80-20 loan for expensive CA property

blinky · Joined: 05 Jun 2007 Posts: 2

It's getting pretty difficult to find a decent home for under $1,200,000 in this part of CA (the SF Bay Area). I have some cash reserves (about $400K) but would like to keep them invested as the rate of return is very good and the capital gains taxes on any sale would be very high. Instead, I would like to get an 80/20 or 80/15/5 mortgage over a 30 year period so that I can keep at least the majority of my money invested. Some specifics:

I am a first time buyer, my fiancee has owned 3 houses previously.
My FICO score is 701, my fiancee's is 751.
Our combined income is $100,000/year.
The loan would be for the purchase of a single family home, which would be our primary residence.

Is it possible to get an 80-20 loan for up to $1,500,000, or is this highly unlikely? If so, what rates should we expect? Any ideas?

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

If your income is $100,000/ year, the biggest problem that you're going to have is proving to someone you can afford it. Your payment would be more than you receive monthly, according to what you're asking for.

blinky · Joined: 05 Jun 2007 Posts: 2

Hi Travis,

Thanks for your reply. What I would like to do is use some of my investments to pay a percentage of the mortgage each month and this way I can sell off my investments slowly, as opposed to selling them all at one time and getting hit with a massive tax bill. Also, as I stated, my investments are getting a very good return at the moment and so it seems foolish to sell my investments and instead use this money for a real estate purchase. Is there some way to use my investments as income?

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

It's possible. It's going to depend on how you show it all on your taxes. It would have to make up a *LOT* of income in order for you to qualify though, especially if you're looking for at or near 100%.