As buyers get more sophisticated by taking a bigger-picture perspective, Kevin + Jonathan offer some advice.
Less Than 20 Percent Down? Really?
Very possible for sure and, in some cases, even more advantageous.
We got an email from one set of our new buyer clients thinking that they need to wait until later in the year to buy something or to start looking because they wanted to game the system to get a better mortgage. Here’s their message to us and our response...
We've been doing research for a few weeks now, and our conclusion is that the homes we like need a bit more down payment than we're willing to spend currently. I think we'll restart our search in a few months...
And our response:
It’s a question of various factors: the longer you wait, interest rates could be that much higher which will make your monthly payments that much higher. Moreover, every time you pay rent, you’re dulling the impact of waiting to save up more money for a down payment. Also, unless there’s a huge down payment difference, the impact on your monthly mortgage payment won’t be that much bigger. Worry less about the purchase price and focus more on the monthly payment amounts as that's the amount you actually live with.
Remember there are such things as Census Tract loans which only require anywhere from a 3% to 10% cash down payment, but those are for certain neighborhoods that the powers that be say need to be gentrified for a lack of a better word. Other programs like the VA and FHA loans don't really work here because the prices are too expensive. Other lenders like SoFi and even Citibank have done 10% or 11% down loans too but those programs can come and go.
We think that you should really consider using a less-than-20% down payment mortgage. After all, at least with Citi, you won’t have to pay mortgage insurance premiums (which isn’t usually tax deductible like mortgage interest is) and you will get into a house that much sooner. Beyond that, however, even if you do have the 20% down payment there may be other reasons to use a 15% down loan.
Which are ones we can tell you when you contact us.
You Know You Want to Learn More.
We have all kinds of insights, so you should go ahead and contact us to learn how we can help you do the most optimal thing (or least as close to that as possible).
Getting the Home Lending Process Started | Advice from Kevin Ho and Jonathan McNarry, Vanguard Properties, San Francisco
The home lending process is one that takes time, effort and oftentimes is fraught with questions. Kevin Ho and Jonathan McNarry, realtors who have helped many buyers win homes and purchase them using a mortgage, give some observations about what works in San Francisco.
Kevin Ho and Jonathan McNarry of Vanguard Properties, San Francisco, consider some of the financing products that will work for the City they and their clients have encountered when buying and selling property in San Francisco over the past few years including fixed mortgages, adjustable ones and exotic ones — each suited for a given property and offering situation.
Hi, we’re Kevin Ho and Jonathan McNarry of Vanguard Properties in San Francisco, California. We’re partners in life and in business. Together with our big black Labrador retriever, Raffi, we are top producing Realtors in San Francisco’s competitive and valuable residential real estate market.
We truly love what we do and are passionately committed to our clients, their needs and advancing their interests. We represent both buyers and sellers with many repeat clients but we are always expanding our client base. Our belief is that by working with you you will make better informed decisions in this most important of areas of life.
We invite you to contact us to learn more and to start your success story now.
SOME STUFF TO KNOW.
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Real estate is always changing and evolving. It's complex and can be as fickle as it is surprising. And while the information and knowledge on this site is considered to be accurate and correct, it cannot be warranted. Market conditions in San Francisco, California, and the world can change with a tweet or a sneeze and is beyond anyone's control.
In San Francisco, things like local, state and federal tax regulations can change with big implications. Other things like rent control rules, eviction control, lending practices and standards, building and zoning regulations are just a few of the other things that can change with little or no notice. All of these things and other intangible factors can and will impact market values and performance.
Kevin is a licensed California attorney but focuses on real estate about 99.9 percent of the time. It's important to note that while you can’t take the attorney out of him he will not be acting as your attorney here. This speaks to the larger point that you should also seek out qualified folks who work in their respective sectors if you have further questions.
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Kevin K. Ho, DRE 01875957/SBN 233408
Jonathan B. McNarry, DRE 01747295
2501 Mission Street, San Francisco, CA 94110
555 Castro Street, San Francisco, CA 94114