Young professional couple, planning to buy our first home.

Asked by Crazepeony, San Francisco, CA Sun Mar 11, 2012

We both make 6-figures, interested in something under 1M in SF or the Peninsula. We can put 100K down, but are wondering if that's necessary. We heard there are first time homebuyer programs that will allow you to put 3% down. Please advice.

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Matthew Goul…, Agent, San Francisco, CA
Mon Mar 12, 2012
Yes, as others have noted their is the FHA program but as stated there are other issues raised when competing with other offers as many homes do in San Francisco.

Depending on where you are thinking of buying there are some 10% down options without the mortgage insurance (this is the additional premium paid for a higher risk loan) and consider this as upto 1% added to you interest rate. Donig the math, if you borrow $700 K and compare the extra money you will pay out for several years you would most likely better off going on a conventional loan.

Talk to a mortgage broker and get pre-approved to know your options that work best for your lending side, and then a Realtor to review your options and chances of sucess in the market you want to buy into.

Call if you need anything else,


1 vote
David Tapper, Agent, Burlingame, CA
Mon Mar 12, 2012
If you qualify, you can get a loan with 3.5% down up to $729,000 + -. It depends on your ability to repay the loan, your credit and your job history.

If this is the case, by using $100K down, it sounds like you can purchase close to a $800,000 home.

Ask a friend, relative or coworker to refer you to a real estate agent or try picking one on Trulia and have that agent refer you to a mortgage professional.

If you need a referral, free to ask. Congrats on deciding to buy a home.


1 vote
Rob Regan, Agent, San Francisco, CA
Sun Mar 11, 2012
Note that FHA loans with the 3.5% down payment are easiest on Single Family homes that are in good shape. You're not going to get a fixer, and if you're looking at Condos the complex will either have to be FHA approved already, or the HOA will have to go through a long painful process of getting it approved while you and the Seller wait. There are other loan programs like VA loans for veterans, but they are fairly similar to FHA loans.

As at least one person noted below, while FHA loans will allow you to hang onto a lot of your cash, your monthly mortgage payment will be a lot higher - partly due to the higher loan amount, but also due to PMI which means your effectively interest rate will be a lot higher. To end the expensive PMI payments you usually have to pay off enough of the loan to make your Loan to Value ratio 80%. So you could be stuck with the high payment for a while.

There are plenty of neighborhoods with $750,000 single family homes, but obviously your options go up as your price range does. As most said below, speak with a lender and fully explain your situation and questions.
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1 vote
Lance King, Agent, San Francisco, CA
Sun Mar 11, 2012
You may be able to get into a house with 10% down in this price range, but we haven't had anyone try that in a while so I'd have to check with our lenders. Also, while putting less down may be more attractive to you, in a competitive offer situation all else being equal you will lose with less down.

I highly recommend you talk with some lenders you can trust to get all your options. We work with three who are honorable, reputable, super responsive, and will give you the V.I.P. treatment if you mention our name. Drop me a line and I'll be happy to send - contact info is below.

Best Regards,

Lance King/Owner-Managing Broker
DRE# 01384425
1 vote
Robert Chome…, , San Diego, CA
Sun Mar 11, 2012
The max you could with 3.5% down would be $756,217 in purchase price, as the FHA loan limit in SF County is $729,750. Conventional would even be lower with 3% down. The best you could do is a 10% down program that could get you close to $1m purchase price. You need a 760 middle credit score for this special program.
1 vote
Helen Yuen, Agent, Oakland Ca 94605, CA
Sun Mar 11, 2012
If you both make 6 figures, it would not be advisable to go for a FHA 3.5% loan that caps
the loan limit at $729,500 and require a mortgage insurance. You will get a large and beautiful
home with the amenities and qualities you want while the market is great for buyers rather than limit
your loan to $729,500. With a 20% downpayment, you will be borrowing less and your monthly mortgage will be less. Just note that mortgage rates are already super, in some cases, below
4% so this is a great time to shop and buy.
(As a note, if you live in your home for at least 2 years, a married couple can for go a $500,000
capital gain tax when ready to sell). All the other realtors are sincere and correct - I just wanted to give you my personal opinion.)

Helen Yuen, Land & Property Investments, Inc. SF (415) 469-0577
Call or e-mail me for an appointment with a mortgage loan consultant in my office and/or for
a list of homes on the market in your price range at no cost.
1 vote
Michael Hopk…, , San Francisco County, CA
Sun Mar 11, 2012
Sellers generally feel more confident with a larger downpayment, just as lenders do. Bringing more equity to the deal creates a lower loan to value ratio, and may make the loan easier and faster. FHA loans can be obtained for as little as 3.5% but often carry a higher interest rate and require mortgage insurance, so you really have to analize the different scenarios with your loan agent and your tax professional.
1 vote
Lizete Santos, Agent, San Francisco, CA
Sun Mar 11, 2012

I recommend you speak with a mortgage professional to discuss the various options that are available based on your individual finances and goals. In some instances it may be beneficial to put a considerable amount down for a better rate.

Here is a referral:
May Montana at Guarantee Mortgage

Web Reference:
1 vote
Jed Lane, Agent, Petaluma, CA
Sun Mar 11, 2012
There are lsots of first time buyer programs in many locals. SF has them and so do a number of towns on the Peninsula. The best approach is to decide on the area you want to live in and then I'd put you in touch with a lender that is experiecned in those programs in the specific area.
Some programs, outside of the FHA, have very different criteria and will work for some people but not for others.
The FHA lending sets max amounts based on zip codes with the top end set at $729,500 and they allow 3.5% down. You need to pay mortgage insurance and there are guarantee fees involved also.
Obviously you can call me if you'd like.
1 vote
Matt Ciganek, Agent, San Francisco, CA
Sun Mar 11, 2012
Hi-The long and short of it is that you are most likely going to be putting down 20% or more for a house in that price range! No getting around it, but there are some ways to get second mortgages to make up some of that difference. The good news is that rates are very low and therefore the cost of borrowing has rarely been better on a historical basis. FHA loans require expensive mortgage insurance and have a maximum loan amount that will be lower than the size of the loan you are looking for. Current conventional loans require 20% down.

What you really need is a conversation with a good loan officer to help you decide which type of loan would be the best for you. After that, you'll be able to work with an agent to help you find a home in an area that makes sense for you. The markets you are talking about are really busy right now and sellers have the upper hand. After getting pre-approved for a loan, a good agent will be crucial in your efforts to find the right home. Contact me if you'd like some names to get you going on loan info or talk about how you can successfully find and purchase the right property. Best of luck-Matt

Matt Ciganek
Barbagelata Real Estate
1 vote
Linda Landry, Agent, Tucson, AZ
Sun Mar 11, 2012
YPC speak with a local real estate agent and obtain contact information for a loan officer who can advise you specifically based on your financial situation after discerning how much you would like to pay monthly (PITI=Payment,Interest,taxes,insurance).
This will assist you in determining how much you need to contribute as a down payment as well as how much money you will need to reserve for closing costs.
1 vote
J Mario Preza, Agent, Daly City, CA
Sun Mar 18, 2012
Hi "Young professional," this may add to the already overloaded gusher of information your question elicited, but you asked for it... While any of the professionals on this site (and even those not on this site), can do a fine job for you in finding a house, some can even help in financing a house, but given your already "confirmed" ability to buy, if you're looking for a little advice and/or direction on how to proceed, the first step would be to get informed about the things that matter to you the most, and let the professionals (you choose) guide you through those that are no less important, but tedious to say the least. If you emphasize the top range in price you're considering, you may want to explore this from another vantage -- how much do you want to pay monthly (versus how much you can afford to pay), those two numbers are not necessarily the same.

As for where and what you'll wind up buying, take it slow, prices are fairly stable presently, and banks not as flexible with certain lending requirements, but you're in a very good position. I said something similar to an investor not too long ago, "you have the money," and sellers abound, so don't jump on the first house that "seems" to meet most of your conditions, but do move quickly and prepared on the one that is your top choice, because like you, there are many people looking to buy -- some with ALL CASH!

Talk first with a lender who can evaluate your circumstance(s) without committing with anyone until you're certain that the persons with whom you're dealing are a good match -- almost like finding a "soul-mate," you go through some experiences before you find the right one (maybe). Afterwards, or even in conjunction with that process, you're going to meet up with real estate agents -- many who are as capable as the next fellow, but, just like the other advice, take time to do a little homework, and/or talk enough to determine whether there's a good match or not.

Hope that gives you something to work with... Good luck.
0 votes
Jeff Teperme…, Agent, San Francisco, CA
Mon Mar 12, 2012
Hi there,

I much agree with the brokers advice below: a higher then 10% down-payment will make your offer more attractive in a competitive market. As to the mortgage source, we all work with respected mortgage brokers. If help is need, please contact me directly @ 415-722-6249 /
Web Reference:
0 votes
Jack Mclaugh…, , San Francisco County, CA
Sun Mar 11, 2012
The only person you should be asking is your account. What you're asking isn't a simple yes or no question. There are just to many unknowns. I would say this probably isn't the best forum for getting the answers you need.

If for some reason you don't have an accountant, I know a few good ones who would be more than than happy to help.

Jack McLaughlin
0 votes
Oggi Kashi, Agent, San Francisco, CA
Sun Mar 11, 2012
You can qualify for an FHA loan with as little as 3.5% down. The new FHA limit is around $729k so that would mean a purchase around $755k. There are other options so feel free to contact me for details. 

Oggi Kashi's iPhone
Paragon Real Estate Group
415 . 690 . 3792 - M
415 . 874 . 5020 - O
0 votes
Ellie Kravets, Agent, San Francisco, CA
Sun Mar 11, 2012
Hi Dear,
I'd be happy to help you!
So many things to talk about-please contact me
Let's meet in person and I'd be glad to invite our in-home mortgage advisor to join us.
Look forward to meeting with you soon.

Ellie Kravets
Realtor, TRC,GRI
Climb Real Estate Group
0 votes
The Lancedan…, Agent, San Francisco, CA
Sun Mar 11, 2012
In my opinion, if you both are in "very" stable positions with respect to work you should consider leveraging as much as you can afford. Meaning, your first step should be connecting with a mortgage Broker or direct lender THEN start interviewing real estate agents and in that order. This way you don't waste your time believing the mortgage calculators and start looking at properties out of or below your range. Information is power as you both know. There are programs out there for first time buyers however, they are designed for lower income levels and not six figure levels. FHA with their 3% down programs might work for you which in turn allow you to stay more liquid with your funds. They do cap the purchase price at $729,000 I believe. As a native of the city and someone that has been doing this for many years, I believe following these basic steps can assure a more happier home buying experience...and it should be fun. Best of luck to you both. Cheers!
0 votes
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