Get Your Mortgage Phil

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?

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!

Boom and Bust is an age old cycle.  How do we stop it is the question?  Better yet can we or are we just fooling ourselves?  Great Video gives some perspective!

One of the treasures tucked away in the heart of the busy Silicon Valley is Shoreline Lake Aquatic Center and Cafe in Mountain View, California. With Google's headquarter campus and the Shoreline Amphitheater only a stone's throw away, Lakeside Cafe provides an oasis of tranquility and relaxation in a natural setting next to a 50-acre lake where one can learn to windsurf, rent a kayak or pedalboat, or jog and bike the surrounding bayside trails.

  

Not only is the food at Lakeside Cafe delicious and fresh, the ambiance is relaxing and makes a great spot for a casual business meeting, family outing, or solo escape with your favorite book. Lakeside Cafe also caters corporate and private events, either outside on the lawns, or in a room adjacent to the terrace, and the staff is friendly and never rushes one.

Shoreline Lake and Aquatic Center and Cafe in Mountain View California --  two more reasons why living in the Silicon Valley is so highly desired.

Hayward Park is a small neighborhood in San Mateo California. If you are a first time homebuyer or you are looking for a nice and sunny place to relocate; don’t forget to explore Hayward Park in San Mateo, It could be the ideal place for you to call it home.

    

Near Hayward Park in San Mateo there is a beautiful park called Central Park. The Pak is nested right in the heart of downtown San Mateo and the Main Library, so Central Park attracts residents and visitors from all over the Bay Area. From the park, a short walk will take you to all kinds of shops and many diversified restaurants. This is a very safe, friendly and family oriented neighborhood.

The park has something for everyone from toddlers to adults. Parking is easy, along El Camino Real and under the tennis courts. During the summer, Central Park offers outdoor, musical events and Plays. The Japanese Tea Garden is very pleasant; it has Pond with a lot of fish species and Japanese plants. It is shady in some areas, ideal to avoid the sun during the hot summer days at the park.

There is a little train at Central park, but only operates during the weekends; it is always a huge hit with the small kids; they have a lot of fun riding the train. There are several picnic spots with BBQ areas.  The park is always clean and peaceful.

There are numerous services at the park including:

• tennis courts with night lights

• barbecue pits and picnic tables

• Japanese garden  and fish pond

• Rose garden

• playground equipment

• Ceramic studio

• Mini train

• Softball field

• The snack bar

• Arboretum and gardening clubhouse

• Self Help for the Elderly

• The Recreation Center can be reserve for parties.
  

The first time I visited the park was July 4, 2006; I always wanted to visit Central Park but I never took the time to do it until that July, when my prudential office in San Mateo was hosting our early summer parties. They usually reserved the picnic and BBQ area, so we always have a good time.

I love roses, do when Roses are in full bloom at Central Park it definitely gives me a reason to go for walk to smell the flowers during my lunch break. Right now the roses are not blooming but they will be soon.

If you are looking for a place to call home in San Mateo, I strongly recommended exploring Hayward Park.

To search Hayward Park San Mateo Homes For Sale. I very knowledgeable of San Francisco Bay Area or San Mateo County Real Estate and San Francisco Bay Area/San Mateo Short Sales is my specialty and will help you get your home Sold if you need to sell your home. I can help you buy a new home in San Francisco Bay Area or San Mateo County: Call me today.

If you are looking to buy a home in Hayward Park in San Mateo, this year, it is important to decide what type of property you are interested in before you start your home search.

Mayra is a licensed real estate agent with Prudential California Realty in San Mateo. If you would like information on current homes available for sale in San Francisco Bay Area or San Mateo, call Mayra at 650-996-8961 or email Mayra.espinosa@prurealty.com or you can visit her website. For all your real estate needs she can help you get started today

The I's, meaning the two countries that start with an I have recently raised rates.  Israel raised interest rates in late 2009 and this week India followed suit with an increase in rates.  It isn't just countries that start with the letter I that raised rates in the last few months but this move this week is the one that hit my radar screen the most.  In addition to Israel and Norway raising rates at the end of 2009.  Malaysia and Australia raised rates earlier this month.

The move by India's central bank now makes 5 central banks raising rates.  The Reserve Bank of India said that this is the first of what may be multiple moves to make sure inflation doesn't get out of control from all the cheap money the last 2 years.  Stocks in India didn't respond well with this move.  With the Fed raising the discount rate but not the fed funds earlier this year, they half stepped it as our economy still remains soft.

The effect on mortgage rates seems muted so far but other moves but other central banks are worth watching in the coming months.

Michael

When looking for a farmer's market in San Mateo California to purchase fresh organic produce, make sure you visit College of San Mateo Farmer's Market. 

This is good farmer's market, because it has plenty of parking and easy to find. It is conveniently   open every Wednesday and Saturday, but on Saturdays, it gets a little busier than Wednesdays. This farmers' market has become one of my favorite markets in the bay area. What I like are the fresh salads, fruits and the French bread. Usually the same vendors are there every week, so you get to know them by name. There is one vendor that I usually visit during winter because it fresh peanuts and it great prices.  We have several farmers' markets in different location here in San Mateo County and around the San Francisco Bay Area.

Here is the real list of Certified Farmers' Markets in San Mateo and around the San Francisco Bay Area!  If you know of one, I did not mention here and want to add it, please let me know!

Mayra Espinosa Active Short Sale Listings in San Francisco Bay Area

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  Are you looking for a show/play?   Here's one that I think everyone would enjoy.

Jake's Women is a play by Neil Simon. It centers on Jake, a writer with a struggling marriage. Jake talks to many of the women he knows, both in real life and in his imagination, as he works to save his marriage. Jake, suffering with psychosis and seeing representations of his daughter at age 12, his late wife Julie and recently divorced wife Maggie, is dealing with the inability to write productively and must resolve these issues before he does so.

This fantastic show will be held at St. Ignatius College Prep High School located in the Sunset District of San Francisco.  Tickets are $10 at the door or online at 

http://www.siprep.org/performingarts/fallPlay/FallPlay1.cfm

Come out and support the High School and enjoy a wonderful show.   Showtime is 7 pm Oct 27th through Oct 30.  Don' t miss out!

Stop by a say hello. I'll be running the concession stand.

Have a great day!

Jim Light