Help finding funding for a San Diego Duplex or SFR w/ ADU

[Robert Michelen]

Looking for advice or recommendations on finding best funding for our situation in San Diego. 

Goal: Purchase a duplex or SFR w/ ADU for sub-1MM in La Mesa or surrounding rentable areas.

Us: 750 + 800 credit married couple. 200k combined annual salaries and 150k (or 15%) ready for down payment. Clean backgrounds but confused first time homebuyers looking to owner-occupy and supplement with rental income.

Current lending experiences:

1) NFCU (not a vet) . Hooked with low rates and no PMI. Loan officer was on vacay for first 1.5 weeks. Told we couldn't do a jumbo conventional duplex but could do a 5/5 ARM or a non-jumbo conventional (under 647K) both no PMI. My realtor says they are slow and could lose the deal for us given this climate.

2) Direct lender recommended by realtor. Gave us a 15% down, 5.875% interest rate plus PMI. I was a bit thrown back at the rate, but maybe this is where were are for late-April 2022?

It's' tough to watch our buying power wither away weekly. We were eye-balling 1.3MM places a couple months ago. Hence why I'm here trying to figure out the best path given our experiences. Thanks in advance. 

[Thom MacFarlane]

Presently, if locking today for 30 days, you could expect a rate in the range for 5.50% (1.25 pts) to 5.875% (1/2 pt) for a 30 year fixed for an owner occupied 2 unit purchase. The high balance conforming limit is San Diego for 2 units is $879,750 so at 85% loan-to-value (15% down) you could purchase $1,035,000 2 unit. Above that price you’d need more down. Market rates are ticking up daily so you're subject to market rates until the property is indentified and you lock the rate.

Yes, you'd be required to get pmi but it is inexpensive on an 85% LTV at just .10% of the loan as a premium. That's just $73.31 monthly on a $879,750 loan amount.

This particular type of loan is considered high balance conforming and thus is preliminary underwritten via the automatic underwriting systems of Fannie Mae and Freddie Mac. It is possible to get automated loan pre-approval in advance of home shopping.

Yes, mortgage brokers, my profession,  are the best source of financing for consumers.