Buying a home in SF / mortgages question

New YYdb20
Dec 19, 2018 29 Comments

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!

comments

Want to comment? LOG IN or SIGN UP
TOP 29 Comments
  • LinkedIn / Eng
    goldbug

    LinkedIn Eng

    PRE
    Google
    BIO
    Full time coder and part time gold dealer.
    goldbugmore
    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.
    Dec 19, 2018 5
    • Apple Snut Ella
      Even that is questionable. That’s a lot of cash hanging around. It would set off alarms with my bank.
      Dec 19, 2018
    • New YYdb20
      OP
      Hmm, if it's my family contributing the source of money as a gift, do banks still see that as suspicious?
      Dec 19, 2018
    • Qualcomm
      surf’s up

      Qualcomm

      PRE
      Apple, Intel, Cisco
      surf’s upmore
      they just need to write a letter to the bank saying the money is a gift that they don’t expect you to repay.
      Dec 20, 2018
    • LinkedIn / Eng
      goldbug

      LinkedIn Eng

      PRE
      Google
      BIO
      Full time coder and part time gold dealer.
      goldbugmore
      If you have 2 months of bank statements showing those money in your account, you don’t need to explain anything.
      Dec 20, 2018
    • Gifts from parents are usually accepted by lenders and do not need to be traced
      Dec 21, 2018
  • Capital One shylar420
    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
    Dec 19, 2018 0
  • Salesforce End13dh
    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.
    Dec 19, 2018 0
  • LinkedIn / Eng
    goldbug

    LinkedIn Eng

    PRE
    Google
    BIO
    Full time coder and part time gold dealer.
    goldbugmore
    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.
    Dec 19, 2018 5
    • New YYdb20
      OP
      RSUs can count too? I understand cash bonus, but I thought stock wasn't a part of it
      Dec 19, 2018
    • New YYdb20
      OP
      My base is 180k, TC ~250
      Dec 19, 2018
    • LinkedIn / Eng
      goldbug

      LinkedIn Eng

      PRE
      Google
      BIO
      Full time coder and part time gold dealer.
      goldbugmore
      Yes, as long as those shares can be sold and show up on your W2. Most lenders can use your average W2 income from the past 2 years.
      Dec 19, 2018
    • New YYdb20
      OP
      I see, thanks for the insight. Would a signing bonus - something that is clearly not a recurring thing - count?
      Dec 19, 2018
    • LinkedIn / Eng
      goldbug

      LinkedIn Eng

      PRE
      Google
      BIO
      Full time coder and part time gold dealer.
      goldbugmore
      For this question you better ask the underwriter. But I think average of 2 years of W2 should work.
      Dec 19, 2018
  • TriNet AYwy24
    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
    Dec 19, 2018 1
    • New YYdb20
      OP
      Haha, I'll check to see if they're interested and get back to you ;)
      Dec 19, 2018
  • Qualcomm
    surf’s up

    Qualcomm

    PRE
    Apple, Intel, Cisco
    surf’s upmore
    better mortgage gave me the best offer in the market.
    www.better.com
    Dec 19, 2018 0
  • Facebook patrick_ur
    Recommend Zillow mortgage app. You can run numbers in seconds
    Dec 19, 2018 0
  • Apple Snut Ella
    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
    Dec 19, 2018 5
    • New YYdb20
      OP
      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.
      Dec 19, 2018
    • Apple Snut Ella
      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.
      Dec 19, 2018
    • LinkedIn / Eng
      goldbug

      LinkedIn Eng

      PRE
      Google
      BIO
      Full time coder and part time gold dealer.
      goldbugmore
      OP are your parents US residents? If your parents are US residents they each can gift you $11M (estate tax maximum) in their lifetime tax free. But you might need to file some tax forms with IRS.

      If they are non resident aliens then they can gift you unlimited amount tax free. You might also need to file some forms with IRS.
      Dec 19, 2018
    • New YYdb20
      OP
      They are not in the US in any capacity - physically or legally. I'll do more research into this. Thanks all for bringing it to my attention
      Dec 19, 2018
    • Yes you could have them transfer the funds to your account in your home country, before transferring them over to your US account. But you need to do this at least 2 months before you apply for a mortgage as your lender will want to trace the source of any large deposits within the last 2 or 3 months.
      Dec 20, 2018
  • New YYdb20
    OP
    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?
    Dec 19, 2018 2
    • New YYdb20
      OP
      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...
      Dec 19, 2018
    • LinkedIn / Eng
      goldbug

      LinkedIn Eng

      PRE
      Google
      BIO
      Full time coder and part time gold dealer.
      goldbugmore
      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.
      Dec 19, 2018
  • First Tech Credit Union / Consultant
    TT425

    First Tech Credit Union Consultant

    PRE
    First Tech Federal Credit Union
    BIO
    Mortgage Consultant at First Tech Credit Union Seattle Market
    TT425more
    With 180K based income, you can qualify up to $1.5M purchase price with 300K down without any outstanding debt on your credit report. Bonus and RSU are calculated on an average. If the down payment if from a family member all you need is a sign gift letter and transfer receipt to use the fund right away without having it sitting in your account for 2 or more months.
    Dec 20, 2018 0
  • Amazon Logick
    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
    Dec 20, 2018 0