun 5, 2008
Please Sean Thorson at 415 438 0923. or email at . I would love to go through all options you have with Wachovia. The FHA is always mortgage insurance. There is no way you can escape the PMI. Yes you can put as little as 3% down, but it is not that cost effective when it comes closing cost.



p.s: since San Francisco is considered to be stable market Wachovia offers one loan up 90% with no PMI. It is called Jumbo Extra. You would not have to pay PMI, and it has got to be full documentation should you a first time home buyer.
0 votes Thank Flag Link Thu Jun 5, 2008
hey john, with credit and income like that you pretty much have a hard time finding a bank not willing to do that!!! well not reall, alot of banks look for more than a 7-10% down payment but i do know of plenty that will let you go higher into the equity of the home with no PMI. please send me an e-mail at and i will be happy to work up some numbers for you.
-James Reusing
1st Metropolitan Mortgage
0 votes Thank Flag Link Wed Apr 23, 2008
John. If you are he 1st time buyer, I suggest you to look at the Governmet programs i.e. FHA, you can get loans as low as 3-5% down. Your debt ratio should be 55%-45%. They will require PMI but when the equity raises ( say up to 20%) you can request to cancel it. I'm working with some of the best FHA talanted brokers - call me with questions,

0 votes Thank Flag Link Wed Apr 23, 2008
Dear John,

I asked Tim Wood, a terrific mortgage broker, to respond to your questions. His answer is below.


Sally asked if I would answer your questions. My name is Tim Wood and I am residential mortgage broker with Guarantee Mortgage. There are many options for your 10% down payment purchase. You will have no problem qualifying assuming you put 10% down, the purchase will be for your primary residence and you will have 2 to 3 months of the monthly housing expense in post close reserves. The lenders will allow you to use 75% of the value of your retirement accounts to meet this reserve requirement.

You can get one loan for 90% w/ mortgage insurance or get an 80% first w/ a 10% fixed or equity line second. I am happy to answer any questions you have related to the purchase.


Tim Wood

Guarantee Mortgage
415 462-2777 office
0 votes Thank Flag Link Wed Apr 23, 2008
Changes in Mortgage Business

Bank of America has cancelled their 'papersaver' program for jumbo loans, effective May 2nd. It was one of the only places left where you could get ez-qual financing with 10% down. After May 2nd, you will have to fully qualify for your jumbo loan, regardless of down payment.

They will still be doing conforming loans ($417,000 and under) on the papersaver program, and you can get a second on top of that as long as it is a smaller amount. That means you'll be limited to a combined loan amount of $833,900, and a minimum of 15% down payment. That will cover a purchase price up to $981,058, above that and you'll have to fully qualify no matter what program at Bank of America.

They have also changed their 'doctor loan' from 100% to 95% financing, up to a million dollars.

They are 'suspending' their 3yr/5yr/7yr programs too, due to the lack of buyers on the secondary market. So they are left with the 30-year fixed rate loans, and FHAs.
0 votes Thank Flag Link Wed Apr 23, 2008
One of the lenders who does purchase loans up to 90% without PMI in the Bay Area is Wilmington Finance. These are full documentation loan (you need 2 years tax return and W2s. You can do 2 loans, first and 2nd with Countrywide up to 89.9% Loan to Value (LTV). I would be happy to submit your scenario to both of them for approval and provide you with Good Faith Estimates.
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0 votes Thank Flag Link Tue Apr 22, 2008
Artur Urbans…, Real Estate Pro in Burlingame, CA
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