BUY / SELL
Looking to buy a new home, condo, or townhome in the Orlando and surrounding area? We have property in Kissimmee, South Orlando, Saint Cloud, Narcoossee, Lake Nona, Harmony, Poinciana, Clermont, Reunion, Celebration, Davenport and more.
Buying Your First Home
How long you plan to live in the home?
If you purchase a home and get a job transfer or decide to move after only a short time, you may end up paying money in order to sell it. The value of your home may not have appreciated enough to cover the costs that you paid to buy the home and the costs that it would take you to sell your home.
The length of time that it will take to cover those costs depends on various economic factors in the area of the home. Most parts of the country have an average of 5% appreciation per year. In this case, you should plan to stay in your home at least 3-4 years to cover buying and selling costs. If the area you buy your home in experiences an economic up turn, the length of the time to cover these costs could be shortened, and the opposite is also true.
How long the home will meet your needs?
What features do you require in a home to satisfy your lifestyle now? Five years from now? Depending on how long you plan to stay in your home, you’ll need to ensure that the home has the amenities that you’ll need. For example, a two-bedroom dwelling may be perfect for a young couple with no children. However, if they start a family, they could quickly outgrow the space. Therefore, they should consider a home with room to grow. Could the basement be turned into a den and extra bedrooms? Could the attic be turned into a master suite? Having an idea of what you’ll need will help you find a home that will satisfy you for years to come.
Your financial health – your credit and home affordability
Is now the right time financially for you to buy a home? Would you rate your financial picture as healthy? Is your credit good? While you can always find a lender to lend you money, solid lenders are more skeptical if your credit history is not good. Generally, a couple of blemishes on a credit report will make you a good credit risk and could qualify you for the lowest interest rates. If you have more than a couple of blemishes on your report, lenders like Quicken Loans may still provide you with a loan, but you may just have to pay a higher interest rate and fees.
Some say that you should refrain from borrowing as much as you qualify for because it is wiser not to stretch your financial boundaries. The other school of thought says you should stretch to buy as much home as you can afford, because with regular pay raises and increased earning potential, the big payment today will seem like less of a payment tomorrow. This is a decision only you can make. Are you in a position where you expect to make more money soon? Would you rather be conservative and fairly certain that you can make your payment without stretching financially? Make sure that whatever you do, it’s within your comfort zone.
To determine how much home you can afford, talk to a lender or go online and use a home affordability calculator. Good calculators will give you a range of what you may qualify for. Then call a lender. While some may say that the 28/363 rule applies, in today’s home mortgage market, lenders are making loans customized to a particular person’s situation. The 28/363 rule means that your monthly housing costs can’t exceed 28 percent of your income and your total debt load can’t exceed 36 percent of your total monthly income. Depending on your assets, credit history, job potential and other factors, lenders can push the ratios up to 40-60% or higher. While we’re not advocating you purchase a home utilizing the higher ratios, its important for you to know your options.
Where the money for the transaction will come from?
Typically home buyers will need some money for a down payment and closing costs. However, with today’s broad range of loan options, having a lot of money saved for a down payment is not always necessary – if you can prove that you are a good financial risk to a lender. If your credit isn’t stellar but you have managed to save 10-20% for a down payment, you will still appear to be a very good financial risk to a lender.
The ongoing costs of home ownership?
Maintenance, improvements, taxes and insurance are all costs that are added to a monthly house payment. If you buy a condominium, townhouse or in certain communities, a monthly homeowner’s association fee might be required. If these additional costs are a concern, you can make choices to lower or avoid these fees. Be sure to make your realtor and your lender aware of your desire to limit these costs.
If you are still unsure if you should buy a home after making these considerations, you may want to consult with an accountant or financial planner to help you assess how a home purchase fits into your overall financial goals.
If you purchase a home and get a job transfer or decide to move after only a short time, you may end up paying money in order to sell it. The value of your home may not have appreciated enough to cover the costs that you paid to buy the home and the costs that it would take you to sell your home.
The length of time that it will take to cover those costs depends on various economic factors in the area of the home. Most parts of the country have an average of 5% appreciation per year. In this case, you should plan to stay in your home at least 3-4 years to cover buying and selling costs. If the area you buy your home in experiences an economic up turn, the length of the time to cover these costs could be shortened, and the opposite is also true.
How long the home will meet your needs?
What features do you require in a home to satisfy your lifestyle now? Five years from now? Depending on how long you plan to stay in your home, you’ll need to ensure that the home has the amenities that you’ll need. For example, a two-bedroom dwelling may be perfect for a young couple with no children. However, if they start a family, they could quickly outgrow the space. Therefore, they should consider a home with room to grow. Could the basement be turned into a den and extra bedrooms? Could the attic be turned into a master suite? Having an idea of what you’ll need will help you find a home that will satisfy you for years to come.
Your financial health – your credit and home affordability
Is now the right time financially for you to buy a home? Would you rate your financial picture as healthy? Is your credit good? While you can always find a lender to lend you money, solid lenders are more skeptical if your credit history is not good. Generally, a couple of blemishes on a credit report will make you a good credit risk and could qualify you for the lowest interest rates. If you have more than a couple of blemishes on your report, lenders like Quicken Loans may still provide you with a loan, but you may just have to pay a higher interest rate and fees.
Some say that you should refrain from borrowing as much as you qualify for because it is wiser not to stretch your financial boundaries. The other school of thought says you should stretch to buy as much home as you can afford, because with regular pay raises and increased earning potential, the big payment today will seem like less of a payment tomorrow. This is a decision only you can make. Are you in a position where you expect to make more money soon? Would you rather be conservative and fairly certain that you can make your payment without stretching financially? Make sure that whatever you do, it’s within your comfort zone.
To determine how much home you can afford, talk to a lender or go online and use a home affordability calculator. Good calculators will give you a range of what you may qualify for. Then call a lender. While some may say that the 28/363 rule applies, in today’s home mortgage market, lenders are making loans customized to a particular person’s situation. The 28/363 rule means that your monthly housing costs can’t exceed 28 percent of your income and your total debt load can’t exceed 36 percent of your total monthly income. Depending on your assets, credit history, job potential and other factors, lenders can push the ratios up to 40-60% or higher. While we’re not advocating you purchase a home utilizing the higher ratios, its important for you to know your options.
Where the money for the transaction will come from?
Typically home buyers will need some money for a down payment and closing costs. However, with today’s broad range of loan options, having a lot of money saved for a down payment is not always necessary – if you can prove that you are a good financial risk to a lender. If your credit isn’t stellar but you have managed to save 10-20% for a down payment, you will still appear to be a very good financial risk to a lender.
The ongoing costs of home ownership?
Maintenance, improvements, taxes and insurance are all costs that are added to a monthly house payment. If you buy a condominium, townhouse or in certain communities, a monthly homeowner’s association fee might be required. If these additional costs are a concern, you can make choices to lower or avoid these fees. Be sure to make your realtor and your lender aware of your desire to limit these costs.
If you are still unsure if you should buy a home after making these considerations, you may want to consult with an accountant or financial planner to help you assess how a home purchase fits into your overall financial goals.
10 Must Know Mortgage Terms
Shopping for a new home is fun and exciting. Yet securing financing to buy real estate can be stressful. The more you know about the home mortgage business, however, the smoother your transaction will be. To help you get a handle on financing terminology before you buy a home, we have defined 10 commonly used mortgage terms.
Adjustable Rate Mortgage (ARM Loan)
An ARM Loan has an initial interest rate that is often lower than a conventional fixed-rate mortgage. This initial rate is usually locked in for one or more years. Once the initial term is over, the interest rate on an ARM loan may go up within specified limits over predetermined intervals during the course of the loan. The lower initial interest rate associated with an ARM loan translates to a lower initial monthly payment. The tradeoff, however, is the potential for a higher payment if interest rates go up as the ARM loan progresses.
Annual Percentage Rate (APR)
The APR for your home loan is an annual calculation that includes the interest rate quoted by your mortgage company plus additional home loan costs such as origination fees and points. The important thing to keep in mind about your loan’s APR is that it will be higher than advertised interest rates because of these additional factors.
Closing Costs
With each real estate transaction, there are many expenses to pay and agencies to compensate. These fees, which are often shared by the buyer and the seller, are referred to as the closing costs. When you buy a home, the closing costs might include loan origination fees, escrow payments, title insurance, attorney fees and even discount points paid to lower your loan’s interest rate.
Escrow: During the home loan process, a neutral third party known as Escrow holds documents and money (including earnest money deposits) for safekeeping until the real estate transaction is complete. An Escrow account is also used once you complete your home loan to hold the property tax and insurance monies that are collected with each mortgage payment.
Fixed-Rate Mortgage
A conventional fixed-rate mortgage means that your interest rate will be the same for the entire life of the home loan. Financing for this type of loan is typically spread out over 10, 15, 20, or 30 years, depending on the needs and payment capability of the buyer. A fixed-rate mortgage provides buyers with the security of knowing exactly what their monthly house payment will be during the entire loan term.
Loan to Value Ratio (LVR)
When you buy a home, this term refers to the amount of financing you are getting in relationship to your new home’s value. For example, an $80,000 mortgage on a $100,000 home has an LVR of 80 percent. This is important because an LVR of more than 80 percent will require you to purchase private mortgage insurance (PMI). Using the same example to illustrate this point, if you finance $90,000 of your $100,000 home, your LVR will be 90 percent, initiating the need for PMI.
Lock-In
Home mortgage interest rates vary from day to day. While you buy a home and secure financing, you may decide to lock in a particular interest rate with your lender. This lock-in guarantees that your home loan will be processed with this rate, even if interest rates rise before your loan closes.
Points
There are two types of points that can be applied to a home mortgage. Discount points are used to reduce the loan’s interest rate and origination points may be added to cover the expenses associated with processing a loan. One point equals one percent of the loan amount. This means that, to lower your interest rate by one point on a $300,000 mortgage, you’ll need to pay an additional $3,000 at closing.
Private Mortgage Insurance (PMI): When you finance more than 80 percent of your new home’s value, your lender will require you to purchase PMI. This protects the lender against loss if you default on your home loan. Your monthly PMI payment is added to the cost of your mortgage payment. It is important to note that when you have accumulated 20 percent equity in your home, you will want to check into canceling your PMI to lower your monthly mortgage payment.
Title Insurance
A home mortgage requirement, title insurance protects both the buyer and the seller against legal defects in a home’s title. This policy ensures that a property owner has the legal right to transfer a home’s title to the seller. If a problem occurs, the title company pays the associated legal fees to correct the situation.
Knowledge is power, even when you buy a home and apply for a loan. By familiarizing yourself with these 10 must-know mortgage terms, and doing additional research as needed, you will be positioned to negotiate the best home loan that your money can buy!
Adjustable Rate Mortgage (ARM Loan)
An ARM Loan has an initial interest rate that is often lower than a conventional fixed-rate mortgage. This initial rate is usually locked in for one or more years. Once the initial term is over, the interest rate on an ARM loan may go up within specified limits over predetermined intervals during the course of the loan. The lower initial interest rate associated with an ARM loan translates to a lower initial monthly payment. The tradeoff, however, is the potential for a higher payment if interest rates go up as the ARM loan progresses.
Annual Percentage Rate (APR)
The APR for your home loan is an annual calculation that includes the interest rate quoted by your mortgage company plus additional home loan costs such as origination fees and points. The important thing to keep in mind about your loan’s APR is that it will be higher than advertised interest rates because of these additional factors.
Closing Costs
With each real estate transaction, there are many expenses to pay and agencies to compensate. These fees, which are often shared by the buyer and the seller, are referred to as the closing costs. When you buy a home, the closing costs might include loan origination fees, escrow payments, title insurance, attorney fees and even discount points paid to lower your loan’s interest rate.
Escrow: During the home loan process, a neutral third party known as Escrow holds documents and money (including earnest money deposits) for safekeeping until the real estate transaction is complete. An Escrow account is also used once you complete your home loan to hold the property tax and insurance monies that are collected with each mortgage payment.
Fixed-Rate Mortgage
A conventional fixed-rate mortgage means that your interest rate will be the same for the entire life of the home loan. Financing for this type of loan is typically spread out over 10, 15, 20, or 30 years, depending on the needs and payment capability of the buyer. A fixed-rate mortgage provides buyers with the security of knowing exactly what their monthly house payment will be during the entire loan term.
Loan to Value Ratio (LVR)
When you buy a home, this term refers to the amount of financing you are getting in relationship to your new home’s value. For example, an $80,000 mortgage on a $100,000 home has an LVR of 80 percent. This is important because an LVR of more than 80 percent will require you to purchase private mortgage insurance (PMI). Using the same example to illustrate this point, if you finance $90,000 of your $100,000 home, your LVR will be 90 percent, initiating the need for PMI.
Lock-In
Home mortgage interest rates vary from day to day. While you buy a home and secure financing, you may decide to lock in a particular interest rate with your lender. This lock-in guarantees that your home loan will be processed with this rate, even if interest rates rise before your loan closes.
Points
There are two types of points that can be applied to a home mortgage. Discount points are used to reduce the loan’s interest rate and origination points may be added to cover the expenses associated with processing a loan. One point equals one percent of the loan amount. This means that, to lower your interest rate by one point on a $300,000 mortgage, you’ll need to pay an additional $3,000 at closing.
Private Mortgage Insurance (PMI): When you finance more than 80 percent of your new home’s value, your lender will require you to purchase PMI. This protects the lender against loss if you default on your home loan. Your monthly PMI payment is added to the cost of your mortgage payment. It is important to note that when you have accumulated 20 percent equity in your home, you will want to check into canceling your PMI to lower your monthly mortgage payment.
Title Insurance
A home mortgage requirement, title insurance protects both the buyer and the seller against legal defects in a home’s title. This policy ensures that a property owner has the legal right to transfer a home’s title to the seller. If a problem occurs, the title company pays the associated legal fees to correct the situation.
Knowledge is power, even when you buy a home and apply for a loan. By familiarizing yourself with these 10 must-know mortgage terms, and doing additional research as needed, you will be positioned to negotiate the best home loan that your money can buy!
What Exactly Is A Short Sale?
A Short Sale is a transaction where the net proceeds from the sale won’t cover your Total Mortgage obligation and closing costs, and you don’t have any other sources of money to cover the deficiency.
When a Short Sale is executed correctly, it is a Win-Win-Win Solution for the Distressed Homeowner, their Lender, and the New Buyer. The Lender will receive the highest Marketable Price while avoiding the higher costs associated with a Foreclosure, the Borrowers Avoid a Foreclosure from being entered onto their credit, and the New Homeowner gets to Purchase a property at Today’s Most Competitive prices. Generally, the borrower also receives relief from possible future legal actions and deficiency judgments.
Short Sales occur when a borrower sells their property for a sales price that is less than the amount that they owe to their lender(s). In order for this to take place, the lender(s) must accept a discounted payoff. This means that the bank gets paid less than the full loan amount owed. In a Short Sale, the homeowner usually receives complete or partial relief from all of their mortgage debt after the sale is finalized and avoids an financially crippling Foreclosure or Bankruptcy on their credit report.
The end result is that you Sell Your Home, Satisfy or Settle Your Mortgage, and Avoid a Foreclosure or a Bankruptcy.
When a Short Sale is executed correctly, it is a Win-Win-Win Solution for the Distressed Homeowner, their Lender, and the New Buyer. The Lender will receive the highest Marketable Price while avoiding the higher costs associated with a Foreclosure, the Borrowers Avoid a Foreclosure from being entered onto their credit, and the New Homeowner gets to Purchase a property at Today’s Most Competitive prices. Generally, the borrower also receives relief from possible future legal actions and deficiency judgments.
Short Sales occur when a borrower sells their property for a sales price that is less than the amount that they owe to their lender(s). In order for this to take place, the lender(s) must accept a discounted payoff. This means that the bank gets paid less than the full loan amount owed. In a Short Sale, the homeowner usually receives complete or partial relief from all of their mortgage debt after the sale is finalized and avoids an financially crippling Foreclosure or Bankruptcy on their credit report.
The end result is that you Sell Your Home, Satisfy or Settle Your Mortgage, and Avoid a Foreclosure or a Bankruptcy.