Shifting to a different East Bay neighborhood nets larger home

Mortgage agent: John Holmgren. Property: Single-family home in Oakland. Property value: $610,000. Loan amount: $488,000. Financing terms: 30-year fixed at 4.375 percent with no points. Backstory: Holmgren’s clients owned a small home in the Berkeley Bowl neighborhood of West Berkeley. They wanted to move to a larger home to accommodate their two growing sons but found that larger homes in their very popular neighborhood were selling above their price range.

Being creative and handy at home improvement projects, they also wanted a home that they could remodel to meet their needs. Because their kids attended a private school, they didn’t have to worry about school districts when choosing a new home.

Their agent, Linda Andersen with Better Homes & Gardens Real Estate in Berkeley, recommended the Maxwell Park neighborhood of Oakland as an area with fixer upper homes at reasonable prices. In addition, since that neighborhood was not too far from their kids’ private school, it made perfect sense to search for homes there.

While they prepped their prior home for sale, they met with Holmgren to strategize about how to structure their financing. Because they had incurred debt remodeling their home, their credit scores were not high enough to qualify for the best loan terms even though their payment record was flawless.

Based on an estimate of their home sale proceeds, Holmgren recommended a combination of debt reduction and a down payment that would enable them to put 20 percent down on the new home, pay down their debt sufficiently to improve their loan terms and reserve some funds for renovation of their new home.

Their Berkeley home sold readily and they moved into a short term housing situation while they located a replacement home and implemented Holmgren’s debt reduction recommendations. By proceeding in this way, they were able to make a stronger offer and get better financing. The new property purchase closed in 30 days.

After close, the clients contacted Holmgren because they had designed a remodel that would require more funds than they had planned. Holmgren assisted them in arranging a home equity line of credit that enabled them to borrow 90 percent of their new home price, unleashing approximately $60,000 to enable completion of their dream home.

John Holmgren, Holmgren & Associates,

(510) 433-8809, john@mortgageholmgren.com.