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Advice about Loans

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Refinancing in Albany

April 2013

For those of you who have recently refinanced a home in Albany, can you recommend a mortgage lender? We recently tried to refinance our Albany home through a large national mortgage company. Our house is large by Albany standards (4+ bedrooms), and they could not find comps and we feel that the price came back rather low (actually, about 200,000 lower than when we had it evaluated four years ago). Our feeling is that the home's value probably is somewhere between this recent evaluation and the previous one,and wonder if a local mortgage broker, more familiar with the area, might be able to value the house perhaps more accurately. Does this logic make sense? It could be the value has dropped that much but, when houses come up for sale around ours, which is rare, they sell quite quickly and for asking price. The problem is, they are much smaller than our home. Albany dilemma


I'm in Berkeley, and just had a very good experience refinancing through Andrew Nathan of San Rafael. http://andrewnathan.com/ His company has been called Irwin Street Financial, but it's part of Pinnacle mortgage co (which I know nothing about) and I understand the company is in the process of taking on the Pinnacle name. Anyway, he and his office made the process as easy as it can be given the ridiculous requirements these days. I'm terrible at this stuff, and they were patient and helpful. I got a good rate. Everything was explained. I recommend him highly. Oh, and the loan officer at the title company told me at closing that she likes working with Andrew's company because everything has been done, and done right. Good luck. Happy with my refi
Dear Homeowners Since you are refinancing, the appraised value of your home does not matter as much as if you were buying or selling. As long as the appraised value is sufficient to provide security for the loan amount, it does not matter if comparable sales exist. However it is acceptable to use comparable sales further away, in El Cerrito,smaller, etc. or earlier, and adjust those sales for sale date, size, location, school district, etc. Many of my friends and clients have had better results with their credit union than with a national bank or mortgage company. Lynn

Borrowing from ''Bank of Mom & Dad'' for home

Dec 2012

What type of professional would I need in order to borrow from the ''Bank of Mom & Dad'' to purchase a home? They are out of state, and very happy to do this for me. I would pay them interest, but lower than a mortgage I could get on my own. Do I need a lawyer to write up a promissory note? What type of lawyer? Do I need a financial advisor/planner/accountant/etc. of any type for any of this as well? M&D would loan the entire purchase price, and we're talking about approx. $300,000. Would I still be able to get the mortgage tax deduction somehow? anonymous


Thank goodness for the Bank of Mom & Dad! If I were your mom and dad, I'd want the mortgage recorded, so that if anything goes wrong (divorce, lawsuit, bankruptcy . . .) they have first claim before any outsider. Your first stop could be a property attorney or a mortgage broker, to see what the ''real'' forms look like. Scott
I would definitely have a contract written up for something as large as a $300,000 loan. Sorry to sound dismal, but it should include any circumstances as death, of either one of you, of any other issues you may think of. You could deduct the interest but then your parents need to declare the interest income and pay taxes on that income. So, they may not want to therefore pay more taxes. Considering this is a pretty hefty sum of money, I would for sure get a real estate lawyer to write up a contract. paralegal
Not legal advice - BUT it's my understanding you can deduct the interest you pay as long as the debt is secured by the home. (That's what makes it mortgage debt, not whether or not the lender is a bank.) Besides the promissory note, you'll need another document - I think it is a deed of trust - that reflects that the debt is secured by the property. Nolo Press might have forms for this. On your tax return you put your parents SS number. They will have to declare the interest you pay as income, too. borrower
This is the sort of situation where it sounds like you need a real estate attorney and an accountant for tax questions. I think you should give Jean Shrem a call. She's a real estate lawyer and real estate broker and does private loan documents for people all of the time. She doesn't try to over complicate things and rack up fees, she's efficient and concise, very knowledgeable and cost effective. You can reach her at www.ShremLaw.com. Jean@ShremLaw.com and 510-882-9992. Prior Client
Just saw this question. I did this a few years ago and did all the paperwork myself, but asked around a little bit. (I was in law school at the time).

Disclaimer: although I am now a lawyer this is not the type of law I practice and I am not entirely certain I did it right but via my research I think I have the components. All things being equal, I would consult a lawyer.

One thing my father was very adamant about, in an abundance of caution, is that we not take out any other loans on the house. In other words no seconds, if we wanted a home equity line etc we would have to refi the whole thing. He was probably right because, even though your parent's ''first'' should have seniority, it could get messy in a negative equity situation to have your folks vs some big company.

Basically there are a couple of things you need to consider: 1) Record the deed of trust with the county. This basically records the mortgage in public document. This should give them the same rights as any lender...I think.

2) Loan contract- with your terms.

3) Interest rate. The IRS releases an applied interest rate each month. Your parents will need to charge you at least the minimum for a long term loan to be ensured to avoid gift tax. They are substantially lower than market.

4) Level of risk. We made certain our house was as close as possible to a no risk investment for the folks. I.e- the rent yield exceeds the note, bought at the bottom etc. I was just not comfortable with the idea of my parents- who are retired not being able to access there investment at any moment they should need to (be it by refinance or sale). For me personally, I was not willing to stretch my budget at all, even though we probably could have afforded a bit more house....

JUst my 2 cents done that


Sorry, just wrote and forgot a couple of things. My parents declare their income (i.e. the interest) We deduct our mortgage interest. We do an online amortization chart and use that. There are companies that handle private loans, do all the paperwork and keep track, but to me it just did not seem complicated enough to pay an ongoing percentage- though obviously a lawyer to draw up the initial papers might be helpful (title company will handle the deed of trust.) Good luck! done that

Want to do ZERO cost refinancing

Nov 2012

HI, I'm wondering if anyone knows of a mortgage broker who will do one of those ZERO cost refinances. I am looking for a 15 year fixed rate, which is what I have. We have excellent credit ratings. Thanks. Home sweet home


Hi, we've refinanced twice in the two years at no cost through MPR Financial in Albany. Their website is www.mprfinancial.com. We did everything by e-mail and have never met anyone from there so it's not the most personable brokerage out there but they've been efficient and reliable to work with. Anon
Heather Headley at Mason-McDuffie Mortgage will provide you All the information and help you through the process. She is a wealth of knowledge and a dynamo. Her phone is (510) 339-3700. Her email is hheadley@mmcdcorp.com. Good luck. Shoey
We just refinanced our 15 year mortgage with our broker - Alan Baskin at KLA mortgage. I think he's great. We did a close to zero cost ($300 total out of pocket to us) and for a higher interest rate could have done a no cost one. Alan is great to work with - very straight up about your options and very easy to deal with. I highly recommend him. You can reach him at alan@klamortgage.com 510) 704-1050. serial re-financer

How hard is it to refinance?

June 2010

I'd like to get get tips on how to refinance. We are not distressed, have excellent credit scores but have an ARM that could increase if interest rates go up. We'd like to get into a 30-year fixed. I've heard how hard it is to refinance, even if you are in good financial shape. Is this still true? If so, can anyone give advice as to how to best go about it? Should we work with mortgage broker? Or try to work with our current loan holder (BofA)? I've heard a lot of bad things about BofA's refinancing (they were listed in the news as one of the worst), so I'm wondering what we can do. Thanks for your input! mortgaged momma


I have a credit score of 730 and just refinanced my home, and also took out equity - very easily. If your credit score is good and your house has held its value - there should not be a problem. Just know that the appraisals are coming in low right now. Please call my mortgage broker, he is great to work with: Behzad Zandi 415-793-0015 behzadzandi@loanplaza.com
berkeley mortgage holder
I'm not by any means an expert, but we recently refinanced our mortgage with very happy results with the help of Ted Maniatis at MPR Financial on Solano. You can email him at ted@mprfinancial.com, or his phone number is 510-527-6146. Certainly you can get a refi quote from BofA, but you should get a few from different brokers to be sure you're getting the best one - lowest rate and fewest points. Good luck!
We had a tough time at first, but finally found an excellent rate. It took about 4-5 months of work because of problems with appraisals and banks. The trick is to not give up! We first tried to refinance with our own mortgage lender IndyMac. IndyMac is not local. They sent someone from out of town to Berkeley to give us an appraisal. Needless to say, they low-balled the value of our house (not understanding the market) by about $80,000 ($690K). This put us in a position where we had too little equity in the house, so they refused to refinance. We got a local appraiser, and countered them with appraisals that were much higher. They didn't agree. So we said ''later.'' Foolish for them. We went to Wells Fargo (based in SF), they hired someone who does LOCAL appraisals in Berkeley. Our house came in with a much higher value ($770K). We got an amazing rate. We are now saving ourselves about $700 a month. My husband said he would have stopped as soon as IndyMac said they couldn't do it. But my persistence paid off. My advice: Don't give up and work with people who know the micro markets. You want to get a high appraisal for your home. Elisabeth

How to refinance underwater house

Dec 2008

For certain reasons, we will need to refinance our house in April '09. Problem is, judging from recent home sales & foreclosure sales on our street, our house will likely appraise for 150K less than our current mortgage. We are assuming that no lending institution is going to allow us to refinance with them under those circumstances. We have no choice but to refinance, can't go into the details, but it will have to happen because we will lose our current mortgage then. What do we do? Mail in the keys and lose the 70K downpayment it took us a decade to save and ruin our credit for years? Very worried


Best option is to deal with current lender. Tell them you can not possibly pay the loan in full at this time. No one will refinance and if you sell, they will receive less than the full amount of the loan. If they agree to a short sell you may save your credit, but will lose your down-payment. But no lender will lend in excess of 100% of the homes value. Especially right now. The best option again is to deal with current mortgage holder. If default on the loan payment you will have about 90 days to foreclosure (sounds like the loan will be due in full? That will be difficult to cure and stop foreclosure). A lot of people are in this same boat. Best of luck. myst
you will not be able to refi if you have negative equity in your property. Your best bet will be to call your lender and ask for a loan modification. There are also services that can do the negotiating for you (at a price). mathew
I would call our mortgage broker, Zach Griffin. He is the best. We were in a financing pickle last year and he saved out butts. We have worked with him on a few different houses and the attendant mortgages and lines of credit for over 10 years now. He is nice, smart, and creative: Zach Griffin Loan Consultant Direct: 510.339.4300 117 Fax: 510.339.4311 Email: loans@zacharygriffin.com http://www.lasallefinance.com/zgriffin.html Mary
The first thing you should do is contact your lender. I'm a little confused about what you mean by ''will lose our current mortgage'', but the first step would be to re-finance with your current lender. They are the ones who would have to foreclose if you were unable to re-finance elsewhere, so they are going to be the ones motivated to get you into any loan package that keeps you making payments. If you have good credit and can document your income, they should be willing to refinance you -- it doesn't change their risk at all, if that makes sense. The only other alternative to foreclosure is to come up with that money elsewhere -- savings, family, etc., but having your existing lender refinance would be better, I'd think. Liza
Call John Holmgren at Holmgren & Associates mortgage brokers in Montclair, the number is 510-339-2121. If there is a way to refinance in your situation he will know how to do it. I have dealt with a lot of mortgage brokers over the years and John is the ONLY honest and ethical one I have ever encountered. He will not just tell you what you want to hear to close the deal, he will tell you the truth even if it means he makes less money or no money off of you. Good luck
First, talk with your lender. They stand to lose $80,000+ if you cannot refinance and walk away (if I understood your description of your situation correctly). Ask them if you are qualified for the ''Hope for Homeowners'' FHA program, or if there are any other programs you may qualify for, that will allow you to borrow more than the value of your home or to write down the loan value without losing the home. Second, You should SIMULTANEOUSLY try to get an appointment with a housing counselor. HUD has a web site listing agencies that offer counseling, by area (Web site title: HUD Approved Housing Counseling Agencies). http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=NV The counselors may have other strategies to consider beyond those that a lender could offer, or may be able to help you find a lender to work with if your current lender cannot help. Both these approaches will cost time more than money. A third thing you might consider doing is talking with a financial planner regarding the implications of holding onto the home, despite your negative equity, versus letting go of your home and downpayment and starting over. This would be in addition to steps one and two, not as an alternative. Good luck. a real estate economist
You don't say if you've talked to a mortgage broker or other financial professional yet. If you haven't, you definitely should. Your assumption might be right, but a professional would certainly know better. Good luck!!

Fannie Mae loan risks?

Feb 2008

We got sucked into a refi with an adjustable loan back in 2005 and now want refi into a fixed rate loan for a rental property. We are considering a 15yr fixed Fannie Mae loan cause their rates are more attractive than banks. However, it's difficult to lock in those their elusive rates since they fluctuate from day to day, unless those rates stabilize. There is a stiff prepay penalty, so it is basically a lifetime loan. We have no plans to sell, but we do have two kids heded for college within the next five years. We've never had a Fannie Mae loan before and wonder if there are risks that we don't know about. -Anon.


Sounds like your risks are with your mortgage broker or loan officer. A FNMA loan does not have a prepayment penalty. Go to this website (www.efanniemae.com) and check out the mortgage products. Ask your broker or loan officer if anything they have given you doesn't match up with the information on this site (you should have received disclosures and a good faith estimate of costs - READ THEM). Also, ask where they are getting the loan from. You mentioned FNMA's rates are better than a bank's, so I'm guessing you are working with a mortgage broker. Trust me. He is not getting that loan directly from FNMA. It doesn't work that way. FNMA provides their guidelines for specific mortgage products, banks make loans according to those guidelines. Mortgage brokers submit loan files to those banks that fit those guidelines. The mortgage broker is working with the bank to get your loan. When the loan closes, the bank owns it and will sell it to FNMA. FNMA loans are practically the safest loans out there and do normally have the best rates. Just be an informed consumer and read all the paperwork you are given. Anon

Refinance options for elderly MIL?

July 2007

My 78-yr-old mother-in-law refinanced her home several years ago because she simply couldn't pay the bills on her existing SS payments. Unfortunately, her interest rates have continued to rise and she is now unable to even keep up with the interest payments; she is deferring over $200 each month in interest, which is added to her principal every month. Her interest rate is over 8.6% now, which seems quite high.

As we can't even afford our own house in the expensive Bay Area, my husband and I don't really know much about mortgages and the ins and outs of different options that might be available. For elderly with very limited incomes (less than $1000/month), what mortgage options might be best? How high would the refinancing fees be, and how do we calculate whether the refinancing would pay off in the short term?

This is complicated by the fact that we're also trying to find a way to move her to a senior community closer to us, so we're unsure as to how long she will actually remain in the house (we think she may need to sell within a year if we can find a place for her.) But we're wondering if refinancing in the meantime might possibly slow some of the financial hemorrhaging.

Any recommendations on who we could talk to in order to walk us through the financial ins and outs? Would it be a mortgage broker, financial planner, bank, or . . . ? She lives in Fairfield, but we live in San Jose. Thanks for any and all recommendations, as we could really use some pointers on this. Lost and don't know where to start


There are advisory groups (nonprofit or government) that are focused right now on helping people work their way out of mortgages they cannot afford. HUD has a search function to find agencies in a specific geographic area, on their web site at http://www.hud.gov/offices/hsg/sfh/hcc/hcc_home.cfm You could also try calling Ed Donaldson, housing counseling director of the San Francisco Housing Development Corporation, and asking him for a referral to an organization that can provide this assistance to someone in Fairfield. He was on a KQED Forum panel on mortgages in July http://www.kqed.org/epArchive/R707270900 Cynthia
It sounds like your MIL needs a ''reverse mortgage.'' These mortgages are available only to older homeowners (age 62+), and they require NO payments. The lender pays out either a lump sum (which is needed in your MIL's case to pay off the existing mortgage) or a monthly stipend, or sometimes a combination. Instead, the interest simply accrues until the house is sold or the homeowner dies.

Depending on how long the reverse mortgage remains outstanding, there might not be any equity left for you to inherit -- or to be used to fund retirement home costs. However, it is the easist way to solve the cashflow problem.

Just Google ''reverse mortgage'' for a plethora of information. For advice tailored to your MIL's situation, I would suggest a mortgage broker. Reads the Real Estate Section


Construction Loan: good idea?

July 2007

Hey, friends. My husband and I have just started a pretty extensive remodel, and we're already experiencing cost creep. Just thinking through our options, we're wondering about the wisdom of getting a construction loan to see us through the process and get all the work done at once, assuming we can afford the larger mortgage at the end. Alternatively, we may need to trim back our plans. My question to you is whether anyone has been through this process, any specific lenders who are good to work with, whether you thought this was a good way to finance a remodel and and any pearls of wisdom you might share. I'm also wondering if they will cover a major landscaping job or not, or if lenders limit the loans to the permitted constructions plans. I think I understand the application and mortgage conversion process pretty clearly, and understand about the lenders wanting to see permitted plans, check out the contractor and get a firm budget and timetable. So I don't need info about that stuff. Just looking for a sanity check on whether this is a stupid idea. Call Me Construction Crazy.


My understanding is that construction loans are for new construction only, not remodels. Maybe a home equity loan/line is what you're looking for. cc
We are in the middle of a remodel financed by a fixed home equity loan (a second mortgage, essentially), plus help from my mom, who is moving in with us. But we explored the possibility of a construction loan as well.

A construction loan is based on the final appraisal of your home after the remodeling is done. Let's say you bought your home for $500k. The construction is going to cost $300k. You would need to have an appraisal of at least $800k. They loaners like to have something around 10% leeway, so add that amount to the appraisal price. The loaners also want to have 3-6 months worth of mortgage payments (depending on the loaner), CASH, in the bank. This is so you won't fail on your payments and therefore screw the bank.

I doubt they would approve a landscaping loan (although they might approve something like a retaining wall), but you might get lucky. I had a hard time finding someone who would even talk to me regarding construction loans on an existing home -- most construction loans are for the building of a new home. Wells Fargo was very helpful but it ended up being too expensive for us to even consider. Hope this helps. Feel free to email if you have any questions. L


We just went through the process of choosing between an construction loan and a refi with cash out, and ended up doing the refi for 4 main reasons: (1) It was a much lower interest rate, (2) getting the construction loan funded was going to take about twice as long as the refi, (3) it irked me to have to refinance at the end of the project, and (4) we felt comfortable enough with the contractor (know him through mutual friends and community work together) that we didn't feel we needed the bank's oversight to keep him in line. That said, we did a lot of soul-searching and number-crunching to come to that conclusion; there were many good arguments for the construction loan as well, primarily the fact that you're only paying interest on the funds you've tapped so far, not on the whole cash-out amount like we are now. We're about half-way through the project now and haven't regretted the decision yet, though we'll see what we say when the final bills come in. ;) The bank we were talking to about the construction loan was Fremont Bank; you can give my friend Alexis a call there at 510-505-5311. She was great at explaining the pros and cons. JP

How to get a loan or grant for non-profit

April 2006

I am looking for advice for a dance studio that has a non profit status, and needs help relocating in July. Looking for advice on obtaining a loan to purchase commercial property for a dance studio. Or advice about obtaining a grant. Any advice welcome, Thanks!


We used this in our capital campaign:

www.nonprofitfinancefund.org/

Nonprofit Finance Fund has provided financial and advisory services to nonprofit organizations in the San Francisco Bay Area since 1994. Our services are available to nonprofit organizations in Northern California.

Services Most of our clients have been in existence as 501 (c)(3) tax- exempt entities for at least three years, have at least one full-time staff person, and an annual budget between $150,000- $10 million.

We provide: *Loans for facilities and other growth-related projects *Nonprofit Business Analysis to help organizations assess their readiness for change *Workshops and advice on facilities and financial planning *Planning guides on facilities and financial management *Systems Replacement Plan to help nonprofits prepare for long- term maintenance and annual facility investment needs

Best of luck from a BPNer who also writes grants, J.


The Foundation Center in San Francisco is the best resource for arts related funding sources. They offer free training sessions on how to look for money, grant proposals, etc. They also have a library to research potential funders. Easy to get to by public transportation. Finding funds usually takes a while and there are usually deadlines for applications that may be after the time the studio needs to move. So a back up plan may be in order until you receive funding. m.
Try Northern California Community Loan Fund for a loan, and http://fdncenter.org/sanfrancisco/ and http://www.compasspoint.org/ for fundraising/grants.
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