Jumbo Mortgage Loan : California: Burlingame

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!

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.

If you own one of the homes in Burlingame, you may want to read this article about details in the proposed budget. The mortgage interest deduction is on the chopping block! Owners of Homes in Burlingame would be effected because many of the homeowners' income exceeds the level that would be effected by this proposal.

Trade-up home buying has a different set of issues to conquer than the first-time home buying process. The first-time home buying process is about education. The first-time home buyer is figuratively diving into the water for the first time. Whether they make a beautiful swan dive or belly flop depends a lot on how well they were educated before they entered escrow by their real estate agent and mortgage originator.

The trade-up home buying process has an element of education, but it is more about coordination. How does the trade-up buyer coordinate the sale of their existing home with the purchase of their new home? Here are nine points that the trade-up buyer and their real estate agent  need to know about in terms of financing to successfully coordinate the disposition of their current home along with the purchase of the new home:

1. Loan approval does not necessarily mean that you should release loan contingency. A loan approval always has conditions. If you are selling your current home, one condition lenders usually have is a copy of the closing statement from the sale of the current home. What happens if your buyer backs out? How comfortable are you with the ability of your buyer to buy your house? You need to find out all of the conditions from your lender so that you know exactly what has to happen in order to get your loan. Do not release loan contingency until you are aware of the conditions and are confident that you can satisfy these conditions.
   
   
2. Your mortgage originator needs your tax returns, even if the loan approval does not require it. Here is why: some of us try to minimize the amount of income tax we pay. Some of us use form 2106, which allows us to report unreimbursed business expenses on schedule A of our tax return. Lenders deduct this amount from your income for qualifying. Sometimes the lenders will not ask for tax returns, but they almost always ask for form 4506-T. Form 4506-T is a summary of the tax return you have filed with the IRS. If you have unreimbursed business expenses claimed, the lender most likely will re-underwrite the file and may even deny the file because your income is not as much as originally presented! Give your tax returns to your mortgage originator to prevent this problem upfront!
   
   
3. If you plan on renting your current home, you may not be allowed to use the rental income to qualify. I recently wrote a post about this subject - Before You Advise Your Client Rent Their Current Home And Buy Another, You Need To Know This!.
   
   
4. If you plan to sell stocks, bonds, and/or mutual funds for the down payment, you are best served selling prior to having your file underwritten. Here is why: If you do not provide proof of liquidation, many lenders will value the worth of your holdings at 70% of the verified amount. Without proof of liquidation, the lender my determine that you are short on cash to close escrow, even if in reality you are not. Prove it now to save headaches later!
   
   
5. Are you trading-up because of a job transfer? Here is what you need: an employment offer letter, clear of any conditions (drug test is an example), and an affidavit signed by you stating that you will provide a paystub within 30 days of closing.
   
   
6. Try your best to nail down your loan amount and your interest rate up front! Here is why: If you increase your loan amount and/or change your interest rate after your lender has sent their initial disclosures, they may require re-disclosure and a new seven day waiting period before they can close escrow! Set it and forget it!
   
   
7. Take care of your credit score before you write an offer. Most lenders use the middle score of three credit repositories. In addition, the qualifying score most use is the middle score from the borrower with the lowest score among all the borrowers involved in the purchase. Credit scores can be changed if there are errors on the report. Work with your mortgage originator to make these changes now rather than while you are in escrow. 
   
   
8. If you want an impound account, set it up after the close of escrow. Here is why: cash to close is one of the issues that often causes a headache at closing. Impound accounts require more cash to close. Why complicate an already stressful situation? Close escrow, call your lender, and then set up the escrow account when there's not as many hoops to jump through!
   
   
9. Don't count on 100% of your retirement funds as cash reserves. Most lenders are now only counting 60% of the value of retirement funds as cash reserves. For example, if you have $20,000 in retirement funds, the lender will only value these funds as $12,000.  

Many homeowners and home buyers in California have probably heard of a bridge loan but do not know what it is or who should obtain one.

A bridge loan is usually a short-term loan (usually written for three months to three years) that provides funds to buy real estate from a piece of real property that an owner has an intention of selling, but will not close before escrow closes on the new property. 

This transaction is called a bridge loan because these funds "bridge the gap" between the closing of two transactions. 

Let's look at an example of a bridge loan. Bill and Betty Buyer would like to purchase their California dream home for $800,000. The down payment required is 20%. They have enough money saved for the closing costs and cash reserves, but little else saved.

Their current home is worth $500,000. The existing balance on their mortgage is $50,000. They have $450,000 in equity.

Bill and Betty would like to make an offer on the new home non-contingent on the sale of their current home. How, they wonder, can they make this offer?

Enter Bob the Bridge Loan Guy. He tells Bob and Betty that he can help them obtain a $210,000 loan on their current home ($160,000 for the down payment plus $50,000 to pay off their current mortgage). Bob the Bridge Loan Guy has figured out that the Buyers can qualify for both the bridge loan and the purchase loan because their debts on both the current home with the bridge loan and the new purchase loan are less than the maximum amount of debts to qualify.

The Buyers successfully make their offer and close escrow 30 days later. Another 30 days later they close escrow on the home they listed for $500,000. They use $210,000 from the proceeds of the sale to pay off the bridge loan, and use the other $290,000 in proceeds to pay down the new mortgage.

A few important tips you should know if you are considering a bridge loan:

• You must be able to qualify for the bridge loan and the loan to purchase the new home.
• There is no guarantee that your current home will sell quickly. How long can you afford to pay mortgages on two homes?
• A bridge loan is usually more expensive than other types of loans. Consider other types of financing (do you have an equity line of credit available, for example?)
• A bridge loan may be available with stated income under the new Reg Z guidelines as of October 1, 2009.

I have found that many people that many people do not understand how mortgage rates get locked here in Burlingame, California, and in many other areas.

As a mortgage broker, I receive mortgage rates from our lending partners every day (sometimes more than once, but that is a story for another post). Each lender has the mortgage rates for each of their programs (30 year fixed, 15 year fixed, etc.) published on a ratesheet. 

Most people realize that there are many mortgage rates for each loan program. What they do not realize is that the points charged for the mortgage rates offered vary by the rate lock period.

Many lenders base the points charged in 15 day increments. Let's look at an example of mortgage rates for a 30 year fixed rate (these rates are for illustration purposes only, not truly a reflection of current mortgage rates).

Rate        15 Day     30 Day     45 Day     60 Day

8.00%        1.00      1.25          1.50        1.75

In this example, the 8% mortgage rate would cost a borrower 1 point for a 15 day lock, 1.25 points for a 30 day lock, 1.50 points for a 45 day lock, and 1.75 points for a 60 day lock.

This example raises two questions about mortgage rates for a homeowner or homebuyer: first, why would I lock for any longer than 15 days since the 15 day lock is cheaper than any of the other lock periods? Second, what needs to happen in order to get the 15 day rate lock?

Let's answer the first question - there are two reasons why mortgage rates should be locked in longer than 15 days. The first reason is because mortgage transactions typically take longer than 15 days. Refinances are harder to close faster than purchases because of the requirement that the borrower has three business days after signing the final loan documents to rescind the transaction. Purchases do not have this requirement. 

The second reason why mortgage rates should be locked in longer than 15 days is because it is protection for the homeowner or home buyer in a rising interest rate environment. Most of my clients are happy to pay a little bit more by locking in for 30 days or 45 days to guarantee they will get the mortgage rates they have been offered, provided their application is approved.

Let's answer the second question - what needs to happen to get a 15 day rate lock? The answer to this question is to work as a team with your mortgage broker.

Mortgage rates are volatile - we often have our lenders update their mortgage rates two or three times per day. Your mortgage broker should use a rate alert service in order to stay on top of the daily activity in the mortgage market. If there is a rate change he should be alerting you about the change. 

The mortgage applicant needs to do his part also in order to get the 15 day rate lock. Documentation needs to be completed in full. Most of our lending partners will not lock mortgage rates until the loan application has been approved, and all conditions for closing have been signed off by the underwriter. As you can see, speed, cooperation and teamwork is required by the applicant and mortgage broker.

Here is a strategy I advocate to get the 15 day rate lock in a declining rate environment. Let your mortgage broker know what mortgage rate and point structure you would like to target. When the mortgage rates are within .25% of your target, get your documentation submitted to your mortgage broker and try to get it approved ASAP. With an approval you can just wait until the rate targeted hits. Again, this takes great cooperation and communication

with the client and the mortgage broker. I have used this strategy with my clients here in Burlingame, California, with excellent success. 

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Recently a friend of mine called me and said that he needed a construction loan to remodel his house in Burlingame, CA. I asked him if he had a construction contract and plans. He said not only did he have those items, he had already started construction!

I asked him why he was calling me now, didn't he already have a construction loan in place? He said no - he was approved for an equity line of credit, but when the lender found out that construction had already started, they could not fund the loan.

I told him I would do my best to find him a construction loan, but I could not guarantee anything. Lenders usually do not like to approve a construction loan application after the project has started. 

After making several phone calls, I found a bank that was interested in funding this construction loan. Luckily, my client was financially qualified, and very organized with his paperwork. We got the loan approved, and it recently closed escrow!

There are several lessons homeowners should know that my client learned from going through this process to obtain a construction loan.

Before starting construction, a homeowner should make sure he has the financing of the project approved. It could be a construction loan, a line of credit, a margin loan, etc. No matter what type of financing it is - have it nailed down. Having financing in place not only makes sure the homeowner can finance the project, but also will save the homeowner from a lot of paperwork headaches and stress!

Another tip when obtaining a construction loan is to alert your contractor that he will need to supply documentation to the lender. This documentation usually is made up of a resume, list of completed projects, insurance, and financial statements.

Regarding financial statements of the contractor, it is a good idea to find out the amount of working capital your contractor has. In many cases suppliers will ask to be paid prior to the bank supplying funds from the construction loan. If the contractor does not have enough working capital to fund the suppliers, they may place a mechanics lien on the project. A homeowner may want to consider writing into their construction contract the ability to pay a supplier or sub-contractor directly if the contractor is unable to. This ability can help avoid an issue with a mechanics lien.

If for some reason construction has commenced prior to obtaining a construction loan, make sure that you keep copies of all receipts and cancelled checks. The construction loan lender will want to see these.

Finally, make sure you understand all the terms of the construction loan. The key points to know are:

• the interest rate and how it can change
• the term of the loan
• how often funds are disbursed
• who the check for funds is made payable to (homeowner, contractor, or both)
• whether or not the bank will provide a permanent loan to take out the construction loan upon completion

Are you interested in mortgage refinancing in Burlingame CA?  I have great news! Mortgage refinancing can now be customized to closely match the term of your current mortgage. 

You may not want a mortgage refinancing because you are thinking "Oh great, I have been paying on my 30 year mortgage for three years, now I am going to start over with a new 30 year mortgage!" You don't want to start over. You don't want to turn back the clock.

Here is the new mortgage refinancing solution for this problem: customized loan terms. Let's look at an example.

Suppose you have paid on your 30 year mortgage for three years, as above. You notice that interest rates are less than what you are paying on your current mortgage, so you are contemplating a mortgage refinancing. Instead of obtaining a 30 year mortgage, you are now able to customize the terms to a 27 year mortgage!

By customizing the terms with your mortgage refinancing, you do not have to turn back the clock! You can stay on the same amortization schedule to get your mortgage paid off.

The rates for this type of mortgage refinancing are determined by rounding up to the nearest published amortization term. In this example, the rates for a 30 year mortgage would be used for a 27 year mortgage.

Suppose you are 53 years old, and you would like to retire at age 65. You could apply for a 12 year mortgage refinancing to have your home paid off at the time of retirement. In this example, rates for a 15 year mortgage would be used because this term is the closest higher amortization term.

Customized mortgage terms are available with amortizations from 10 years to 29 years. Conforming loans and agency jumbo loans (loan amounts up to $729,750 for single family residences in certain counties) are available for customized mortgage refinancing solutions. Properties can be located not only in Burlingame Ca, but also in all parts of California.

Would you like to calculate your customized mortgage payment? Look over to the right under my picture and figure out what your payment will be with a mortgage refinancing.

Do you want to find out the current rates? Contact Me

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It's pretty easy to be lulled to sleep by your option ARM loan. You probably know the rate is adjustable, but you don't pay too much attention because you also probably know the minimum payment only changes once per year.

Wake up! You need to know several important components of your option ARM. There may be a reason to explore refinancing sooner rather than later.

The first thing you need to check is the date your loan started. The easiest way to find this out is to check with your mortgage advisor. If he is a good one, he will have this info on his database.

The date of inception is important because, generally speaking, the lender will re-cast the payment at the end of each five year increment of the loan. Re-casting means re-calculating the payment (usually it is a very large increase) in order to pay off the loan by the end of the term of the loan.

As an example, suppose you obtained a 30 year option ARM loan in August 2003. Guess what? You are going to receive a letter in the mail shortly stating that the payment has been re-amortized to a 25 year loan based on the current interest rate and the outstanding balance. Ouch!

A second component of your option ARM mortgage you need to know about is the maximum balance allowed. Generally speaking, lenders will allow the outstanding balance to increase anywhere from 5% to 25% of the original balance. For example, if you obtained a $500,000 loan with a maximum balance of 110% of the original balance, the maximum the loan can increase to is $550,000.

If it reaches the maximum, the lender will re-cast your payment to have the loan paid off by the end of the loan term. You need to know how much you can allow the balance to increase, rather than being surprised by a letter from your friendly lender informing you of their decision to raise your payment.

The last thing you need to know is about interest rate trends. If you are not near the end of a five year period, and if you are not near the maximum balance allowed, then your decision whether to refinance or not should be determined more by the direction of interest rates.

There is an excellent website, MoneyCafe, that gives graphs and charts of the most commonly used indexes for option ARM mortgages. If you look at this website, and consult with your mortgage advisor, you can make a pretty good guess of the direction of your option ARM mortgage rate. Use this information to determine if you should stay put or pursue another opportunity!

There has not been much change from last week in either the mortgage market or the stats in the local home sale market.

Rates have not moved much this week. That could change tomorrow when the Fed announces their decision regarding the Federal Funds Rate at 11:15 Pacific Time. I am going to go out on a limb and predict that they will not change rates - the consensus is that they will cut .25%.

 Burlingame has 54 single familyhomes for sale with 10 listed as pending - not much change from last week. The lowest priced listing is for $659,000. The highest priced listing is for $2,995,000, which is a $100,000 increase of the highest priced home for sale from last week.

Hillsborough has 55 homes for sale with 3 listed as pending sales, according to mlslistings.com. The price range is between $1,995,000 to $18,000,000. Once again, the highest priced home for sale is in the $2,000,000 price range. We'll wait another week to see if we can draw any conclusions about what is happening in the Hillsborough home sale market.