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Just Approved: Cleaning up credit clinches purchase

Published 6:16 pm, Friday, October 11, 2013

 

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Mortgage broker: Gary McDonald

Property type: Single- family home in Hayward; inherited from estate with other heirs; no down payment purchase

Loan amount: $162,000

Loan type: 30-year fixed

Loan rate: 4.750 percent with 0 points

McDonald's client had lived with her elderly mother for 10 years, taking care of her until she died.

The daughter wanted to purchase her mother's home from the estate, but had less than $1,000 in the bank and spotty credit.

McDonald worked with his client to clean up her credit and improve her scores. He structured the purchase as a cash-out refinance, which allowed her to buy the home with no cash out of pocket, giving her enough cash from the new loan proceeds to pay off the mother's mortgages on the home, and buy out the other heir's interest in the home.

There was an additional challenge to overcome. The probate attorney couldn't schedule the court hearing to approve the award of the mother's home to the heirs until after the borrower's interest rate lock expired.

Because of McDonald's previous experience dealing with inherited properties, he had planned for this possibility, and was able to extend his client's interest rate lock at no out-of-pocket cost to her.

McDonald's client now owns her first home with a safe 30-year fixed rate loan, with monthly payments that are comfortable for her budget.

Gary McDonald, Holmgren

& Associates, (510) 276-2122, garymcdonald4loans@gmail.com