Need advise on homeloan/closing cost - California

[Anonymous]

I'm planning to buy a house in 6 months time. What is the maximum home price I can look to?

I can put 120K for downpayment+closing cost and no other loans/payments. My min monthly credit card payments is 50. Annual salary is 120K+bonus.

credit score is around 780.

Thanks

[ShanetheMortgageMan]

$600k sales price should be easy to qualify for... as you'd have 20% down ($120,000).  You can get real good rates (5.25% 30-year fixed) if your county here in California supports a conforming loan amount of $480,000 (go to https://entp.hud.gov/idapp/html/hicostlook.cfm, under "limit type" put Fannie/Freddie to determine if it'll meet it), or if the loan amount you are looking for is above that amount, you'd be looking at a "non-conforming jumbo" loan program where rates are about 5.5-5.75% on a 30-year fixed.  What is the loan amount for your county?

[Anonymous]

Hi Shannon,

Thanks for your reply.

It says $729,750 for my county.

Does that mean loan till $729,750 will be normal rate and not jumbo rates?

How much will be the approx closing cost for a 600K home price?

[ShanetheMortgageMan]

It's Shane, but people have called me worse.

Yes, a loan amount up to $729,750 will be considered a "conforming jumbo" interest rate, which should be around 5.25%... $417,000 and less is just regular "conforming" and should be about 1/4% lower.

Figure total costs to be about $10,000-$12,000.  Of that around $5,000 should be closing costs, and the remaining would be pre-paid items (such as pre-paid interest, the 1st years homeowners insurance policy) and escrow account reserves.