FHA Saves the Day!
FHA loans are the best on the market! Yep, you heard me. FHA loans are the absolute best option available for everyone in the United States. Oh, I mean everyone in the United States other than those that live in San Francisco and the Peninsula - sorry, you guys can't really use them (and if you are not sure why, shoot me an email).
I wrote a post a while back about low down payment options. But, I wanted to bring the FHA loan back up because this is by far one of the best options for buyers looking to get into a property - but most local lenders do not really bring it up because so many properties do not qualify for FHA financing in the Bay Area. In addition, there are stricter property conditions that are required (health and safety) than with a conventional loan. This is to top off that listing agents have a hierarchy of loans that they think are "stronger" with FHA nearing the bottom of the list.
So why are they so great? For starters you can get control of a $1,266,296 property for only $42,821 down. That is the maximum purchase price given the $1,223,475 high balance conforming loan you can get on an owner-occupied fourplex in San Francisco, San Mateo, Santa Clara and Alameda counties.
What is the catch Ryan? Well, there are some increased costs associated with the loan. For starters, there is an upfront mortgage insurance premium that needs to be paid. This can be added on to the loan balance, but the fee is still there. Also, there is mortgage insurance on a monthly basis for the life of the loan after depending on the LTV. But, back to my main point, where else in the world can you get 96.5% loan-to-value?
In closing, tons of properties qualify for FHA loans in the Bay Area. As you navigate the process and shop rates across lenders, remember about the opportunity costs of tying up your money in equity - and what you might want to do instead with the 16.5% you did not need to put down (like funding the next Google and getting 1,000,000,000,000X on your money).
MinnGo is now taking clients on for Property Management. In the past, we would do it for clients when it made sense. We are now helping landlords and renters - we can assist in finding that perfect place to rent or putting a house on the market for rent. If you have any questions, feel free to give me a call directly at (650) 430-5322.
MinnGo is HIRING!
We are looking for licensed REALTORS to join the team. We are not your ordinary brokerage. But, if you know smart, hungry, ambitious individuals looking for roles as sales associates or property managers, please pass on the word. We are not looking just in San Mateo but are branching out and expanding coverage from Gilroy in the south, Napa in the North, Half Moon Bay in the West, and Stockton in the East.
If you have not already had the chance to check out our new website, take a look! New Website
If you ever have any questions, or anyone you know is interested in buying or selling a property, please do not hesitate to reach out or share our contact information. At MinnGo, we realize that real estate is not something our clients think about everyday. Lucky for you, that is what we live and breathe.
Until next time.