My New Blog

Why would you select an FHA home loan?

There are many excellent reasons to choose an FHA Orlando home loan over other home loan choices, especially if one or more of the following factors apply to you:

• If you want to keep your monthly payments as low as possible
• If you don't have a lot of money to put down on a house

• If you're a first-time homebuyer

• If you're worried about your monthly payments going up
• If you're worried about qualifying for a loan
• If you're worried about what will happen if you fall behind on your payments
• If you don't have perfect credit

If any of these things depict you, then an FHA loan may be right for you.

Other FHA loan rewards Include:

Minimum Down Payment and Closing Costs:

Guide to Orlando Mortgages

Perhaps you are buying your first home in Orlando, or may be you're relocating to Florida from another state. Or, you may be a long-time Orlando resident who is looking to either refinance your current mortgage or take out a home equity loan for home improvements. What ever your situation is, it's a must that you educate yourself on Orlando home loans before shopping for an Orlando home and/or Orlando mortgage. This article explains what you will need to know before seeking a home loan in Florida:

The median price of a home in Orlando is $180000. Recently, Orlando homes have started appreciating at rates above the national average. As a result, income levels in many parts of Florida are too low to purchase a median-priced home with a conventional loan. Although average interest rates in Florida are below the national average, Florida has one of the lowest levels of home affordability in the nation.

In Florida, before a buyer submits an offer on a home, their real estate agent is required to present them with a completed Real Estate Transfer Disclosure Statement. This document, completed by the seller of the property, requires the seller to name all of the property that will be included in the purchase (refrigerator, stove, alarm system, etc.) and rate certain aspects of the conditions of both the included property and of the house itself. This document requires the seller to disclose any potential problems or hazards that may discourage the buyer from putting an offer in on the home.

Florida's Civil Code Provision of the Real Estate Act regulates the issuance of variable interest rates for the purchase of real estate. Therefore, borrowers who are issued large mortgage amounts are guaranteed a fixed rate mortgage. Florida law also prohibits the charging of interest more than one day prior to the recording of the mortgage even if the borrower received the loan prior to that time.

In July of 2002, Florida law enacted a set of anti-predatory lending laws in order to help protect Florida homebuyers from predatory lenders. Some of the provisions of this new set of laws include the prohibition of a lender charging points and fees in excess of 6% of the total principal financed amount, the prohibition of a mortgage company issuing a loan to a borrower in an amount that the borrower could not reasonably afford to repay, and the prohibition of the financing of single-premium credit insurance, among others.

If you're buying a home in the state of Florida, you qualify for both federal and state FHA, USDA, and VA loans. First-time home buyers qualify for Florida FHA loans with below-market interest rates, and, depending on their eligibility, may also qualify for a loan in order to cover down payment and/or closing costs. Teachers and other professionals who work in an educational capacity may qualify for Florida's Extra Credit Teacher Home Purchase Program, a down payment assistance loan with forgivable interest.

In addition to FHA loans, the state of Florida also offers comparable programs to persons with disabilities or persons who live with and care for persons with disabilities. The state also offers several unconventional loans designed to aid homebuyers with the costs of their monthly mortgage payment. For example, Florida's Interest Only PLUS loan provides qualified homebuyers with a 100% financing 35-year loan that only requires payments toward the accrued interest on the mortgage for the first five years of the loan -- borrowers do not have to pay toward the principal amount borrowed until after the first five years. The individual requirements of each of these loans vary depending on the county in which you are buying a house. Specific requirements can be obtained through the Florida Housing Finance

1/14/09 - The standard interest rate on a 30-year, fixed-rate Orlando mortgage (FRM) came in at 5.06 percent, the week ending Jan. 14, with an average 0.7 point, down a few ticks from 5.09 percent last week, according to Freddie Mac's weekly Primary Mortgage Market Survey (PMMS).

Last year, at this time, the 30-year FRM average was 4.96 percent.

The 15-year FRM this week was also down, averaging 4.45 percent with 0.6 point, down from 4.50 percent last week. A year ago the 15-year FRM averaged 5.25 percent.

The lower rates continued to fuel Orlando home refinance activity. For the past several months, 75 percent of conventional mortgage applications were for refinance transactions, according the Mortgage Bankers Association.

"Refinance applications continue to rule the day as rates dipped … and consumers jumped on them," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

"Interest rates will not remain at historic lows forever, so new Orlando home borrowers better grab them and take advantage while they can," she added.

Meanwhile, ARMs were mixed.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.32 percent the week ending Jan. 14, with an average 0.6 point, down from last week's 4.44 percent average.

The 1-year Treasury-indexed ARM came in at an average 4.39 percent this week with an average 0.5 point, up from last week's 4.31 percent average, according to Freddie Mac.

A year ago the 5-year ARM averaged 5.25 percent. The 1-year ARM averaged 4.89 percent this time last year.

1. Select a Real Estate Agent and Orlando Mortgage Professional You Can Trust

Sadly, there's no negotiating on this point. Start the new Orlando home buying process on the right foot, and find an agent you can trust. Credentials, community awards, and experience are important but definitely not the only factors to consider. Find somebody who offers the best of both worlds-- a professional whose conclusion you can count on and who you feel at ease discussing fairly personal requirements. The home buying process is still very much a people business, and having the right professional on your side will help ease future negotiations.

2. Face Your First Negotiation Barrier - The Commission

Now that you've found the ideal negotiation professional, it's time to turn the table and discuss commissions. A common question asked during the home buying process is, "who really pays the commission?" In short, the buyer always pays. How so? Because commissions are typically a percentage of sale prices, the seller essentially includes these commissions into the final sale. If there were no commissions to be paid, the seller would have likely lowered the sale price. In fact, "For Sale By Owner" buyers generally expect the seller to lower the price, knowing that a commission isn't part of the equation.

3. Commission Negotiations Part 2: The Costs of a Home Loan

Additionally, don't forget about the commissions being paid for the loan origination. Ask your agent how much you are being charged. Will this be financed out of your pocket, or will you be given an interest rate above wholesale to cover a yield spread premium (YSP)? In most cases, asking the agent for a disclosure should help clear the air on how much you are really paying. Good Faith Estimates (GFEs) and Truth-in-Lending (TIL) disclosures can help make comparison shopping easier.

4. Scrutinize and Question the Good Faith Estimate and Truth-in-Lending Forms

A mortgage lender is required to provide their Good Faith Estimate (GFE) within 3 days of receiving your application. Although the GFE is just an estimate, you'll want it to be as accurate as possible to avoid any surprises at closing. With this GFE in hand, you'll find a list of estimated fees for the transaction-- lender charges, third party fees, and cash needed at closing. The TIL shows your interest rate and APR (annual percentage rate), which makes it easier to compare loans. The TIL also indicates if there is a prepayment penalty associated with the loan. Your lender will only be able to give you a reasonably accurate estimate if you disclose your credit (good, bad, or ugly), how much you have to put down, and the type of property you are buying.

5. Flexible Closing Costs and Third Party Fees

Whether you have excellent or bad credit, third party fees could be a substantial chunk of your closing costs (especially if you are buying in a HUD-designated "high-cost closing state"). Title and escrow fees vary from state to state, but they are still negotiable to a certain extent. The buyer usually does have the right to choose the title company in the transaction, although many don't bother. Additionally, other fees such as appraisal and inspection fees may not be set in stone--although they will have less margins to negotiate. In the end, compare your final third party and closing costs fees with the original GFE. While they may slightly differ, they should not be significantly different.

6. Think about an FHA Home Loan

If you have trouble finding financing for the purchase of your home, or the risk-based surcharges on a conventional loan are higher than you like, ask your loan agent if you can qualify for an FHA home loan. Due to recent increases in conforming loan limits, FHA loans have become a great alternative for borrowers with credit issues buying modestly-priced homes. Buyers with previous bankruptcies or foreclosures will also find it easier to obtain a mortgage so long as they've had a clean history for about three years. FHA home loan interest rates are quite competitive and their fees are quite minimal. Although FHA financing is available to almost everyone, it is typically used most often by first-time home buyer and moderate income borrowers.

7. Lure the Seller: Come Financed and Ready to Buy

Before you start thinking about negotiating the listed price, do your part to come prepared. Instead of just getting pre-qualified, get pre-approved by a mortgage lender. Have your agent help you to get pre-approved for a home loan based on your credit, income, and loan to value ratio. Buyers with a pre-approval letter will move to the front of the line in negotiations and be in stronger positions. Sellers see an approval letter as a commitment to buy, and will be more open to possible dealing.

8. Negotiate the cost of the Home with the Right Information

Here's where having the right professional by your side will pay off greatly. Ask your agent to do his or her homework and find out why the seller is selling. Is the owner in the middle of a job transfer or maybe even a divorce? How long has the home been listed, how many times, how's the neighborhood doing? Did they already buy a home? All this information will help tune you into the sellers' state of mind, and find out how willing they are to budge during negotiations.

9. Don't Just Center on the Sale, Negotiate Your Way to Other Benefits

Although the sale price will likely be the focus of negotiations, don't look past other benefits such as seller concessions towards improvements, repairs, and closings costs. Buying a home is much more than signing for a mortgage and coming up with a down payment--with a few seller incentives, you can easily offset the costs of major repairs and upgrades. Additionally, other common seller incentives can include mortgage buy downs to help lower your monthly payments for the first few years.

10. Stop thinking about Lowball Offers. Present Strong Offers, but Leave Room for Negotiation.

Obviously, you want to get the best deal. Unfortunately, so does the seller. Lowball offers create mistrust from the very beginning and do little towards serious negotiations. A strong offer is a serious one with a considerable earnest money deposit and room for further negotiations. Don't complicate your initial offer with a list full of contingencies either. During negotiations, if the seller persists on a higher price, ask for something in return; maybe they can take care of the bathroom repairs, or throw in a few kitchen appliances and household furniture items?

Most importantly, always keep in mind that counter offers are still on the table for negotiation. Even if it's a stingy full price counter offer, don't hesitate to respond with another offer--after all, you have nothing to lose.

11. Extra Negotiation Tip: Don't Burn Your Bridges

Remember, this industry is still a people business. Don't bad mouth the seller, the seller's agent, and especially your own agent. This does little to help negotiations, and only creates mistrust between parties. Bottom line; don't let your emotions ruin a negotiating opportunity.

You should do this

Are you about to get an Orlando mortgage? Take a long breath. Get ready to spend a little bit of time doing your homework. Three or four hours of research may end up saving you thousands of dollars now, and tens of thousands of dollars over time. Orlando home financing can be intimidating, but it’s not rocket science. A few simple considerations can make a world of difference.

Getting started

Educate yourself. Get several quotes. Orlando mortgage brokers will generally offer a better deal than a bank, but it doesn’t hurt to call a bank or two for comparison as well. A good mortgage broker will spend as much time with you on the phone as you need. And a truly professional mortgage broker will ask enough questions to understand your goals. If you don’t feel good about a conversation, trust your instinct; cross them off your list and move on.

Everything needs to be in writing

Be sure to ask for Good Faith Estimates. There can be quite a few costs associated with getting a mortgage. You want to see every one. Comparing Good Faith Estimates can be challenging because different mortgage lenders often use different terminology. Don’t let that stop you. It’s also a good idea to ask the mortgage broker if there are any additional costs that are not shown on the estimate.

Disreguard the APR

APR, or Annual Percentage Rate, was originally designed to allow borrowers compare mortgages. I won’t go into the mathematics involved, but in principle APR was a good idea. In real world use it has turned out to be useless. Lenders do not all use the same inclusion methods in calculating APR. To add to the confusion, adjustable rate mortgage calculations are notoriously misleading. But that’s okay! APR involves two variables, note rate, and closing costs, and all you need to see is on the Good Faith Estimate.

Rate versus Points

It’s my experience that when people are shopping for a new Orlando home mortgage they often fixate on the interest rate, and overlook the points. Interest rate and points are inversely related. Unless you specify that you don’t want to pay points a lender is likely to price your loan with one or two points. This will make your rate lower, but it may not be a better deal. If the lower rate saves you fifty dollars a month on your payment but you pay an extra five thousand dollars in points, it will take you eight years to catch up with the cost of the points. Do the math.

The margin trap

Many adjustable rate mortgage programs now offer a variety of margins for you to choose from. This means that you may have an opportunity to control your future interest rate. Sooner or later all adjustable rate mortgages adjust to an interest rate that is equal to an index plus the value of your margin. You have no control over the movement of the index. But if you can get a lower margin you will have a lower rate (once your loan starts adjusting) for as long as you have your loan. Your good faith estimates should all state the margin for your loan. Phone the individual mortgage brokers and tell them you are interested in a lower margin. Don’t be shy. It’s your money!

The Good and bad about Pre-payment penalties

A lot people are averse to considering a loan with a prepayment penalty. But it is worth looking into. Adding a prepayment penalty to your loan may reduce your interest rate significantly. Prepayment penalties typically expire after three years, but recently many lenders have started offering a choice of one, two, or three year penalties. Will you still be in the home past the expiration of the prepayment penalty? If you outlast the penalty you have reduced your monthly payment for as long as you have the loan. That can add up. And it didn’t cost a penny!

Choose wisely

There are an amazing number of mortgage programs to choose from these days. You can select a fixed or an adjustable rate mortgage. Or you might choose one of many hybrid fixed period adjustable programs designed to give the comfort of a fixed for a predetermined number of years before starting to adjust. Interest only options are available now on both fixed and adjustable rate programs. When selecting your mortgage program think about yourself. Any decision only makes sense if it makes sense in the context of your life.

As a new Orlando home owner, refinancing your mortgage means paying off your current Orlando mortgage and getting a totally new mortgage loan with better terms.

So, what does "Better Terms" mean?

· A Lower monthly Orlando mortgage payment

· Cash out to improve your Orlando home, cover expenses, pay off debt, etc.

· A fixed rate loan to eliminate doubt with adjustable rate mortgages (ARMs)

· Numerous other benefits depending on your personal situation and goals

Mortgage refinancing can give you the flexibility to change the terms of your current loan with a new loan to meet your needs.

With Less Than Perfect Credit Refinancing Is Still Available

Even though poor or bad credit can make the mortgage refinancing process tricky, it is still very possible. In fact, refinancing your existing mortgage could even give you the help you need to get back on your financial feet.

In the face of tightening loan qualifications, there are still mortgage lenders that will approve and finance homeowners with less than perfect credit. Everyone's situation will be different, and lenders' qualifications do vary time, so be sure to request quotes from competing refinance lenders to make sure you are getting the best refinance deal available to you.

Get The Tools You Need to Start Your Refinance Today
If you decide to take advantage of the benefits of refinancing your mortgage, we hope to help you navigate the path whether you've have perfect credit or have had some bumps along the way. We have helpful articles which cover important information such as prepayment penalties, refinancing with bad credit, closing costs, cashing out your home's equity, and various loan fees.

Shopping for an Orlando mortgage to buy a new Orlando home may cause you some distractions on the way to the home you want to buy, so you must be willing to learn some basic steps to walk through the right way. A mortgage broker is a must because you need to understand what the process is all about first to determine how much you will be able to pay for a certain type of mortgage. If you learn too late that you cannot make timely payments for your Orlando mortgage, you will loose the great opportunity of buying a new Orlando home.
Before shopping for a mortgage, you must study your finances carefully so you can determine which mortgage is better for you to purchase a home. You can qualify for a loan and your lender might offer you more than what you really can afford. You have the final decision in stocking your personal income with expenses included and that you will feel secure to handle both every month. If you get that completely understood, you can start shopping for a mortgage. During the process you will find direct lenders and mortgage brokers. The first ones usually have the money to lend and they finally decide on your mortgage application. Mortgage brokers are just mediators who have a list of lenders to choose from. Then, it will come the easiest part to sort out: the application process. The application process consists on providing all necessary documents to prove claims you make on the application. You will be asked to prove a steady job as well as income, assets such as a car, other properties if any, bank accounts statements and liabilities, credit cards, household expenses and other mortgages.

If the lender considers you credit worthy, it will hire a professional appraiser to determine the value of the home you are going to buy is appropriate for your loan amount.

Orlando Florida Property Taxes Add Up

We are a Florida mortgage company. Our Orlando mortgage customers regularly ask us what they should expect from their future tax bill and how the homestead exemption works. As property values in Orlando have moved upwards in the last decade property taxes have become more important than ever to understand.

Recent Florida Taxes

Florida is a great place to live. Whether you are moving here for the first time or relocating within the state property taxes should be understood. After you purchase your new home it will be reassessed for tax purposes. You should consider checking with the local City Hall for an estimate of your future tax bill.

What to Expect

If you go to Tax Collector’s office to get an estimate of your future property taxes you will likely be told to expect an annual tax bill between 1.5% and 2.0% of your purchase price. Florida counties are allowed to tax property for as much as 3% of the value. Ask questions. Know what to expect.

Florida Homestead Exemption Guidelines

The Florida property tax homestead exemption reduces the taxable value of your homesteaded property by $25,000 for property tax calculations. These days the Florida homestead exemption is less likely to have a significant impact on your tax bill as property values have surged over the recent decade. If you pay $500,000 for your home and get a $25,000 homestead exemption your savings do not add up to a significant percentage of your potential tax bill. But that does not mean that you should not bother filing for your homestead exemption!

Florida Tax Increase Caps

More importantly, the Florida homestead exemption limits the rate at which your property taxes can be increased. The millage rates can be changed - which would represent an across the board adjustment effecting everyone. But once your home is homesteaded the amount that your assessed value can be increased by is fixed.

This rule was enacted in the “Save Our Homes” Amendment to the Florida Constitution and went into effect in 1995. The amendment limits the increase of the assessed value of a home with a homestead exemption to the lesser of 3% or the rate of inflation. So file for your homestead exemption.

Primary Residence Only

The Florida Homestead exemption is only for your primary home. This exemption does not apply to rental properties, or vacation homes. At this time the homestead is not transportable. This means that you do not get to carry your current assessed value with you to your next home. When you buy a new home you "restart the clock" and will have to pay taxes on the full value of our new home.

When to file

Generally, initial application for property tax exemption must be made between January 1 and March 1 of the year for which the exemption is sought. Initial application should be made in person at the Property Appraiser's office. Please check with your local City Hall for specifics.

Whats Coming

There is an open dialog in process that may change the substance of the homestead exemption rules in the coming years. This dialog has been triggered by the surge in Florida real estate values in recent years which has simultaneously reduced the liquidity of real estate by creating barriers to home purchases, and making it difficult for many people to move from their current home into a new home with potentially higher and unaffordable taxes.