Ask a Broker: Where should we shop for a loan online or around the corner? [07/02/2005]

By Peter G. Miller

Q: My wife and I are senior citizens about to buy our first house. We're thinking of taking out a mortgage for $100,000 and putting up an equal amount in cash. Our real estate broker, who is acting as a dual agent, recommends a local lender. We want to consider an online loan source. Which is better?A: As a borrower your goal is to get the best rate and terms, the best program, from a lender that can deliver the loan you need. It may be that the broker is recommending a local lender because of good experiences with that source. However, you're best served by speaking with several loan sources. It can't hurt.With 50 percent down you represent minimal lender risk and will likely qualify for a good rate. Ask lenders to suggest loan options. Consider the annual percentage rate (APR) and also ask for "par" pricing the interest rate without points. Some people find par pricing is easier to use when comparing loans.As to your broker acting as a disclosed "dual agent," that means the broker may represent both the buyer and seller in a single transaction. Such agency status should not impact the recommendation of one lender or another.Q: Three or four years ago my brother was in a difficult situation with credit card debt. He owed about $30,000. His wife would only agree to a loan if he signed over his share of the house. They have been married more than 50 years; the house was free and clear, paid for by him. Because of the stress he was under from creditors, he agreed and has continued to make the monthly payments on the loan, which was approximately $55,000 (she did some remodeling and added that to the loan). Creditors, of course, were all paid off.They are now about to be divorced. Is there any chance of him being able to regain his share of the house?A: It is extremely difficult to untangle who owns what after 50 years of marriage. No doubt a judge will ask if any of the $30,000 in credit card debt benefited the wife. Also, if your brother is in a community property state such as California, a judge will want to know if the home was acquired before or during the term of the marriage. The time of acquisition may be important in resolving this matter. Your brother will need to speak with an attorney for specifics.Q: My wife and I are in the process of moving up from our townhouse into a single family home. We have a strong seller's market here, but I'm afraid of buying property and then having prices fall. I'm confused and not sure what to do. Can you make some suggestions?A: Nobody knows what the future will bring. That said, real estate is a local commodity. Look at population and job growth in your community and see if new home construction is keeping pace. Get a 30-year, fixed-rate loan now, just in case rates rise. Buy a property at the bottom of your price range, a property that meets your long-term needs and one that you'll enjoy.Q: How do you determine if a waterfront home is considered seasonal or year round?A: Ask if a reasonable person would be able to live year-round in the property as it is now constructed. Also ask about past uses of the property.Q: Can a real estate broker intentionally answer a buyer's question dishonestly?A: A real estate licensee has an obligation to treat all parties in a transaction fairly. Lying to a buyer or seller hardly seems fair.However, one would need to know more about the specific facts and circumstances involved in the matter before making a judgment. For example, did the broker tell the truth but the buyer misunderstood? Did the broker tell the truth but circumstances changed? Think of a sudden interest-rate jump that makes a home less affordable.Q: I'm studying to be a real estate agent. I can pass the general part of the required exam, but not the part about state rules. I have taken and failed the test several times. What can I do?A: Ask your instructor if he or she can act as a tutor. Take a different practice exam once or twice a week and then review the logic of each question. Why is an answer right? What's the principle you're supposed to understand? Content That WorksDo you have a question or a quandary about buying, selling or renting? Peter G. Miller, author of The Common-Sense Mortgage, specializes in providing real solutions to real estate dilemmas. E-mail your questions to peter@contentthatworks.com.