Average down payment on new and resale Irvine homes

[irvinehomeowner]

If you are in a sharing mood... how much did you or someone you know put down on their Irvine home... new or resale?

On my first home, I put down 5% (but homes were really cheap back then), on our last 2 we put down 20%.

After losing money on our last one... I don't think I want to put 20% down ever again (although we may have no other choice).

 

[usctrojancpa]

If you are in a sharing mood... how much did you or someone you know put down on their Irvine home... new or resale?

On my first home, I put down 5% (but homes were really cheap back then), on our last 2 we put down 20%.

After losing money on our last one... I don't think I want to put 20% down ever again (although we may have no other choice).

75% of my buyers are putting down between 30-60% down.

 

[irvinehomeowner]

Tell them not to buy in Irvine... they are just keeping the prices high.

 

[Irvine2Irvine]

Tell them not to buy in Irvine... they are just keeping the prices high.

You have to have 30-60% down in order to have a reasonable mortgage in Irvine, unless you buy a small and  old home.  It's sad but a reality.

If you buy a newer, larger house with 20% down, you need to get a $700K+ mortgage before the $5K mello roos and association.  How much income do you need to qualify for that???

 

[usctrojancpa]

Tell them not to buy in Irvine... they are just keeping the prices high.

You have to have 30-60% down in order to have a reasonable mortgage in Irvine, unless you buy a small and  old home.  It's sad but a reality.

If you buy a newer, larger house with 20% down, you need to get a $700K+ mortgage before the $5K mello roos and association.  How much income do you need to qualify for that???

Working backwards, their income needs to be $12.5-$15k per month assuming little or no other debt going up to a DTI of 40%.  This assumes a mortgage rate of 4.25% with a loan amount of $700k to $729,750.  The monthly all-in payments would be around $5,000 per month (pre-tax) for everything.

 

[akim997]

let me tell you...  $15K per month in Irvine ain't jack s!@# anymore...  I'd say target income needs to me in the $20K per month range before someone even thinks of taking a mortgage that large!!!  $20k per month... you are taking home $11-12 after tax.  $5K for housing... and you have $6-7K for everything else in life, including the hope that one day you'll be able to retire without the need to rely on social security...

 

[usctrojancpa]

let me tell you...  $15K per month in Irvine ain't jack s!@# anymore...  I'd say target income needs to me in the $20K per month range before someone even thinks of taking a mortgage that large!!!  $20k per month... you are taking home $11-12 after tax.  $5K for housing... and you have $6-7K for everything else in life, including the hope that one day you'll be able to retire without the need to rely on social security...

I agree, but $12.5k-$15k would make things pencil out for a lender assume no other debt.  $15k-$20k in gross income per month for a dual income household isn't that uncommon, especially in Irvine.

 

[readytobuy]

wow someone here put down FCB...

 

[mikeirvine]

I put down about 70% cash and about another 150K cash upgrades + some new furniture.

M

 

[irvinehomeowner]

After losing money on our last one... I don't think I want to put 20% down ever again (although we may have no other choice).

I don't understand (unlesss it was a short sale). Would you have lost less money when you would have put down < 20%? I put down > 20 %.

We sold our last home for less than what we bought it for, so we lost a good chunk of our 20% down.

And in these tumultuous times... I would rather be more liquid.

 

[panda]

After losing money on our last one... I don't think I want to put 20% down ever again (although we may have no other choice).

I don't understand (unlesss it was a short sale). Would you have lost less money when you would have put down < 20%? I put down > 20 %.

We sold our last home for less than what we bought it for, so we lost a good chunk of our 20% down.

And in these tumultuous times... I would rather be more liquid.

IHO, quick question. If you don't want to put a lot down, are you planning on getting a $700,000 jumbo loan when the time is right for you to buy in Irvine? I admit, I was wrong thinking that mortgage rates can't get any lower... but "WHAT IF" rates start spiking upwards after the elections? Just curious on your planning?

 

[irvinehomeowner]

Quick answer: Yes. However, I don't want to have to go up to the $729k limit, I would rather be in the low $600s for a cushion. Which may mean out of Irvine if I want the big 3CGW and view lot. Otherwise, maybe have to settle for a 2CBG detached condo in a premium area like QH... or LC (hopefully rates stay low until then... although 2013 would be AFTER the elections).

I do know that if I can get our kids into a public school... we can probably save quite a chunk of change in the next 3 years... but I still wouldn't drop it on a home... I'm not a baller like Mike... heh.

 

[panda]

Quick answer: Yes. However, I don't want to have to go up to the $729k limit, I would rather be in the low $600s for a cushion. Which may mean out of Irvine if I want the big 3CGW and view lot. Otherwise, maybe have to settle for a 2CBG detached condo in a premium area like QH... or LC (hopefully rates stay low until then... although 2013 would be AFTER the elections).

I do know that if I can get our kids into a public school... we can probably save quite a chunk of change in the next 3 years... but I still wouldn't drop it on a home... I'm not a baller like Mike... heh.

IHO, not to get too personal with the questions, but do you have a mortgage on your current home that was a rental before? You have to make sure that your debt-to-income ratio supports your current mortgage and the new the low $600k mortgage. I am going to guess that your income has to be above $250k? SGIP, could correct me if i am wrong, but banks have gotten super strict on rental income. For example, if you get a tenant for your current property 2 months before you get close on your new home, the banks will most likely not give you credit for the rental income. They usually want to see proof that the property has been rented the year before on your schedule E. Just sharing what i've experienced this year. I am assuming that's why so many FCBs put down so much in Irvine. Their income may be low but they have some serious savings. In 2010, high income is king when getting a loan. I don't think banks care as much that you have million dollars sitting in the bank or that credit score is near perfect. Just my opinion.

 

[nytransplant]

You have to have 30-60% down in order to have a reasonable mortgage in Irvine, unless you buy a small and  old home.  It's sad but a reality.

In my current hunt for a mortgage I have not been quoted an improved rate for more than 20% down on a SFR (the brookers say that sometimes more than 20% down for condos gets a slightly better rate).  That being said I'm aiming for a 20-30% downpayment to take advantage of the low rates

 

[irvinehomeowner]

@Panda:

Yeah... I've been keeping up with your plight and we've already been told we will not receive credit for our current home when we convert it to a rental. But that's okay because our prequal does not take it into account.

I think the difference between me and you is I believe you are self-employed and maybe only one income. We are fully documented with dual incomes and have zero credit card debt. Before when I was a contractor, it was pretty easy to get a loan because credit guidelines were so loose back then... now, not so much.... but luckily I have more than 2 years of fully documented tax returns and the banks like that.

And yes... cash is king... it also helps with appraisals as all cash-offers help with the appraisal barrier.

But like you... I may find it difficult once we actually try to close although we are into a second refi and we aren't having any issues (we refi'd another property earlier this year).

And while most of the responses are 20% or more down... there are 3 people who used only 10% down.

 

[myirvine]

Regarding rental income...

If converting a previous, primary residence into a rental property, you can use new rental income under the following conditions:

1. the home being converted into a rental has at least 25% equity as evidenced by an appraisal

2. you can document the security deposit of the new tenant as having cleared your account

3. you produce a rental agreement

Even if it is not yet documented on your Schedule E.

 

[usctrojancpa]

Regarding rental income...

If converting a previous, primary residence into a rental property, you can use new rental income under the following conditions:

1. the home being converted into a rental has at least 25% equity as evidenced by an appraisal

2. you can document the security deposit of the new tenant as having cleared your account

3. you produce a rental agreement

Even if it is not yet documented on your Schedule E.

Absolutely correct...the lenders will treat a current rental property slightly differently than a current primary residence that will become a rental property after a purchase.  They will require slightly different documentation for each.  Most lenders will count 75% of the rent amount (they'll take the lower of actual or market rent for a similar property) as income and ALL of the expenses except for depreciation. 

 

[irvinehomeowner]

Zombie thread time.

I think a new poll needs to address the source of those great than 20% down payments:
http://www.talkirvine.com/index.php?topic=1394.0