Get Your Mortgage Phil

Saturday, March 13, 2010  7:30 PM

Admission: $20 general; $15 student/senior

Canada College Main Theatre

4200 Farm Hill Blvd., Redwood City, CA 94062

The Peninsula Cantare's March concert features the toe-tapping music of George Gershwin and the clever lyrics of his brother, Ira. Enjoy the distinctive voice of George Shearing as he sets Shakespeare's words in his jazzy style. For more spice throw in The Beatles and some swinging J.S. Bach. The Cantare's versatile pianist, Alex Bootzin, and the Nucleus Jazz Quartet provide the instrumental accompaniment for this concert of familiar favorites.

You can stay informed about Cantare's Activities by signing up with the Cantare email list!

Dear Real Estate Dinosaurs Of San Mateo County,

I, a fellow real estate agent, am writing this letter to you as fair warning, you are soon going to be extinct!

You know who you are. You spend thousands of dollars on your advertising. In your advertising you tell us how you are in the top 1% in the universe in sales. There's a picture of you next to your fancy car. You have pictures of homes that you have sold with a red CLOSED banner draped across to impress us.

Your office is a testimony to yourself. Your top producer trophies are spread throughout your expansive office. Your certificates with alphabet soup designations are perfectly placed to impress us.

Who am I, you may ask? I'm that agent down the hall in that small cubicle. It may not be real impressive, but it is where I am implementing my plan to drive you and others like you into extinction!

It is here where I am sharpening my tools to begin the assault. Don't worry, it won't be bloody, but it will be painful!

I won't be conducting this operation alone. I have teamed up with My Buddy, The Mortgage Broker. He is a social media assassin. He has been trained in the art of social media warfare. And to be quite honest, he does not like you! He has called you in the past to introduce himself, but you have not returned his call. He has a chip on his shoulder. He wants you extinct as much as I do.

We are going to fight fair, so I am going to tell you the tools we are going to use to see your demise.

First, we are going to strike you with our ActiveRain blog. We are going to post content that buyers and sellers are looking for. As a matter of fact, we are going to hit you with content from page one of Google!

Next, we are going to poison you with a viral infection. We are going to post our content on our Facebook Fan Page. Our Fans are going to share this with their friends to make sure your virus spreads. 

We've knocked you down, and you are staggering! As you are convulsing with your last breaths, we are going to psychologically destroy you by Tweeting our valuable content right in your face! I told you it was going to be painful!

Your days are numbered, Real Estate Dinosaur - I'm coming to get you.

Sincerely,

That Agent Down The Hall In The Small Cubicle

  Are you aware how difficult it is to get a jumbo loan these days? If you are selling your jumbo loan sized home or listing one, what are you doing to make it easier for a long line of qualified buyers able to buy your home? 

One strategy you may want to consider is a seller carryback. A seller carryback is financing by the seller, usually in the form of a second mortgage. 

The easiest way to understand how a seller carryback works is to look at an example. Suppose you own a home worth $1 million. You owe $300,000. You plan to buy a new home for $1,500,000, and make a 25% down payment of $375,000. 

Assuming a sale price of $1 million minus 7% selling costs, you net $930,000. If you pay off your $300,000 loan, you can net $630,000. You only need $375,000 for the down payment, plus $25,000 for closing costs, moving expenses, and a little vacation after all this stress! Now you have $230,000 left over. What are you going to do with these funds? 

Suppose you offer a $230,000 seller carryback second mortgage. How does that benefit a buyer:

• A smaller down payment may be needed
• It takes the financing out of the jumbo category and puts it in the conforming category, which is easier to obtain
• It gets rid of the need for private mortgage insurance, which is an additional monthly cost to the buyer
• The buyer does not have to qualify for private mortgage insurance, which is very difficult these days

• You get a higher yield than if you put the $230,000 in a low yielding account
• You have opened the door to a larger pool of qualified buyers to purchase your home, therefore
• You may be able to sell your home for a higher price because you have reduced the toughest barrier to purchase a home today, financing

Now that we have the benefits of a seller carryback, let's talk about implementation. First, let's talk about what the first mortgage lenders usually require with a seller carryback:

1. The term must be at least for 5 years
2. There must be monthly payments (no deferral of payments)
3. The payments must at least cover the interest
4. The interest rate charged must be a "market" rate (I interpret this to mean not way lower or way higher than the current market rates)

How do I make myself comfortable, you ask, that this buyer can make the payments? Well, the first mortgage lender will only approve the buyer if they are comfortable with the borrower's ability to pay. There is comfort in knowing that, especially today when almost all of the loans being approved are with full documentation.

To make yourself more comfortable, you can write into your contract that you reserve the right to have a mortgage originator of your choice review the buyer's loan application and package. Be specific - ask to review current paystubs, two years of tax returns and w-2s, the most recent two months of bank statements, and a credit report. 

Staging your home, marketing it with massive exposure, and making it accessible are all important factors in getting your home sold. Equally as important, and I think even more important in these days of difficult to obtain mortgage financing, is to have a financing strategy in place to make it easier to buy for a larger number of people. The seller carryback is one tool, the seller buydown is another.

Implement these strategies and sell your home fast for top dollar!

Are you looking for a mortgage for a property in Hillsborough CA? I can help you. I work at RMC Real Estate Loans, located  conveniently to Hillsborough on Burlingame Avenue in downtown Burlingame. Our company is a mortgage brokerage that has been existence since 1976.

A mortgage brokerage is a company that helps people that want to borrow money find the best terms for their needs. Our mortgage brokerage has partnerships with many of the largest lenders in the country, as well as others that are not as well known. Why would you call me to get your next mortgage? I will save you money, time, and hassle.

I will save you money in several ways. First, you will have access to the programs of many mortgage lenders. I can submit your application to the lender with the lowest rates for your needs. If you go directly to a bank, you will only be exposed to their particular mortgage programs. Their rates may not be competitive.

Another way I can save you money is by utilizing my ratewatch service to help you decide when to lock in your mortgage rate. This ratewatch service notifies me when their is a significant turn in the mortgage rate market. It makes no sense to let the rate float if rates are moving up. Conversely, it may not make sense to lock in your rate if rates are going down. By staying on top of the mortgage market, I can help you save money by making an informed decision about the best time to lock in your rate.

I can also save you money after you obtain your mortgage. I keep your mortgage information in my database. When the opportunity to save money with a refinance presents itself, I will let you know ASAP!

Time is money. You could spend your time calling a bunch of different mortgage lenders. How many should you call to get the best rate? Well, by the time you determine the right number of calls to make, guess what? The rates have probably changed any way! You're time is probably better spent delegating this task to your mortgage broker, whether it's me or someone else that you trust.

Getting a mortgage can be a real hassle. Now, more than ever, there is a lot of paperwork required - there is no avoiding it. What can be avoided is limiting the amount of phone calls to you asking for more and more documentation. I minimize these phone calls to you by asking for all of the documentation upfront that I know will be required to obtain your mortgage.

Although I can help you with all types of real estate loans, I specialize in jumbo mortgages. If you live in Hillsborough, you most likely need a jumbo mortgage. A jumbo mortgage is any loan amount above $417,000. Between a loan amount of $417,000 and $729,750, these loan amounts are called agency jumbo mortgages. Loan amounts above $729,750 are jumbo mortgages. Our lending partners offer competitive rates in all three categories.

You tell your real estate agent "I want to buy this house, how can I afford it?" It's the house of your dreams - the right number of bedrooms, a great kitchen, and a nice back yard. The problem: it's slightly out of your price range. What are your options?

One option you could choose that can help you afford to buy this particular house is to use the buy-down strategy.

The buy-down strategy is made up of two components. The first component is lowering the interest rate by paying points. One point is equal to 1% of the loan amount. Each lender usually has a matrix of rates and points charged. For example, the matrix might look like this:

• 8% 0 point
• 7.5% 1 point
• 7% 2 points
• 6.5% 3 points
• 6% 4 points

Are you looking at condos for sale in Burlingame? Here is a recently listed condo for sale by Mary Ann Teixeira of McGuire Real Estate in Burlingame. A 16% down payment will qualify this property for conforming financing up to $417,000.

If you think you can't get a commercial loan in today's market, think again! Today, we closed escrow on a self-storage facility in South San Francisco. I am going to describe the terms of this commercial loan for you so that you can get an idea of the appetite for these type of loans, and what was required by the lender to get it approved and funded.

This commercial loan was for $3,500,000. My client refinanced his building in order to consolidate the three outstanding loans on the property, and to get cash-out. He used the funds obtained to pay down outstanding consumer debt. In today's lending environment, obtaining cash-out with a commercial loan is not easy. 

Here are the terms of this commercial loan:

• 6.25% fixed for five years
• 25 year amortization
• 10 year term
• 1 point origination fee

The bank also wanted an environmental report. This report cost approximately $1800, which my client had to pay for upfront also.

Qualifying for a commercial loan is different than qualifying for a residential loan. The lender's main concerns are the type of property, and the cash-flow of the property. 

The type of property is important because certain types of commercial property are easier to sell, in case of default, than others. For example, an office building with many different businesses leasing space has more potential buyers than that of a single use facilty, such as a gas station.

The cash-flow of a property is important because a lender wants to be able to generate income from the property in case of default. My client has very good cash-flow because he has done a great job keeping a large percentage of the units in this South San Francisco self-storage facility rented. I am convinced this high-occupancy percentage and the amount of equity are the main reasons he had his commercial loan approved.

Helping building owners and buyers obtain a commercial loan is one of the services I provide. If you need this service, click here and describe your needs. I will do my best to find the best terms for you!

The Peninsula Symphony Orchestra is one of the many organizations that add so greatly to our Peninsula Living lifestyle. Celebrating their 60th season this year, they offer a concert series of 4 performances a year.

Community outreach and bringing music to young people is a special passion of theirs.

They are offering a FREE family concert on Sunday, February 21, 2010, at 3:00 PM. This special concert will be held at the College of San Mateo, and since seating is limited, you are asked to call their office to reserve your FREE tickets. You can reach them at 650-941-5291.

You'll be impressed with the quality of the music, and the generosity of spirit of the musicians. With music programs being curtailed and cut in many schools, this is a delightful way to bring beautiful music to young people.

Everyone is welcome--this is not exclusive to families and young people.

Bravo Peninsula Symphony Orchestra!

Have you seen this new statue in downtown Burlingame? I was walking down to the convenience store to get a Diet Coke (I'm addicted), and I saw this statue in front of the former Coldwell Banker office. This office is currently vacant, so it was strange to see this statue implanted right in front of this building.

As I was taking a picture of this statue, one of the downtown Burlingame businessmen yelled at me from the building behind "Hey, what are you taking a picture of that for?"

I said, "I think it looks pretty strange in front of this building, what do you think?" 

He said, "Well I do to, and so do a lot of the other business owners. If you don't mind, send your picture to City Hall with some thoughts on what you think of it."

Downtown Burlingame stirs the passions of the city's citizens. It has taken roughly ten years from beginning to an affirmative vote to get a new Safeway built. It took so long for several reasons, but mainly because of the differences of a couple of groups who feel very passionate about the appearance of downtown Burlingame.

I have a feeling that the future of this statue is going to debated in a public forum. It's never boring in downtown Burlingame!

Do you need a loan to complete construction in California? I may be able to help you. I have access to private money that will loan to complete construction on a wholesale basis, as well as working directly with borrowers.

There are several reasons why you may need a loan to complete construction. First, perhaps you were funding construction out of your own savings, and have run out of funds that you want to commit to the project.

Second, the project may have become more expensive due to upgrades or unforeseen circumstances.

Third, you may have a loan, but your construction lender may have gone out of business! Ouch!

No matter what the circumstances, if this happens, you need a loan to complete construction. Here are some of the parameters that my private money source in California requires:

First, the loan amount must be between $1 million and $5 million dollars. This source for a loan to complete construction likes the high-rent districts!

Second, the maximum loan-to-value percentage is 65% of the future completed value.

Third, the maximum term is three years. However, most of the time, a loan to complete construction will be one year.

Fourth, the minimum credit score must be at least 640. The credit score used is the middle score of three credit scores supplied by the three credit bureaus.

To apply for a loan to complete construction, there are three parts of the approval process.

The first part of the approval process is qualifying the borrower. This part of the qualification process is similar to applying for a loan to finance a completed home. A loan application, income documentation, and asset documentation must be provided.

The second part of the approval process is qualifying the contractor. The contractor must provide adequate insurance and a resume of completed projects to demonstrate his ability to complete the job in a workmanlike manner.

The third part of qualifying for a loan to complete construction is providing project documentation. This documentation consists of plans, permits, a construction contract, cancelled checks and receipts for work completed, and a list of building materials.

Trying to get a loan to complete construction can be stressful! My best advice is to be organized as best you can with your documentation, starting with the first receipt you have from the beginning of the project. Organization will help minimize your stress level.