Florida Mortgage : Learning Center

When first time home buyers are searching for their new Florida home; or Florida residents are seeking to refinance, the focus is always on the rate.  Of course obtaining a low fixed rate mortgage is everyones goal but don’t forget the closing costs.  When mortgage lenders, banks or mortgage comparison websites are advertising their fixed rates; watch for hidden discount points.

I was asked to look at the national average fixed interest rates as posted on the front page of www.bankrate.com and comment.  Their current national average for a 30 year fixed rate is 5.52%.  This is a great rate, as long as you are not being charged discount points on top of closing costs.  At the bottom of these rates, written in the framed area, reads “rates may include points”.   Discount points should be optional costs used to buy-down the interest rate.

When you look further to get a quote from a reputable lender you find that a 30 year fixed rate mortgage in Florida is currently at 6.0% with no discount points.  But keep reading, the fees listed per lender are charged on top of closing costs.  Thats why it is very important to ask for a Good Faith Estimate upfront and to compare not only the fixed interest rate but also the closing cost total.

Remember, collect only accurate Good Faith Estimates from your favorite mortgage lenders, banks or credit unions and contact a Mortgage Professional who can help answer questions regarding which Florida mortgage program best suits your needs.  Interest rates are one thing but don’t lose focus on closing costs.

In an effort to keep our economy from falling into a recession; the central bank came out this afternoon with Ben Bernanke’s announcement of lowering the Fed Funds rate by .50%.  This will help Florida homeowners  paying interest on their home equity lines of credit.  We should also see an improvement in car loans and credit card rates.

Since many banks and mortgage lending institutions already factored in the expected .50% drop; we may not see a dramatic move in lower fixed interest rates for Florida mortgages.  If rates, however, do improve today or tomorrow; even the slightest improvements; my recommedation is to grab it while it’s there.

Remember last week when the Feds lowered by .75%?  Interest rates available to Florida homeowners and home buyers dropped immediately.  But after a 2 day run , Florida mortgage rates ended up higher than they were the week prior to the surprise rate drop.  

Keep yourself ahead of where rates are and always lock-in when you have the opportunity.  The mortgage mess isn’t over and with conventional tightening of mortgage credit everywhere; I expect volatility to be at an all time high. 

At 2:15 PM this afternoon we will learn of Big Ben’s interest rate cut.  Keep in mind this hopeful rate cut directly affects the interest rate that banks trade on overnight delivery of loans.  What we are anticipating is how this reduction in banking interest rates moves fixed Florida mortgage interest rates.

Expectations are the Feds will lower the Fed Funds Rate by .50%.  In theory, if banks are lending to each other at lower rates then they will pass at least part of that reduction on to the consumer mortgage market.  If this Fed Funds Rate is not lowered or lowered by only .25%; then we may see a slight increase in available consumer fixed rates.

I believe the big focus on big Ben is not only the interest rate drop but the language regarding their outlook on the economy in the near future.  If they are positioned for additional rate drops then banks and mortgage lenders should ease and Florida interest rates may improve.  We will have to wait and see. 

The House has changed their position and is now pushing to increase the mortgage loan limits set by Fannie Mae and Freddie Mac.  Currently that limit is set at $417,000 and is expected to jump to $625,000 across the board. 

This change could dramatically improve the lives of many Florida residents seeking jumbo mortgages.  The difference in jumbo interest rates from the conventional loan size is about .625% to .750%.  Keep an eye on this one because mortgage seekers for these jumbo mortgages should be excited.

Well if you have been following the mortgage market the past few days; you would have thought you were on a roller coaster.  What an interest rate ride it has been too.  No one seems to have a hand on this insane US mortgage market. 

On Tuesday the 30 year fixed rate in Florida went from 5.625% with no discount points and no origination fees; to 5.25%.  Yet this morning, that same mortgage interest rate climbed back up to 5.75% and may go even higher tomorrow.  The Federal Reserve will announce their opinion as to the condition of our economy and may even lower the Fed Funds rate again.  Speculating on what they will say regarding the near future US economy is useless.  We are going to have to wait and see. 

Florida interest rates are still relatively low.  But it’s not the rate that bothers me most.  It’s the availability of actually qualifying a first time buyeror Florida homeowner with today’s stringent mortgage underwriting guidelines.  For now, we’ll hang in there and keep you posted.

The NAMB, National Association of Mortgage Brokers, has asked all of it’s members to forward this vital information regarding Florida homeowners.  There is help for Florida homeowners having trouble making their mortgage payments at HOPE NOW.  Please contact our office at BeechTree Mortgage or a credit counselor at 1-888-995-HOPE.  A non-profit, HUD-approved credit counselor is waiting for their call.  For more information, visit www.hopenow.com . 

Other helpful information includes NeighborWorks

There is good news and bad news when it comes to Florida mortgages for new home purchases or existing home refinances.  The good news is of course interest rates are nearing all time lows.  30 year fixed rates for conventional Florida mortgages are available with no discount points or origination fees at 5.25%.

We are receiving several calls and emails from previous clients asking to reduce their 20 year fixed rate mortgage to 15 year mortgages.  The truth about refinancing is to consider lowering the term of the loan.  You will save tens of thousands of dollars even after deducting the closing costs.

The bad news however is that although rate are extremely low; many Florida homeowners or would-be home owners cannot qualify for these conventional mortgages.  Fannie Mae and Freddie mac have greatly trimmed the credit that was available to many in the past.  We know they are fending off future foreclosures and defaults but at some point they are going to have to soften a bit.  I hope its sooner than later.

We have been handling a higher volume of Florida mortgage related phone calls and emails lately.  As expected the surprise drop in interest rates made yesterday when the Federal Reserve lowered the Fed Funds rate and the Discount Rate by thee quarters each; has improved Florida consumer interest rates.

Of course the credit card, home equity line and auto loan rates improved but I am referring to the Florida mortgage market rates.  Whether you are seeking a 30 year fixed, 20 year fixed or 15 year fixed rate mortgage; rates have dropped like a rock overnight.  In fact part of the drop is due to the market expectations the Feds will lower again at the next FOMC announcement set for January 30th.

If you are anxious and are considering refinancing; call your Mortgage Professional now and take advantage of these great interest rates.  Make sure you receive upfront Good Faith Estimates and always compare closing costs as well of course the interest rate.   Remember too that rates are low today because of the expectations for next week.  If the Feds mention anything adverse to the markets expectations of the economy; rates mat again tighten and go up a bit.

In an unscheduled meeting this morning of January 22nd; the Federal Reserve dramatically reduced two key interest rates by more than the expected .50%.  Ben Bernanke and company reduced the Federal Funds rate by .75% to a new rate of 3.50%.  This rate cut should reduce the interest rate consumers, including Florida residents, pay on home equity lines of credit, car loans, and of course credit cards.

The Federal Reserve even lowered the Discount Rate or the rate that banks pay when borrowing funds from the central bank.  This new rate is now at 4.00%; down by the same .75%.

This unannounced huge drop in interest rates should hopefully restore confidence in the already depleted US economy.  Lets see how this translates into lower Florida mortgage interest rates later today. 

With the Florida mortgage market of 2007 behind us we can only focus on the hopeful positive outlook for 2008. Foreclosures are expected to continue to put a cramp on perception; don’t give up. Florida homeowners are going to look towards their mortgage professional for guidance. And when first time home buyers or Florida homeowners are calling; remember to not lose your enthusiasm.

Thomas Edison once said ” Success is 90% attitude and 10% knowledge”. I believe knowledge is extremely important especially in this mortgage arena. Fannie Mae and Freddie Mac are changing their underwriting guidelines almost every week. Only true mortgage professionals ensure they are on top of product knowledge and actually share that knowledge with everyone seeking mortgage loan financing in Florida.

However, attitude contributes when discussing these mortgage options. The economy isn’t cruising along as we would like, fears of recession, etc, so of course many people are down. So speak up and share what you know to those who need it and be positive. Attitude is everything.

Sharing current mortgage product information with Florida homeowners or first time buyers; ensures that our industry will survive and thrive. The Florida mortgage market will prosper in 2008 and it’s because their are mortgage professionals who choose doing it right, and taking care of our clients. Check you attitude; are you up?