Newsflash: First time home buyer – mortgage structure and process questions- help [Seattle]

Hi – my husband and I are relocating to Seattle, WA in the next month and are looking to purchase our first house. The market is extremely hot in that area, so house prices are more than we would like to pay – but, it is what it is. We currently live in Santa Monica, so at least it is cheaper than that! Our combined income is over $300K (prior to bonuses, which are approximately 25% or so.) We recently finished paying down graduate student loans, so the majority of free cash flow over the past 3 years have gone towards that (income has increased significantly in those 3 years – we were not making the same $300k during that time.) We have around $130k in total liquid cash. We have substantial 401k balances, but do not want to dip into those at this time unless 100% necessary. Our credit is 800+.We are looking for houses in the $600k – $850k price range – ideally around $700 – $750k. Any advice on what structure we should look into? We had a close family friend recommend a credit union and we haven’t heard back from him with a final prequel letter – however, I talked to some coworkers who suggested the 80/10/10 loan. When I brought this up to the mortgage banker, he indicated that the structure of the 10% piggyback loan would be a 15 year amortizing loan. I thought I had read that there was an option for the 2nd lien loan to be structured as a HELOC / interest only. That would be my preference – although I plan to pay the loan back as soon as possible, I like the option of the amount required to be paid month to month. Is this a typical structure? Should I talk to other lenders (assuming I don’t like what I get back from him)? Should I be considering other structures?I have read enough threads in here to know some might question my decision to buy at this point, but we have 2 small kids and have lived in a tiny condo in Santa Monica for the past few years. After watching housing prices outpace us in that part of the country while we paid down student loans, I don’t want to repeat the same experience in Seattle! As far as I have read, the fundamentals are really good in that area due to the ascendance of Amazon and other tech jobs. I would hate to be priced out of two different markets!Any advice would be greatly, greatly appreciated. I hope all the details don’t make me seem annoying – it just seems like everything is pretty specific to people’s unique circumstances.



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s