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Frequently Asked Questions About Florida Mortgage Loans
1. Should I get an adjustable rate mortgage (ARM) or a fixed rate mortgage?
They are both good options for different situations. For some situations a fixed rate loan may be your best bet, especially since the bond market has pushed their rates so low. For others, the opportunity to lower their payments with an interest only ARM might save them thousands of dollars. Everey situation is unique, and a qualified Mortgage Broker can help you decide which option is the best for you. One of the better programs available today is a fixed rate that adjusts 1,3,5, or 7 years in the future. You get a lower fixed rate today, and can refinance in the future if your adjusted rate is much higher. We usually recommend this type of loan for someone who isn't planning on being in their current home much longer than the time until the loan becomes adjustable.
2. What is a credit score, and how does it effect my chances of getting a loan to buy (or refinance) a home?
Your credit score is a number that is determined by a variety of factors, and reported by the three major credit agencies, Experian, Trans Union and Equifax. Your score from each agency is normally similar, but do to different items "reporting" to some agencies and not to others, the difference can be quite broad. Because there are three agencies you'll have three scores, a high, a low, and a "middle score". A middle score below 520 will make it difficult for you to obtain financing to buy a home or refinance your current mortgage, while a score above 720 means you can access a wide variety of different programs with excellent rates. At just above 520 you can expect tto pay 3% or more for your interest rate than someone whose score is above 720. For more information, check out our free report on Credit Secrets Revealed .
3. My credit is pretty bad (or I don't have any credit history), can I still get a Florida home loan?
Credit issues can effect anyone, and make it difficult or impossible to get a mortgage from a bank or credit union. Luckily, there are many wholesale lenders that will do a Florida mortgage for someone with less than perfect credit. We have access to many lenders that can help with your situation. Their rates are normally higher than banks or credit unions, but are well below some of the big on-line lenders and finance companies. If you are buying a home, it would be to your advantage to fix some of your credit issues and raise your score before you apply for a pre-approval. See our free report on How to Improve Your Credit Score to get started. If you want to refinance your current home, there are programs available, including "band-aid loans", that will let you refinance now, but allow you to get into a better program in 2-3 years, when you've had time to repair your credit. For more information, check out our page on Bad Credit Loans , or give us a call at 813.882.8878 to discuss your situation.
4. The interest rate on my ARM has increased drastically in the last 18 months, should I refinance to a fixed rate?
The general guideline is that if you can reduce your rate by at least 1%, or re-coup the expense of a refi in less than 2 years, then it pays to refinance. Right now, most homeowners with an ARM can save 1.25% to 1.5% by refinancing, and re-coup the cost of the refinance in less than 18 months. So for most people, it would be a good financial decision to refinance while fixed rates are still low. However traditionally, over the entire life span of a thirty year loan, ARM's generally beat fixed rate mortgages in total interest rate and cost. So if you plan to be in your home until the mortgage is paid off, and you can afford the higher payments when your rate goes up, sticking with your ARM may be the best bet. Your personal goals (savinng for retirement, paying off your mortgage early, moving in 5 years, etc.) might make refinancing to a series of 3/1 ARMS your best option. Talking with a Licensed Mortgage Broker whowill listen to and take into account your goals, and then will explain your options and help you make the right decision, is always a good idea.
5. How long will it take to get my new Florida mortgage?
You can count on it taking from 2-6 weeks from submitting your application to actually closing on your mortgage. Your participation is a big factor in getting your mortgage loan done quickly. Arranging to be available for the appraisor's visit and getting all required documentation back to your mortgage broker as quickly as possible can really speed up the process. If you're buying a new home, getting pre-qualified is one step you can take to make the whole process quicker and easier. We'll walk you through every step of getting your Florida mortgage, and make it all as quick and easy as possible. If you do your part, we can easily get your mortgage completed in 3-4 weeks.
6. My credit is pretty good, why shouldn't I just go to my bank to get my mortgage?
If you have excellent credit, no special circumstances, want a standard 30 year fixed rate mortgage, and don't mind paying a bit more in interest for your mortgage, than your bank or credit union is a good idea. A Licensed Mortgage Broker will charge you a fee for their services, and your bank won't. But a recent survey by an independent economist from Georgetown University found that you can save alot of money by using a mortgage broker for your mortgage, compared to a loan officier at your bank. Even when both of them are dealing with the same lender! The major reason for this is that a Mortgage Broker charges you an up-front fee to get you the best interest rate, while the bank charges you a higher interest rate to be able to pay the salary of their loan officiers, tellers, branch managers, etc. For more information, you can read a reprint of the article here, Mortgage Brokers Are Cheaper . If you'd like, you can also order our free report, Top Ten Reasons to Use a Licensed Mortgage Broker .
7. I'm buying a home for the first time, what should I do first, and what should I expect to happen?
Basically, the first thing you should do is get a pre-approval for a Florida mortgage. This not only saves you time and pressure when you find the home that you want to buy, it also makes your offer more attractive to potential sellers. They know you're serious about buying a new home, and they know you can obtain financing for the home they're selling. As for what you can expect when buying your first home, get our free step by step Guide to Buying Your First Home .
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