Posted on: 28th Jul, 2009 10:44 am
Hello,
I am currently renting in the Silicon Valley. My wife and I are hoping to buy a place within the next couple years. The problem is that even with the economic downturn, we really can't get a nice place in the Silicon Valley (in a desirable area) for less than about $800-900k. Obviously that puts us out of range of even the FHA loan (up to $725k). We are saving diligently, and I think we'll have enough for about 10% down within about a year and a half. My question is whether people think that lenders will ease up and we'll be able to qualify for a jumbo loan at that stage (aware that we'll need to pay PMIs)? I am hopeful that we can do a 90% loan or an 80% loan with a 10% 2nd. I'm not sure if lenders are doing that at all now though. I would say that our jobs are stable, we have great credit and our combined income is about $225k, so we can afford the monthly payment, just will have difficulty coming up with a 20% down payment any time soon.
Thanks!
I am currently renting in the Silicon Valley. My wife and I are hoping to buy a place within the next couple years. The problem is that even with the economic downturn, we really can't get a nice place in the Silicon Valley (in a desirable area) for less than about $800-900k. Obviously that puts us out of range of even the FHA loan (up to $725k). We are saving diligently, and I think we'll have enough for about 10% down within about a year and a half. My question is whether people think that lenders will ease up and we'll be able to qualify for a jumbo loan at that stage (aware that we'll need to pay PMIs)? I am hopeful that we can do a 90% loan or an 80% loan with a 10% 2nd. I'm not sure if lenders are doing that at all now though. I would say that our jobs are stable, we have great credit and our combined income is about $225k, so we can afford the monthly payment, just will have difficulty coming up with a 20% down payment any time soon.
Thanks!
you are already in the range of 725K. balance 10% you can pay (provided propert cost is 800K).
Therefore, first step is to do a proper maketing and make a list of selected properties
If it is more than 800k, you can take personal loan or increase your credit limit to do down payment upto 20%. otherwise you can take gift from your family members, if possible
Therefore, first step is to do a proper maketing and make a list of selected properties
If it is more than 800k, you can take personal loan or increase your credit limit to do down payment upto 20%. otherwise you can take gift from your family members, if possible
The problems with the FHA limit are 1 - many of the houses I'm looking at are above that amount of $725k + 10% down, and 2 - many new properties do not qualify for FHA (as they are in a complex).
Can you elaborate on what you mean by increasing my credit limit? Do you mean a line of credit/home eq? I thought those were not available anymore.
Unfortunately, family member gifts are not an option right now, as our families are in tough financial situations with the recession.
Can you elaborate on what you mean by increasing my credit limit? Do you mean a line of credit/home eq? I thought those were not available anymore.
Unfortunately, family member gifts are not an option right now, as our families are in tough financial situations with the recession.
you can save some more money to increase your credit limit
Yeah, but saving for 20% here will take us about 4 years, instead of 2. We're hoping to get into a nice place in a couple years, before we have kids
bayareahomeseeker
One thing for sure will change in 2 years woudl be the inerest rate. Probably they will go up, since the goverment has flooded the market with tons of money
Secodn factor, Do you think that these $800k+ houses are goign to stay at the same price in 1 and 1/2 or 2 years. I do not think so.
Prices houses will probably start goign down atleast 10-15% in the next 1 to 2 years. Especially due to Alt-A loan resets whihc are expected to happne in the enxt 2 -3 years
Your doing the right thing by saving for down payment(10%), which could potentiallly/automatically become 15% when the prices start goign down
Hang on there and wait a little. You are not goign to loose anything
Good luck and feel free to ask
One thing for sure will change in 2 years woudl be the inerest rate. Probably they will go up, since the goverment has flooded the market with tons of money
Secodn factor, Do you think that these $800k+ houses are goign to stay at the same price in 1 and 1/2 or 2 years. I do not think so.
Prices houses will probably start goign down atleast 10-15% in the next 1 to 2 years. Especially due to Alt-A loan resets whihc are expected to happne in the enxt 2 -3 years
Your doing the right thing by saving for down payment(10%), which could potentiallly/automatically become 15% when the prices start goign down
Hang on there and wait a little. You are not goign to loose anything
Good luck and feel free to ask
Thanks for your feedback. I agree that the home prices will go down more and that now is not the best time to buy. Sometimes it does seem like the desirable areas of the bay area are somewhat immune to the housing downturn, as there is so much money in the area (even now), with the Google multimillionnaires and all the VC/hedge fund managers. Still, at the same time, I've been observing that many houses are priced against comps from before Sept/Oct 08. These homes are typically on the market for a while and the sellers are having to lower their prices at least 10-20% to sell.
I understand that the interest rate will go up and I can live with that. It may actually make sense for me to do a 5-year ARM when it comes down to it. Buying now is simply not an option as I don't have anywhere close to 10% currently, and I have significant debt to pay off before I purchase.
I understand that the interest rate will go up and I can live with that. It may actually make sense for me to do a 5-year ARM when it comes down to it. Buying now is simply not an option as I don't have anywhere close to 10% currently, and I have significant debt to pay off before I purchase.