I have a serious question about buying a home in SF and mortgages that I thought I'd ask this community for your experiences. My parents are able to contribute up to $400k for a downpayment, and my salary income is $180k. Roughly what can I expect for the kind of mortgage I can get (what is the ballpark max. home price could I possibly afford) and what's the general opinion on traditional lenders like banks vs. more 'startup'y lenders like SoFi and others? Thanks!
Shop around, based on your credit score situation some lenders can offer you lower interest rates. I’ve used JMV lending for my two mortgages. They are not the cheapest one, but they can close in 20 days which can be a winning factor when you bid for a place in SF.
33% to 40% debt to income ratio for principal, interest and taxes. Your monthly gross is $15,000 so max expenses are $5000 to 6000, assuming you have no other debt, i.e. car or credit card Ar current interest rates that seems to allow for approx. 800k in mortgage. Add the 400k down payment and your max house price is around 1.2MM
You can borrow up to roughly 5x your annual salary. So around $900K. You need to show 2 years of tax returns if that $180K includes bonuses or RSUs. If you don’t have 2 years of tax returns showing $180K each you can only use your base salary to qualify for a mortgage. Go with big banks such as Wells Fargo or Chase and let them compete for a lower interest rate. Small banks are usually more expensive.
RSUs can count too? I understand cash bonus, but I thought stock wasn't a part of it
My base is 180k, TC ~250
Are your parents in the market for adopting a child ? I will settle for 200k in downpayment , tell them it is a steal and my TC is 250k
Haha, I'll check to see if they're interested and get back to you ;)
better mortgage gave me the best offer in the market. www.better.com
Thanks for sharing everyone! I'm in no rush at all so I'm definitely going to try to shop around, but I'm a complete newbie on this and I'm not even entirely sure how to go about initiating the "shop around" process. How strict are lenders on debt-income ratio? Do you think it's possible to stretch it to buying a house worth $1.5mm?
Also, I'm hoping take a close look at how the market moves in 2019 because I'm smelling like things might finally truly go down, but then again, the same is always said year after year...
DTI is very strict and the maximum is around 45%. So you want to make sure you have no other monthly obligations or debts if you are trying to max out your mortgage.
1) check the fine print but the bank might not accept the 400k as your contribution and you will need to contribute a big chunk. 2) unless they are on the deed too, you may need to pay taxes on that 400k gift
Interesting, thanks for the insight. In my case, my parents are not in the US and not US citizens or taxpayers. Do you think a scenario where they transfer me funds in my home country (where there is no gift tax) and I then transfer those funds from my account in my home country to my account in the US work? Anyways, thanks for bringing this to my attention.
You would owe the taxes, not your parents. I think this would apply regardless of how you move the money around. Do a little research but you should definitely consult a tax accountant or attorney.
You probably want to put those $400K in a joint bank account with your name for at least 3 months. It will save your a lot of hassle explaining the source of money.
Even that is questionable. That’s a lot of cash hanging around. It would set off alarms with my bank.
Hmm, if it's my family contributing the source of money as a gift, do banks still see that as suspicious?
Just have your money settle for a year. If you transfer it now, you'll be ready to buy when you get serious about it
Recommend Zillow mortgage app. You can run numbers in seconds