Jumbo: 10% down on a $1 Million Home Price?

[youdontkillmoney]

Looks like how US Bank calculated HELOC payment it is a simple ($100,000 x 4.5% / 12) = $375.00

[iv]

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@Revelate wrote:

Payment wise the 80/10/10 looks like a good deal, problem is I can't quite figure out how that HELOC payment isn't closer to $500/month if talking 30 year term at that interest rate but maybe I'm flubbing the napkin math.

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Not all HELOCs fully amortize during the draw period...  some are interest-only in the draw period.

(I think the negative-amortization options are long-gone.)

Of course, the interest-only options will provide more flexibility now, while costing more in the long run.

[youdontkillmoney]

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@iv wrote:

Of course, the interest-only options will provide more flexibility now, while costing more in the long run.

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Thanks, yes I think the HELOC is interest only...

[iv]

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@youdontkillmoney wrote:

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@iv wrote:

Of course, the interest-only options will provide more flexibility now, while costing more in the long run.

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Thanks, yes I think the HELOC is interest only...

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Just keep in mind that usually it's interest-only during the draw period (usually 10 years), and then converts to fully amortized in year 11.  Can be quite a jump.

(If you haven't moved or refi-ed by then, anyway.)

[youdontkillmoney]

RE: Just keep in mind that usually it's interest-only during the draw period (usually 10 years), and then converts to fully amortized in year 11.  Can be quite a jump.

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Thanks I did not know this (that there is a draw period and rates can increase from the initial 4.5%) nor did US Bank lending officer mention; I did email him follow up questions asking him to explaining how the $100K HELOC works

My Wells lender when I asked him about 80/10/10 said he thinks a fixed rate 30-year 10% down on $1M purch price is better for me though

[iv]

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@youdontkillmoney wrote:

My Wells lender when I asked him about 80/10/10 said he thinks a fixed rate 30-year 10% down on $1M purch price is better for me though

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I'd agree with him.

[youdontkillmoney]

Thank you for your insights/help. ; )

[Anonymous]

not that you asked... but IMHO that's a lot of mortage for that income. Not saying you won't get a loan, just saying it's a big monthly payment for that income. 

[youdontkillmoney]

jddssc121

Thanks for the comment. Yes I would agree, but we also did a sanity check and looked at the income coming in monthly and the estimated monthly mortgage payment and it's about 50% of what we bring in and factoring in other expenses we'd still have at least a coople thousand left over monthly (this is even maxing out on retirement accounts as we do now). Plus our income streams are stable wth 10+ years in each of our jobs so there is low risk of losing our jobs, mine is in fact civil service gov so I have a "property right" to my job that is Constitutionally protected courts have ruled, but besides that I am a "superstar" at work so I won't be fired anytime soon; the wife works for a major hospital and is also considered a "superstar" at work so her job is safe too. Last, even though we are leveraged at $1M we would be happy to find something at $850K range and are open to that, but having a $1M purch price is an option knowing full well we can handle it financially. I do agree it is pushing it for our incomes but within the limits of what we can handle as a two person family.

[Revelate]

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@Anonymous wrote:

not that you asked... but IMHO that's a lot of mortage for that income. Not saying you won't get a loan, just saying it's a big monthly payment for that income. 

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It's doable even on smaller income even, all hail itemized deductions when talking that loan size: the numbers get goofy quickly and optimizing one's withholding keeps the cash flow going.  That's not an absurd DTI at least, heck Chase et al. were willing to qualify me for 1.1M at 20% down which is a similar payment at 160K income even... yeah I side-eyed it, but if I'd had another 50K let alone 100K in income, could've pulled the trigger pretty easily and had money left over if I wasn't shopping with both hands on other things in life.  

Priorities .

Where are you looking at purchasing YDKM?