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Since I am about to engage a lawyer to sue my current mortgage company for overcharging me in violation of a clearly stated Federal law, I think it might be a good idea to refinance my rental property on which they hold the paper. My bank won’t do mortgages on “commercial” property, nor will the mortgage broker that I originally used when it was my residence.
Assuming that they will actually write the loan, are there any “gotchas” in just going to the mortgage broker that lists the lowest price on the Internet or in the local paper? What kinds of problems can one run into if one isn’t able to do any research on the broker? I assume that home mortgages are pretty much a commodity as they are regularly traded from one mortgage lender to another (as mine was).
Alternatively, does anyone have any recommendations for a mortgage broker in the S.F. East Bay area. (Also does anyone have any good recommendations for an good but inexpensive real estate lawyer, hoping that is not an oxymoron, in the same area as the one recommended to me hasn’t gotten back to me.) If you have some suggestions but don’t want to broadcast them here, send me e-mail at [email protected]
OK, so it isn’t exactly Fine Homebuilding, but it is about keeping a pretty nice little 50’s ranch style…
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Your financing options depend on how you own the property. It sounds like this property is a 1-4 family, which typically means it gets a residential mortgage, unless title is held by a commercial enterprise. For example, if you formed a parternship or LLC to own rental properties, you would need to find a bank that would lend to your company. This type of loan does not get resold, so if this is your situation, look for small banks with a few branches who will offer you a portfolio loan. You'll pay a slightly higher (1/4 pt) rate than a conventional mortgage.
If you own the rental property yourself, you should have no trouble refinancing with a conventional mortgage, even if you do not live there. Personally, I would avoid mortgage brokers or internet operations that don't seem very secure. Cheap doesn't always win. A lot of personal information gets tossed about in this process, and I don't feel comfortable unless I'm sure of who I'm dealing with. My preference is small, local banks with several branches, as they typically offer better rates than the big ones (e.g. Wells Fargo, Chase, etc) and better service. This type of mortgage is sold on the open market, so the terms should be pretty standard.
As for things to watch for, try not to pay any points, and make sure there's no prepayment penalty. Examine the truth-in-lending statement carefully to determine what costs you're paying. In Wisconsin, total closing costs shouldn't exceed $1,000, I don't know about Bay Area. But talk to several different lenders to get an idea of what reasonable closing costs and appraisal fees are. Excessive charges or vague items on this statement spell trouble.
One final note... depending on the amount at stake, I would carefully consider whether it's worth it to sue the mortgage broker. Even if they are bastards, the time, aggrivation, and expense involved may not be worth it in the end. Seems to me, these type of situations, only the lawyers win. Plus, with rates cheap, you should be able to get a good deal refinancing, and be done with it. My two cents..
Good luck!
*Hi Casey,I'm not good for a long post tonight but, the topic is interesting.I woke up this morning better than half way down there, Klamath Falls. Back in Portland metro tonight 500+ miles later.My last broker nicked me. When called on it he lied, rationalized, and otherwise obfuscated. Refinancing this moment here in Portland. Pleased with broker here so far. My brother lived in Frisco for years. I could hit him up for referrals if you want. Those types (lawyers, money brokers) are possibly the kind of people he networked with down there. He's in Denver now for about 4 years.joe d
*i Those types (lawyers, money brokers) are possibly the kind of people he networked with down there. He's in Denver now for about 4 years.The juxtaposition of your words makes it sound like your bro is in the big house. Sorry, Joe, but I couldn't resist. ;)
*Casey, if you are involved in rentals, you probably should join a real estate investment club. I'm sure there is a chapter in SF. You will find all the things you need there.Shopping for mortgages is not that risky. Just keep asking questions about their fees. If you don't feel comfortable with the answers, your broker is probably hiding somehthing. Brokers sort through hundreds of programs that will loan anyone anything. If your broker doesn't re-fi commercial loans, find someone that will.I hope you're not re-financing just because you were overcharged on the loan app. That would be biting off your nose to spite your face.Ask for a refund on the portion of the loan that you feel wronged. If they refuse, report them to the state division that oversees mortgage lenders and their practices. There is a lot of pending legislation to reign in unscrupolous lenders.Generally speaking cheaper is better. If you are only doing one deal, find the cheapest. If you are doing more, than sometimes a slightly more expensive broker is better, especially if he finds creative money and gets difficult projects done. If you are doing a lot, relationships with your professional team is important.blue
*CasyI don't think that this applies in your case, but I will post it for lurkers.Many of the brokers are on commissions there first quotes will be for higher interest and/or points, as there commissions are higher."Renting money" is like renting anything else. Shop around for the best deal.
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Since I am about to engage a lawyer to sue my current mortgage company for overcharging me in violation of a clearly stated Federal law, I think it might be a good idea to refinance my rental property on which they hold the paper. My bank won't do mortgages on "commercial" property, nor will the mortgage broker that I originally used when it was my residence.
Assuming that they will actually write the loan, are there any "gotchas" in just going to the mortgage broker that lists the lowest price on the Internet or in the local paper? What kinds of problems can one run into if one isn't able to do any research on the broker? I assume that home mortgages are pretty much a commodity as they are regularly traded from one mortgage lender to another (as mine was).
Alternatively, does anyone have any recommendations for a mortgage broker in the S.F. East Bay area. (Also does anyone have any good recommendations for an good but inexpensive real estate lawyer, hoping that is not an oxymoron, in the same area as the one recommended to me hasn't gotten back to me.) If you have some suggestions but don't want to broadcast them here, send me e-mail at [email protected]
OK, so it isn't exactly Fine Homebuilding, but it is about keeping a pretty nice little 50's ranch style...