Get Your Mortgage Phil

Everyone likes free, right? And we're in luck. This Thursday, November 11, 2010, entrance fees are being waived at our country's national parks. That's right, you can visit your favorite national park at no charge on Veterans' Day.

Some of the parks here in California include Yosemite National Park, Sequoia-Kings Canyon National Park and Joshua Tree National Park.

Closer to San Mateo County and the Silicon Valley are Muir Woods National Monument and Pinnacles National Monument.

This is a great opportunity to enjoy a day exploring some of nature's grandeur, and save on entrance fees to boot.

For more information, go to the National Park Service's web site.

Home Maintenance Reminders for Homeowners

Whether you've just bought that first house, or have been a homeowner for many years, there are some  household tasks that shouldn't be overlooked just because they aren't urgent.

We've seen squirrels actively preparing for winter, and now that we've had our first chilly days here in San Mateo County and the Silicon Valley, it's time for us to do to same.

Here's a list of some important tasks that shouldn't be overlooked:

• change batteries in all smoke detectors
  
• put fresh batteries in your flashlights
• change/wash all filters -- aerators on faucets, kitchen fan filters,
  furnace filters (check furnace filters monthly during heating season)
• inspect your household emergency kit (you do have one, right?) and refresh the supplies -- don't forget pet and baby supplies, too, as well as medicine)
  
• inspect your garage door -- tighten nuts that might have worked loose, make certain the automatic sensors are positioned and work properly
  
• clear leaves and debris from gutters
• check downspouts to be certain they aren't clogged, and water can flow freely away from the house
• inspect your fireplace and have your chimney cleaned if you use a wood-burning stove
• check for needed touch ups to caulking on exterior siding and around bathtubs inside
• have your furnace checked and serviced
• walk around your home, checking for and removing overgrown shrubs, tree limbs touching the roof, etc.

After attending to tasks like these,  you can sit back and enjoy the chilly evenings and our occasional rain storm, knowing your home is, indeed, a haven.

A client asked me the other day, "How does a stock loan work?" A stock loan works differently than a mortgage loan, but can serve the same purpose of financing real estate.

Instead of real estate as collateral for the loan, the stock portfolio (bonds and other marketable securities can work also) serves as the collateral. Generally speaking, the amount you can borrow depends on the quality of the portfolio.

For example, a portfolio of highly liquid stocks, such as those listed on the S&P 500, will allow for a higher loan-to-value percentage, than a portfolio of thinly traded penny stocks. Loan-to-value percentages can be as high as 80%.

One of the most important details of how a stock loan works is that the lender will usually require that you move the portfolio of stock that you are borrowing against to their institution. You don't have to move your entire portfolio - just the portion of the portfolio you are using as collateral.

Now that you know how a stock loan works, you may be wondering why someone would get a stock loan instead of a mortgage loan. Stock loans have many benefits.

Qualifying for a stock loan is based solely on the value and quality of the portfolio. Income, credit history, and property value play no role!

Is a stock loan an alternative to a stated income loan? Yes!

Is a stock loan an alternative to the old sub-prime loans? Yes!

Is a stock loan an alternative for someone who can't refinance their mortgage because of a lack of equity? Yes!

Another benefit of how a stock loan works is speed. If you pretend that a stock loan and a mortgage loan were horses, you would bet on the stock loan winning the race 99 times out of 100! The reasons the stock loan horse wins is because there is no property appraisal and no credit underwriting of the borrower.

Another benefit of a stock loan is its flexibility. There are no loan amount limits. It can be used to finance any type of real estate, so it can be used for residential and commercial loans. It can be used to finance those properties that mortgage lenders won't touch with a ten foot pole!

A huge benefit of how stock loans work is that they can be written as non-recourse. Non-recourse means that if the borrower stops making payments, the lender cannot recover other assets from the borrower if they fail to make the payments. They keep the securities, but that is it!

The payments on a stock loan are generally interest-only. An interest-only payment makes the payment lower than if it is amortized to be paid off in a certain amount of time.

Another benefit is that you are able to keep your portfolio the same. You may have been contemplating liquidating part or all of your portfolio to buy a piece of real estate. If you use a stock loan instead, you are able to continue to participate in the gains and losses, and you do not incur a capital gains tax that you may have to pay if you liquidate your stocks and/or bonds for the purchase.

Now that you know how a stock loan works, do you see any scenarios where it might work for you or your clients?

FHA loans are becoming more important in San Mateo County. The maximum loan amount is $729,750. There are many homes that can be marketed with FHA financing being available, or purchased utilizing FHA financing.

There are some changes being implemented for FHA loans beginning in October. This article is an excellent summary of the changes and what the impact will be on transactions utilizing FHA financing in San Mateo County.

Are you looking at condos for sale in Burlingame that are FHA approved? There is a condo for sale that is FHA approved located at 107 El Camino Real Unit 103.

FHA financing offers many benefits:

• The down payment can be as low as 3.5%
• The entire down payment can be a gift
• Co-signers that do not occupy the property are allowed
• The maximum loan amount in San Mateo County is $729,750
• Fixed rates are available
• Adjustable rates are available that have an initial fixed rate term
• Credit history requirements are typically more flexible than what is required with a conventional loan 

Burlingame real estate agent Dave Tapper describes this condo for sale - "It is in a great location, just two blocks from Burlingame Avenue." People love being this close to downtown!"

"This one level unit has three bedrooms and three baths. In addition, it has two master bedroom suites, a marble entry way, and gorgeous hardwood floors."

"There is a fireplace, and a washer and dryer in the unit. There is  two car parking in this secured building with tons of extra storage."

"This condo is one of only a few that offer earthquake insurance. This is an upscale, classy building that is 10 years young."

In order to use FHA financing for a condo, the complex must be FHA approved. In Burlingame, there are only two condo complexes that are FHA approved as of the date of this post.

If you plan on using FHA financing to purchase a condo for sale, it's probably a good idea to contact an FHA lender to find out what complexes are FHA approved in the area that you are interested in. And it also makes sense to get pre-approved prior to making an offer. It will make your offer look stronger!

What's going on in the real estate market today in San Carlos, CA 94070?

While gathering information today for a potential seller, I included what's going on in the real estate market in San Carlos, California.

Today, in the single-family home market, there are:

• 62 Active listings
• 28 Pending sales
• 11 Transactions that have closed in the last 6 weeks

Looking at the condo/townhouse market, we see:

• 34 Active listings
• 10 Pending sales
•   1 Transaction that has closed in the last 6 weeks

These are simply the bare statistics. You might like to know the trends we're seeing, what types of properties are selling, which are receiving multiple offers, and which are examples of what not to do when listing a home today.

If you'd like information about your particular neighborhood or type of property, I'm happy to provide it -- just shoot me an email or give me a call.

There are two FHA approved condos in Burlingame. If you want to use FHA financing to purchase a condo, it must be an FHA approved condo.

Parc Newlands is located at 107 El Camino Real. It is on the southwest corner of Newlands Avenue and El Camino Real. There are 17 units in this complex.

Pershing Park is located just west of this complex. It's a nice park for little kids.

Downtown Burlingame is nearby. Burlingame Avenue has many shops and restaurants that are enjoyed by mant residents and visitors.  

The FHA maximum loan amount in San Mateo County is $729,750. The FHA down payment requirement is 3.5%

Before you make an offer on an FHA approved condo, have your Burlingame loan officer double-check to make sure that the condo is still FHA approved. The approval status can change.

The other FHA approved condo complex in Burlingame is located at 777 Morrell Avenue. The cross street is Rollins Road. There are 28 units in this condominium complex. Burlingame High School is very close by.

Broadway Avenue, the other "main" street of Burlingame, is another street that draws many from the local neighborhoods for shopping and dining.

Broadway Avenue is a good walk from 777 Morrell Avenue.

Brad Andersohn constantly provides great content about how to imrove our social media marketing for us in the real estate industry. Here is his latest article about improving our SEO for the video and images we use in our social media marketing. I am going to post this on my Facebook page that focuses on social media marketing for real estate agents.

In my opinion, the number one way to make a loan transaction fly through the process is by submitting an Awesome Loan Package! An Awesome Loan Package is actually very easy to put together. All it takes is a little attention to detail.

Let's start with the loan application. The key idea I want you to remember is to be accurate and complete. Some items are extremely important to be accurate with. Others are very important to be complete.

You want to be extremely accurate with:

• The number of units
• Occupancy (is it your primary residence, vacation home, or investment property)
• Length of time at address (if any less than 2  years supply the former address(es) for a complete 2 year history
• Time on job (any less than 2 years supply former employer(s) with accurate dates of employment. If you have any gaps in employment, prepare a letter explaining the reasons for the gap
• Checking the Self Employed box if you owned 25% or more of a company

It is extremely important to be accurate with this information on the application because YOUR LENDER WILL FIND OUT IF IT IS NOT ACCURATE! They have extremely good quality control systems these days. If you are not accurate with this information, you will have some explaining to do! Explanations take time, and time is your enemy, especially on purchase transactions.

You want to be extremely complete with:

• Sources of your down payment and/or settlement charges
• All addresses where you have resided in the last two years
• All employment in the last two years
• All sources of income
• Listing all of your accounts that hold liquid assets (don't forget about the cash value of life insurance)
• List all real estate owned, even if there is no mortgage on a property

 Being complete with these parts of the loan application is important not only because it speeds the process, but also because it can make the difference in qualifying for the loan. For example, your lender wants to know that your cash reserves are enough to make the payments if times get tough for you income-wise. Listing all of your liquid assets is a simple step to take that answers this question.

Once again, accuracy and completeness are the two key ideas to remember when completing your application. Part 2 of the Awesome Loan Package will focus on income documentation - stay tuned!