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scrubrider · Joined: 12 Oct 2009 Posts: 1 1.36 Dollars($)

I have my own business. This year I will earn approximately $200,000. Last year I earned approximately 160,000. I'm looking at a house that is $850,000. The sale of my current home will net me approximately $50,000 to put down on the new home. Is a loan of this size possible for me? Do I need to save up more money for a down payment prior to purchasing? If I am able to qualify for a loan, would it have to be a nonconforming type of loan? What would the approximate interest-rate be?

sunnyca2009 · Joined: 04 Aug 2009 Posts: 1731 35.55 Dollars($)

When a lender looks at yoru incoem for the last two years, they will take an averge for the last two years.

From a down payment, you may need to come up with little more than what you have mentined to meet max loan limitation

Also this will be a jumbo loan

Interest rate will be based on yoru income, downpayment, amount you borrow, your credit history and also on your debt to income ratio

You can try using some of the calcualtors on this forum

jenkin7 · Posted: Tue Oct 13, 2009 2:50 am Post subject:

Hi scrubrider,

Your income for the last two years looks good. But you have not mentioned your credit score. It is one of the key factors these days. You need to have good credit score to qualify for a loan with good rates and terms. A down payment of $50,000 is quite good, but it is just over 5% of the home price. It would definitely be better if you can arrange for a down payment of at least 10%. This will reduce the interest rate on your loan.

As far as the conforming loan limit is concerned, it has been set at $729,750 for single family units. If you want to loan of an amount higher than that, it is likely that you will have to go for a non-conforming mortgage. The interest rate on the loan depends on various factors like down payment, your credit scores, the number of discount points you pay upfront etc.

What I can suggest you is, go for a no obligation free mortgage quote with the lenders in this community. They will check your credit scores, income etc. and will offer you free mortgage quotes. This will help you get an idea about what type of interest rates you can expect to get on your mortgage. You can then contact your local lenders and look for mortgage quotes from them as well. This will give you a lot of options to choose from and you can pick the one that best suits your requirements.

jveenstra · Posted: Tue Oct 13, 2009 10:58 am Post subject: Mortgage

The mortgage is over $417,000, so, it is a jumbo loan. The down payment is about 5%. Any down payment less than 20% requires private mortgage insurance (PMI). The PMI companies have problems as do mortgages and partcularly jumbo mortgages.

The secondary market has pretty much disappeared for jumbo mortgages. The portfolio lenders that use their own money are available but they typically require down payments of 20% to 30%. PMI is not available for jumbo mortgages over $729,750 and then only with a 15% down payment.

The jumbo mortgage up to $729,750 is available in 73 counties in the United States, so, the property would need to be in one of those counties. This loan limit is for 2009 and has not yet been renewed after this year. It may be, but, not done yet.

Is the income you quote gross income or net income after expenses? Mortgages average the last two years net income.

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