Question: Bob, We have been investigating refinancing our home and received "good faith" estimates from several mortgage brokers. But these estimates seem to use some sort of "creative financing." We bought our home about a year ago, with a 20 percent down payment, and it has appreciated (especially here in Cape Coral) about 15 percent to 25 percent plus in-market value since then. We plan to stay here about 5 years.
Our current "jumbo" is at 7 percent. Our mortgage broker is offering us a 6 percent fixed interest rate with closing costs of about $2320, plus $8,000 added to the principal balance of our mortgage. Does this make sense to keep the APR (annual percentage rate) down?
Also, we've paid our mortgage down about $4,000, but the mortgage broker didn't take this into account although our mortgage has no prepayment penalty.
- Bob & Doreen P.
Answer: Bob I like your name) and Doreen, please consult at least three mortgage lenders before deciding which is best. Include several mortgage brokers, direct lender banks and mortgage bankers. Compare their offerings.
When refinancing it's not best to pay any loan fees even if you have to pay a 1/8 or 1/4 percent higher tax deductible loan interest rate. The reason is up-front loan costs paid on a refinanced mortgage can only be deducted over the 15- or 30-year life of your mortgage.
Your mortgage broker is using "creative financing" by adding $ 8,000 of his fees to your principal balance, thus making your $ 2,320 out-of-pocket loan costs seem reasonable. His 6 percent fixed interest rate is attractive on a jumbo loan. But he accomplished this by adding most of his charges to the principal balance. That's why you need to interview several more lenders to compare their offerings.
Don't worry. At the loan closing, your $4,000 principal reduction will be used to reduce the amount owed on your refinanced mortgage.
Question: My problem is my ex-husband. He has caused over $50,000 worth of child support liens to build up. This past support is not even for my children. We have been divorced over eight years, but he is still on the title to my home. Because it is a VA mortgage, they want me to buy him out or give up part of the home. I have been making the payments since 1990. It is at 9 percent interest, and I can't refinance because of his liens.
I've consulted two real estate attorneys who have been no help. Bob, what can I do?
- Jenny C.
Answer: Jenny, when you divorced your husband eight years ago, were you awarded the house in the divorce? If so, you should have received a quitclaim deed from your ex-husband. Then his liens for unpaid child support would not have attached to your home.
I'm not sure any attorney can solve your problem at this point. Your divorce attorney should have made certain you received a quitclaim deed from your ex-husband at the time of the divorce.
Other than selling the home and paying off the $50,000 of your husband's child support liens , I don't see anyway out of this mess. If any of my readers have a better suggestion, let me know and I'll pass it along.
Question: After years without regular board meetings, the president of our homeowners association agreed about six months ago to have board meetings about every other month.
The notice never includes an agenda. The president calls a board work session a week before the meeting. Only the board members attend to and make decisions for the association.
I have said because this is a meeting of the majority of the board members, that the meeting should be open to the homeowners. I have read our documents and see nothing about a work session. Our president says that it is perfectly legal to hold these meetings. Consequently, at the open board meetings, nothing of any consequence is discussed because all the discussion and decisions were made at the work session. The president doesn't want any conflicts at the open board meetings.
Should we be opening these work sessions to our homeowners and operate in the Sunshine. Can you direct me to a document that addresses this question?
Answer: Homeowner associations are not required to publish an agenda with the meeting notice. Condominiums are required to publish the agenda, but I recommend that HOAs follow these requirements.
Workshops or work sessions are not recognized as legal meetings by the state. Statute 720-303 says that a meeting of the board occurs when ever a quorum of directors gathers to conduct association business.
Condominiums have similar requirements found in statute 718.112.
Simply put, if you have a quorum, you have a meeting that must be announced and open to the members. The key is quorum. You have directors meet when there is less than a quorum. As always consult your attorney.
Happy Mothers Day.
Have a real estate question? Write, call, fax or e-mail:
Bob Jeffries, Realtor,
Century 21 Birchwood Realty, Inc.
4040 Del Prado Blvd., Cape Coral, FL