Home Equity Lines of Credit (HELOC) is a great tool to maximize your purchasing power if you are putting down less than 20% down on a home and a great alternative to mortgage insurance.
In San Diego County, a loan amount that is in excess of $417,000.00 is considered a high balance loan and a loan amount that is in excess of $546,250.00 is considered a Jumbo loan. The minimum down payment required for a high balance loan is 10%. The benefit of putting down less than 20% is that you get to hang on to more of your savings, but the drawback is mortgage insurance. Additionally, if your net household income is in excess of $100,000.00 a year, your mortgage insurance payment in NOT tax deductible. The Interest that you pay on a Home Equity Line of Credit (that was used to purchase a property) however, is 100% tax deductible. In many cases the minimum payment of a HELOC is less than that of the monthly mortgage insurance.
Most mortgage banks require a minimum down payment of 20% for any loan amount that exceeds $546,250.00. This puts your maximum purchase price at approximately $682,000.00 with a minimum down-payment of $136,250.00.
Used effectively as a “Jumbo Buster” a HELOC will allow you to purchase up to $830,000.00 with a minimum down-payment of 10%, or $83,000.00
A HELOC is a great alternative to mortgage insurance and can allow a buyer to purchase more home with less money down.
Chad Baker and his team are amazing!
My husband and I found Chad through an article he had written. Every aspect of working with Chad and his team was exceptional. From our initial phone call where he explained the many options we had, to advice he gave in dealing with somewhat challenging sellers, and closing our loan ahead of schedule, the loan process with Chad and his team went very smoothly. I especially appreciated the one-on one guidance from Juliann, who really made me feel like I was her only client. I look forward to working with Chad and his team again and would highly recommend them to anyone looking for a mortgage.
Incredible Turnaround and Stellar Customer Service. Chad and his team helped us get into our first home here in San Diego. When we first started the process we were skeptical it would even be worth applying. But Chad and his team walked us through the whole lending process with integrity and know how that surpassed our expectations. After helping us to pull together our pre-qualification, he and his team stayed at the ready. Before we even walked up to a home we were seriously interested in he had the data we needed over to us and our realtor. After finding the home we wanted to place a bid on, we were able to place a bid with a matter of a few hours. Then, after having our offer accepted, he had our loan package completed and the keys in our hands in under a month — I am pretty sure it was less than. Like I said, incredibly fast and professional turnaround. if you are looking for a motivated lender who can walk you though every detail and have your back every step of the way, Chad and his team at HomePoint Financial is your best decision. Recommend them highly!”
“I wanted to reach out and tell you both Thank You for working so hard on my loan. I really appreciate how much effort you both put in to make it happen! Top notch, one of the best I have ever seen in the business.”