Florida Mortgage : Learning Center

Successful FL Realtors depend on  FL Mortgage Professionals to stay informed of current mortgage related guideline changes.   Last week we were speaking with the top producing Realtor team in West Volusia County.  We learned that many home buyers were asking for low down payment options; so we broke it down from one question that must be asked:

• Are you a United States Veteran? 

If the answer is yes; then we can discuss the advantages of obtaining a guaranteed FL VA home loan.  With loan amounts under $417K, there is no down payment requirement, no PMI (private mortgage insurance) and of course no down payment.  And sellers can contribute up to 4% towards the buyers closing costs.  What a great program!

The savvy  FL Realtors, however, bring up the cost factor of the VA Funding Fee.  This is usually rolled into the loan amount and costs 2.15% of the mortgage amount borrowed.  If the Veteran has used his Entitlement on a previously owned home; the VA Funding Fee can jump to 3.3%.  That can be over $10k for FL home purchases over $300k.  But there is a VA solution.

Have the Veteran put down 5% and the VA Funding Fee drops to 1.5% for subsequent Entitlement users.  A 5% down payment VA home loan still has no PMI which can save the Veteran thousands over the life of the loan.  Compare that with any, if available, conventional loan with PMI.

I am getting carried away – but I truly love sharing specific VA home loan information.  Remember, if down payments are an issue, ask if your buyer is a Veteran.  If not, lets look at USDA Rural Housing or an FHA home loan.

So much more to talk about.  Call me if you have any questions regarding pre-qualifying your next home buyer.  My name is Stephen Thaggard and I can be reached at 407-733-6425.

Starting January 1st, 2010, Realtors, Title Companies and Mortgage Professionals are going to engage in entirely new procedures with their first time home buyer clients.  We are not only going to experience new mortgage Good Faith Estimate formats and final HUD-1 Settlement Statements; but the way we do business will shift entirely. The revised requirements, compliments of new RESPA rules for 2010, will change  the way FL Realtors, first time home buyers and their FL Mortgage Professionals function.  Our mortgage industry is about to change dramatically.  Are you ready for January 1st?

Here is a just one example of change to come.  We are all used to getting “pre-approved” for that new home and perhaps even receiving an upfront Good Faith Estimate all while searching for that new dream home.  Starting January 1st, Good Faith Estimates cannot be provided unless you have a complete mortgage application.  A complete application is not an application unless there is a property address recognized.  So much for pre-approvals while searching for that dream home.

We will start seeing more pre-qualifications and Good Faith Estimates that are for illustration purposes only.  Without a property address home buyers get practically nothing.  Realtors and home buyers are going to have to depend on experienced FL Mortgage Professionals with specific knowledge of current FHA, VA and conventional  mortgage programs. 

Change is good; and in just a few days the mortgage arena will change and how a first time buyer shops for their new home will never be the same.  Fun times – for Mortgage Professionals who always disclose everything upfront to their home buying clients.

Aimed at providing clearer upfront mortgage disclosure with easily comparable standardized Good Faith Estimates;  the RESPA 2010 rules begin January 1st.  One of the enhancements is enforcing quoted lender or bank fees, with a “no tolerance” rule.  That is, once you have received your Good Faith Estimate, the mortgage lender or banks charged fees cannot be changed; period.

This is tough news for those mortgage knuckleheads who were ambiguous with changing initial quoted interest rates and/ or adding additional discount points and other miscellaneous mortgage fees at closing.  You know, the ones who preyed on first time buyers who perhaps didn’t know that changing the mortgage terms at closing violated laws already written. 

For career minded and experienced Mortgage Professionals, however, the new RESPA changes are welcomed.  Disclosing upfront closing costs and delivering the same at closing is par for the course.  It’s interesting that the entire Good Faith Estimate had to be reinvented with tolerance laws when we could have simply enforced laws already in place.  Besides, these new RESPA changes are about 5 years late and most of the rogue rip-off mortgage bankers and brokers have left the industry.

2010 is destined to be a great year for those who have survived the FL mortgage market.  Let’s embrace the RESPA changes which are simply trying to put first time home buyers in a better position, and saving them money, while shopping for their new mortgage.

When a first time home buyer chooses a Realtor and begins the search for their new dream home; most are hoping to keep as much of their savings to furnish or spruce up their home.  There are a few mortgage programs with low down payment requirements, and scenario considerations as follows.

The best mortgage program available with no down payment requirement, is a VA home loan.  Our hero Veterans  may qualify for their first home without the need of any down payment.  In fact, the seller can even contribute up to 4% towards the Veterans closing costs and prepaid interest, property taxes and homeowners insurance.  With little or no out of pocket expense, Veterans can keep more of their savings and earn interest instead of paying interest.

Another practical first time home buyer program is the use of an FHA mortgage loan.  FHA mortgages allow first time buyers to put as little as 3.5% towards a down payment.  Keep in mind, HUD is considering changing the 3.5% to 5% soon – so get your Realtor and call your FL Mortgage Professional to secure a contract soon.  Also, sellers can contribute up to 6% towards the buyers closing costs, prepaid interest, property taxes and homeowners insurance.  At a loan-to-value of 96.5%, FHA has proven to be the most popular mortgage loan of first time home buyers.

Although there are more  mortgage programs with little or no down payments; the VA home loan and FHA mortgage loan seem to serve first time buyers the best.  For more information on these mortgage loans and more please contact your favorite FL Mortgage Professional.

When shopping online for a new FL mortgage to purchase your next home or to refinance a current mortgage; many FL Mortgage Professionals recommend the following safeguards to protect your best interest.

• Work with a FL Mortgage Professional who will provide upfront Good Faith Estimates.  If they won’t put it in writing – call someone else.
• How experienced is your Loan Officer?  Experience will not only save you time and money; you’ll find the mortgage loan that suits you best.
• Comparing low interest rates is only important if you are comparing closing costs side-by-side.
• Thinking about refinancing?  Ask about long term interest savings and recovery periods.  Your experienced Mortgage Loan Officers will assist as these are imperative when refinancing.
• Don’t think you are locked into an interest rate until you receive an interest rate lock-in agreement in writing.  Ask for it – and read the details (lock in period, rate, etc.)

Whether you are working with a large bank, a small mortgage company or anywhere in between; it’s the Mortgage Professional who will pave a smooth path for your next FL mortgage need.

As we bid adieu to Ida and approach the Thanksgiving season, we realize hurricane season has almost ended for us FL homeowners.  Homeowner insurance companies fared well with respect to hurricane damage claims.  In fact, FL home buyers actually closed on their new home purchases without insurance incident. 

Remember back in 2004 when we were visited by the likes of Hurricanes Charley, Frances, Ivan and then Jeanne?  Every time a new home buyer was ready to close on their new home; banks required re-inspections.  And once those re-inspections were completed; we needed more because of the next storm.  What a year in FL mortgage closing mayhem.

It is always best to shop for your homeowners insurance as soon as you have contracted on your new FL home – especially during hurricane season.  Remember, once a tropical storm warning or watch is in effect, it is practically impossible to close on a FL mortgage.  One of the best websites to follow during the hurricane season is https://www.citizensfla.com/stormseason/index.cfm.  There you can find current storm restrictions that may affect your FL mortgage closing. 

Only 20 more days left and we are technically out of the hurricane storm season.  Then we have 7 months before the 2010 season starts.  We recommend reviewing your homeowners insurance policy and contacting your local professional insurance agent.  Your insurance agent may be able to improve your overall coverage and perhaps even reduce the monthly payment.

We have all seen them.  Advertised FL mortgage fixed interest rates that seem too low or too good to be true.  Whether you are looking at FL FHA mortgage rates, FL VA home loan rates or conventional loan rates; some rate seem much lower than any others.  Some are printed in the local newspaper and can be easily compared to other local lender rates.  Others are advertised on the television with promotions like; this sale ends on November 30; or fixed rates under 4.5% (currently?).  Thousands of mortgage lenders or banks advertise their mortgage rates everyday on the Internet.  And some of those rates are awesome – or are they?

The truth about advertising interest rates for home buyers to compare is; not everyone is advertising within the same parameters.  Many newspaper ads come with a fine printed disclaimer which states the interest rates advertised may include a discount point of 1% or an origination fee of 1%.  Television ads are the same – the devil is in the details – or very fine print.  If you have a large screen and can pause the ad; try reading the disclaimer about their interest rate.  One very well known company claims that the rate displayed includes 2 discount points!  Wow – that’s expensive.  And the Internet marketers for mortgage rates always have a small link located somewhere on their interest rate page.  That link will provide details like additional discount points, additional lender fees, and more.  The rate all of a sudden doesn’t look that attractive.

Yes – in today’s FL mortgage markets you must either read the fine newspaper print; purchase a larger television so you can see the details; or spend hours online searching for the truth about that low fixed mortgage rate.  Or – you can call an experienced and trusted Mortgage Professional; who will provide an upfront Good Faith Estimate detailing everything for fair comparison.  Remember, if it’s too low, look for the truth or pick up the phone, inquire and ask for an upfront Good Faith Estimate.  If you have any FL mortgage question related to interest rates please email or call 321-987-9876.

When FL Realtors write VA home loan contracts for first time home buying Veterans – they are always concerned with the “seller” fees.  How much does the seller have to pay because the buyer is a Veteran?  Is that fair?

One of the many benefits of being a United States Veteran and purchasing a new home, is not having to pay any junk fee or bank fees usually associated with a FL fixed rate mortgage.  Over the years many have deduced that since a Veteran buyer cannot pay for certain fees, that those fees fall on the responsibility of the seller.  This is simply not true.  The rules are that the Veteran cannot pay certain bank fees. 

There are usually 2 ways to cover the costs of these fees when FL Realtors are writing VA home loan contracts.  One is to, of course, charge the seller.  Everyone knows this method – and its results are unfortunate.  Veterans can’t simply enjoy their earned benefits; but now have to impress additional fees on would-be sellers. 

Another is to have the Lender or bank charge an origination fee shown on their VA good faith estimate.  This is a fee of up to 1%, of the loan amount, that covers the costs of underwriting, processing or document preparation – which would normally be charged on a conventional type mortgage.  No true savings for Veterans with this method.

There is a better way.  Find a bank or lender that will simply not charge the Veteran, or the seller.  The bottom line is the bank would make a little less by covering Veteran costs; but the Veteran wins by not having to shop for a seller willing to give up something more.

This is a way to give back to Veterans who certainly have earned their benefits using the VA home loan.  Realtors writing contracts for their Veteran clients can write without having to calculate additional seller paid fees.  For more information on this; ask your FL mortgage professional for a VA good faith estimate, upfront.

Low down payment mortgages still exist in today’s tighter lending environment.  Once  I recognize a first time home buyer; 3 current FL mortgage programs come to mind.  They are USDA Rural Housing, FL VA home loans, and of course, FL FHA first time home buyers.

Mortgage professionals must inquire whether a first time home buyer is a Veteran or not before beginning to determine a FL mortgage solution.  A qualified Veteran seeking a VA home loan will enjoy no down payments, no monthly mortgage insurance, and seller contributions ( up to 4%) towards the Veterans closing costs and prepaid taxes, insurances and interest.

If the first time buyer is not a Veteran, then determining where the first time home buyer is purchasing should follow.  The USDA Rural Housing program allows 100% mortgage financing but is limited in geographic locale.  Your FL mortgage professional should be able to provide more information with this FL mortgage loan which allows no down payments, no private mortgage insurance and seller contributions of up to 6%.  In fact, the closing costs can be rolled into the loan amount if needed; saving you more money out of pocket.

The next best and most popular FL mortgage program geared for first time home buyers is the FHA home loan.  FHA allows a small 3.5% down payment, seller contributions of up to 6% towards the buyers closing costs and prepaids, and all of this can be a gift from a relative or family member. 

Today’s FL mortgage markets are much tighter than previous years; however, there are still several options for FL first time home buyers to consider while purchasing their first home.  Experience is the difference between spending too much money with the wrong FL mortgage loan.  Get it right – ask for experience.

The Florida mortgage markets have evolved in hopes to improve home buying opportunities for many first time home buyers.  The missing links, however, remain the same.  Where does a first time home buyer go to learn more about current FL mortgage programs, including FHA, Home Path, and USDA?  How can a Veteran get answers with a new FL VA home loan while overseas?  Where can a Realtor look to find solutions to client questions as they search for their new FL home loan?  Watch for our website makeover – coming soon!

BeechTree Mortgage will be the online destination to find solutions to many mortgage related questions.  The new site will provide current mortgage program details to better educate home buyers before they search for their new home.  Mortgage programs will include FHA, VA, Fannie Mae, Freddie Mac and more.

We are very excited as we transition our very popular website into the best mortgage specific place to find answers you may not be getting.  Today’s FL mortgage market requires transparent and upfront mortgage disclosure; and the new BeechTree Mortgage will be there to assist you wherever you go to obtain your new FL mortgage.  Stay tuned…