Advice about Loans
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Advice about Loans
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
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
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?
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
Your first stop could be a property attorney or a mortgage broker, to see what the
''real'' forms look like.
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
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
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.)
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.
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 email@example.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 firstname.lastname@example.org 510) 704-1050.
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!
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:
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
email@example.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.
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.
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?
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.
you will not be able to refi if you have negative equity in
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).
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:
Direct: 510.339.4300 117
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.
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.
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).
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.
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.
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.
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.
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
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
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
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.
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
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.
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
We used this in our capital campaign:
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
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.
*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.
Try Northern California Community Loan Fund for a loan, and
http://www.compasspoint.org/ for fundraising/grants.
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