San Francisco Refinance Stories: A Challenging TIC Conversion

Six years ago, three couples purchased a 3 unit building together on 24th and York Streets. They had only put down 10%, and they knew they would need to wait years to build up enough equity to refinance, not to mention waiting to see if they would ever win the TIC Lottery. One member of the group figured out a way to fast-track their conversion, and they were finally ready to refinance in March of this year. We started the process, and one of the owners changed jobs, so the process was delayed while he gave notice and received his first paycheck at the new job. As we moved through the process, two more of the owners switched jobs, which meant more documentation and patience on everyone’s part. (Actually, the last person who switched jobs didn’t remember to tell us, and we had no idea until we were performing our final audits!)   The entire process took about 75 days, but by the time we were ready to lock in their interest rates, they had gone down, so it was all good!

Should I Cancel My Credit Cards Before I Buy a House?

To many potential home buyers thinking about mortgage pre-approval, it seems logical to pay off and cancel their credit cards to “make room” for a new mortgage.  While paying off cards is a good idea, canceling them is not.

Many people don’t know that when you close down a credit line, you are actually erasing part of your credit history and potentially lowering your credit scores. The FICO scoring system focuses on your current credit more than anything else, and FICO is looking for active accounts with an excellent payment histories.  Don’t cancel those cards – if you are no longer using a particular credit card, I  suggest that you cut up the card, but don’t cancel it.

This advice is even more crucial if you will be applying for a jumbo loan (in the Bay Area, that’s a loan over $625,500).  Jumbo lenders require that you have at least three credit lines open and active, so it’s really important to keep those cards open and to use each one at least occasionally, say every six months or so.

Oakland Home Buyer Stories: Previous Short Sale Didn’t Prevent Home Buyer Happiness

We just worked with a couple who were priced out of the City, and became interested in the East Bay. They found a wonderful home in Montclair – 3 bedrooms, 2.5 baths, 2300 square feet for under $850,000. How would they obtain financing when the husband’s credit was less than stellar, and the wife had just closed on a short sale two years ago? First, we made sure they would qualify based solely on the wife’s income, and left the husband off the loan, but still on the title.  Then, we verified that the short sale had taken place more than 24 months ago by obtaining a copy of their closing statement.  Because they had 20% as their down payment, we were able to get them a 30 year fixed rate mortgage at 4.5% with a rebate towards closing costs and closed escrow in 21 days. Our buyers were ecstatic! (“Thank you so much Natasha and Sara. You gals are the best!”)