Solution helps new Californian maximize buying power

Mortgage broker: Liz Bayer, ProMortgage.

Property type: Craftsman home in Marin County.

Appraised value: $2.85 million.

Loan amount: $2.28 million.

Loan type: 7-year AdjustableRate Mortgage.

First note rate: 6.625%.

APR: 6.821%.

Backstory: A Realtor referred me to their client, who was moving to California from out of state, as he was hired by a wellknown company in San Francisco. He wanted to buy a home in Marin County for his family to live while he commuted to San Francisco for his job.

However, he wanted to hold off selling his current home until his children finished out the school year in New Jersey. His new employer was setting him up with an apartment in the city until he bought his house here.

He had a mortgage on his current home and this reduced his buying power, as most lenders will include the housing payment of the departing residence. This created a problem because the lower buying power did not get him into the target price point home that would give him the room needed for the family and the area he wanted to live. However, ProMortgage, as a true mortgage broker, has many loan options.

I was able to recommend one of our lenders that allows us to qualify the buyer without including the housing payment of the departing residence, which then qualified my client for a bigger loan and bigger house in California.

So, instead of having buying power of a $2 million home, I was able to increase his buying power to over $3 million. There was sufficient equity in the departing residence to meet the lender requirement, which reduces their risk.

We also did need his current home listed for sale prior to closing on the new home; however, it did not need to be sold yet. My client said that this would be no problem because the listing would simply indicate that they required a long closing, not to close until mid-June.

Strategically, he held off on listing his home until the appraisal and inspection was completed and we had the initial loan approval. The good news is that on the California home, we were able to close quickly, which was important to the seller.

My client also appreciated the quick closing so that he could focus on his new job and to get some minor cosmetic work done on the house before their move. He was particularly happy about the great rate we were able to get as well.

“I was able to recommend one of our lenders that allows us to qualify the buyer without including the housing payment of the departing residence, which then qualified my client for a bigger loan and bigger house in California.”