Home buyer seeks alternatives to high-rate loan offer
Q: We found financing for a home, but because of our credit history (which we're repairing), the firm that accepted us wants 27 percent down and will charge 10.25 percent interest. We have $5,000 - which isn't enough - and have hit a brick wall. The home we now rent is on the market, so we're open to any suggestions.
D.N., via e-mail
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A: From the sound of it, you've landed in "subprime" territory, where lenders make loans to people with spotty credit records. But as you've discovered, they'll want more security in the form of a large down payment, and will charge you more than they would a "prime" borrower with grade A credit.
It's good that you're patching up your credit record, but with your rental home on the block you're too short on time to get your score lifted to the point where you'd qualify for a prime loan. Still, certified financial planner Patrick Van Nice, of West Des Moines, Iowa, suggests these options:
• Talk to a community bank. Perhaps you can bring a cosigner on board to convince them to loan you money.
• Consider an adjustable-rate mortgage. While rates on these loans change during their lifetime, they beat out fixed-rate loans in the short term. For instance, Mr. Van Nice shopped around for someone with a credit score of 600-639 and found a three-year ARM that costs 8.75 percent interest with 10 percent down.
• Consider tapping a 401(k) or IRA if you have one. Some employers will allow you to borrow from a 401(k) to buy a home, and it's permissible with an IRA for a first-time buyer. Rules on these kinds of loans can get tricky, however.
• Get in touch with your state housing-finance authority. They are in the business of providing affordable home loans, and you may qualify. Every state has such an authority. To find one where you live, log onto www.ncsha.org, the website of the National Council of State Housing Agencies.
Q: In 1957, I found two stock certificates in a steamer trunk. The stocks, listing me as the owner, were issued by Minnesota Mining & Manufacturing, now known as 3M. They were purchased by either my late uncle or my father in the 1920s or '30s. I have since lost the certificates. I contacted 3M and also hired an attorney to research these, but came up empty. Can you help?
D.H.K., Ridgecrest, Calif.
A: It's a little surprising that you got nowhere with 3M Co., which is one of the Blue-est Chip companies around and has a longstanding reputation of doing right by its shareholders.
Leonard Rosen, president of Paper Chase International, which helps investors hunt down certificates such as yours, suggests that you contact 3M's controller, or perhaps its accounting department, to find out who the company's transfer agent was at the time the shares were issued. These third-party companies maintain records of stock ownership, dividends, and the like. Even if your shares were bought 60 or 70 years ago, 3M would have had a transfer agent at the time. If 3M handled this paperwork on its own, there should be records going back that far, Mr. Rosen says.
"There's a certain responsibility that a company has to a shareholder," says Rosen, and the corporation doesn't try to keep secrets about who is or was its transfer agent (sometimes called a custodian). Nor should it take a lawyer to get involved.
But businesses such as his (www.paperchaseintl.com) will get involved if you really don't feel up to the task. While some stock-search firms charge an up-front fee, Paper Chase charges only if it succeeds in tracking down the certificate.
Q: Three years ago my elderly neighbor went into a nursing home. His son gave me a sealed cardboard box for "safekeeping" before his father moved out. After that, I did not hear from the son, who had to return to his home in Switzerland. I recently learned that his father has died. I opened the box and found that it was full of old coins as well as a set of lead toy soldiers which must be quite valuable. If I don't hear from the son, am I entitled to keep the contents of the box? Am I obligated to try to get in touch with a daughter, whose address I have? I am thinking that the father may have intended for me to have the contents of the box because I did quite a bit for him before he moved out. And when I last visited the father in the nursing home he told me to be sure to keep the box safe.
Name withheld, via e-mail
A: You could either notify the family or wait to see what happens, but right now the coins and toys belong to your neighbor's estate, says Alfred Brophy, professor of law at the University of Alabama. That's because in order for your neighbor (or his son) to make a gift of the box and its contents, he had to both intend to give it and deliver it.
While you might assume that he thought you deserved the money for taking care of him, there's no evidence of intent to give, says Professor Brophy. When the box was delivered, it was for "safekeeping," not as a gift.
Brophy says you could treat the box as abandoned property. This move requires that you give notice to the people you think are its current owners. If they fail to claim it, it would be yours.