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.
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.
1st Metropolitan Mortgage
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.
415 462-2777 office
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.
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.