All posts in Conventional Loans

Is A No Closing Cost Mortgage The Way To Go?

by Justin Miller on May 16, 2012 in Conventional Loans, FHA Loans, Jumbo Mortgages, Mortgage Education 101 with No comments

 

 

 

 

 

 

 

The answer is that it depends on the individual buying and their goals.  With a refinance right now it can be a great option because if rates are to drop further you can refinance again.  If you plan on holding onto the mortgage for a long period of time then it might make more sense to pay the closing costs.  Keep in mind that nothing is free in life and the catch here it that the interest rate will be higher than if you pay the closing costs on your own.

This is where a Mortgage Professional comes into play and you need to make sure you are being given all of the options available so you as the borrower can determine what is best for you and never have any regrets.

Mortgage Insurance Choices

by Justin Miller on April 11, 2012 in Conventional Loans, Mortgage Education 101 with No comments

 

 

 

 

 

 

 

It is so important that when you are working with a Mortgage Professional that you are being given all the different loan options.  If you have been following my Blog for a long time now you would know that I am a fan of a big, long mortgage.   This is now more important than ever as FHA has increased their mortgage insurance premiums.

Did you know that there is borrower paid monthly premiums, borrower paid single premiums, lender paid mortgage insurance, etc?  Did you know that there are different mortgage insurance companies with different premiums?   Most people do not know this and actually most Mortgage Professionals don’t either.

How do you know which one is the best for you?  You can do that by contacting me to see your different options.

The Perfect Loan – What’s Needed To Close

by Justin Miller on April 10, 2012 in Conventional Loans, FHA Loans, Mortgage Education 101 with No comments

 

 

 

 

 

 

This is the best article I have ever read from Forbes and anyone looking to get a mortgage MUST read this.

“THE PERFECT LOAN FILE“  – here is one paragraph that can occur a lot throughout the loan process:

It all comes down to your proof. If the lender asks for a specific document, give them exactly what they are asking for, not what “should be OK,” – because it won’t be. This is where the approval process tends to go off the rails, when the lender asks for specific documentation and the borrower supplies something else. Here, too, is where both sides get frustrated. So if the
lender asks for a bank statement and there are 5 pages for that bank statement, send them all 5 pages, and not just the summary. If you send them the summary page and they ask again, don’t complain that the lender keeps asking for the same thing when you never sent it in the first place. This may sound elementary, but the vast majority of mortgage approval process woes stem from scenarios just like this.

 

Conventional, FHA, USDA…Oh MI!

by Justin Miller on February 16, 2012 in Conventional Loans, FHA Loans with No comments

Conventional, FHA, USDA…Oh MI!.

Loan Limits Set To Expire At The End of The Month

by Justin Miller on September 19, 2011 in Conventional Loans, FHA Loans, VA with No comments

For Broward, Palm Beach, and Miami-Dade Counties, this will only affect the loan amounts for FHA loans.  The maximum is going from $423,750 down to $345,000.  There are talks of an extension but that probably won’t happen until the last minute.  You must close by September 30th. 

The Conforming loan limits for the tri-county area are staying the same at $417,000 .  You can search your state and county on HUD’s website.

VA loan limits will be staying the same which is based on a calculation.  This is directly from VA:

The maximum guaranty for VA guaranteed loans closed October 1, 2011 through December 31, 2011 will remain unchanged. The Veterans’ Benefits Improvement Act of 2008 provided a temporary increase in VA loan limits for loans closed January 1, 2009 through December 31, 2011. Because of this legislation, VA loan limits will remain the same for the remainder of the calendar year. Please note that VA does not have a maximum loan amount. Loan limit refers to the maximum loan a lender could make and still receive a 25% guaranty from VA, assuming the veteran has full entitlement.

Fort Lauderdale Mortgage Closing Costs

by Justin Miller on July 31, 2011 in Conventional Loans, FHA Loans, Mortgage Education 101 with No comments

Your total costs and fees are going to depend on the Bank or Mortgage Company you use along with the title company closing your transaction but let’s go over what you should expect.  These fees will be what I think are reasonable fees.  These fees are for Fort Lauderdale & South Florida.

  • Lender Fees – $1200 – which consists mostly of Underwriting, Processing, Application, and Funding Fees.
  • Appraisal – $350 – this will depend on whether it’s Conventional, FHA, VA, Jumbo, etc.
  • Flood Cert – $15
  • Tax Service – $95
  • Settlement Fee – $550
  • Abstract or Title Search – $150
  • Owners Title Insurance – $5.75 per thousand for the 1st $100k and $5 per thousand for there after
  • Lender’s Title Policy – $25
  • Endorsements – 10% of the title insurance plus $50 typically
  • Wire Fee – $50
  • Document Storage Fee – $35
  • Recording Fees – $275
  • Intangible Tax – your loan amount x .002
  • Doc Stamps – your loan amount x .0035
  • Survey – $350

If you are buying a Fannie Mae or Freddie Mac owned property you will be charged the seller’s doc stamps which is the purchase price x .007.  If you are buying a short sale or foreclosure and you use the seller’s title company they typically will pay for the title insurance but you get what you pay for so I would recommend hiring an attorney to review everything.

In Palm Beach the seller chooses the title company and pays the title insurance.

Your prepaid items for per diem interest, insurance, and taxes are not costs of the loan but you better hope your mortgage professional is guiding on what they will be, not what they hope they will be or what makes their estimate look better.  Be careful!

Buying A Fort Lauderdale Investment Property

by Justin Miller on July 18, 2011 in Conventional Loans, Investment Properties with No comments

Now could be  a great time to buy an investment property especially with rents going up.  It is one way to secure in your financial future.

In order to purchase a residential (1-4 units) investment property in Florida you will have to put down at least 20% on a 1 unit property.  That could change but right now there aren’t any mortgage insurance companies insuring loans in the State of Florida and mortgage insurance is required on any loans with less than 20% down.

If you are able to put down 25% you are better off doing that because you will get a better interest rate.  Fannie Mae & Freddie Mac have what’s called a Loan Level Price Adjustment and theirs a higher cost associated with it when putting down 20%.   If you want to compare it to rates you see on 30 year fixed loans when it’s a primary residence with 20% down you could get the same rate with a 3% cost versus a 1.75% cost with 25% down.

If you are using rental income from the subject property then you will need 2 additional appraisal forms.  Fannie Mae Form 1007 which is to estimate the market rent and Fannie Mae Form 216 which estimates the operating expenses.  Each form adds about an additional $100 to the estimated cost of $300 for an appraisal of a 1 unit property with a value less than $600,000.

If you are using rental income from the subject property you will also need Rent Loss Insurance which is an insurance for loss in rental income due to property damage.  Make sure to consult an Property & Casualty Expert.

Contact me for more information on investment properties especially if there is more than 1 unit.

 

Closing Costs On Your Fort Lauderdale Mortgage

by Justin Miller on July 14, 2011 in Conventional Loans, FHA Loans, Jumbo Mortgages, Mortgage Education 101 with No comments

In order to determine if someone’s fees are high or low and to compare apples to apples you need to know what you are looking at.  I have certainly lost deals because someone thought my fees were too high or higher than another banks estimate but that in fact was not the case, my estimate was accurate and their’s was not.

My opinion is that you should not be choosing someone solely on their fees or rate.  There is much more to a loan and if that is your main focus and concern your loan could be a nightmare or not close.   No matter what product or service you are looking to pay for in life you can always find it cheaper but most times when you have savings you are giving something else up such as advice, expertise, honesty, quality, etc.

If you have a copy of the new “Good Faith Estimate” you would want to pay close attention to Box A at the bottom of page 1.   That is the total loan origination fees charged by the institution originating the loan.  The rest of the fees for the most part will depend on the title company being used, the number of days the mortgage professional is putting in for per diem interest, the estimated insurance, and the estimated taxes.

In Fort Lauderdale and South Florida I think it is best to estimate the property taxes at 2% of the purchase price although the tax rate will be dependent upon the seller’s current tax rate until the property gets reassessed based off of your purchase price along with a Homestead Exemption if it’s your primary residence.

Just be careful when it comes to shopping for a mortgage.  You will most likely confuse yourself.  I heard a saying once, “you shop for shoes, you shop for clothes, but when you shop for a mortgage you get stuck with the biggest liar.

Different Loan Choices For Your Fort Lauderdale Mortgage

by Justin Miller on July 12, 2011 in Conventional Loans, FHA Loans, Foreign Nationals, HomePath, Jumbo Mortgages with No comments

There seem to be a lot of different choices out there right now so you need to make sure you are dealing with a mortgage professional that will go over the best options for you.   I am a big fan of a big, long mortgage.  I would rather you put less money down making sure you have 12 months of reserves in the bank, are maxing out retirement, never having too much money tied up in any one asset, etc.  I prefer a 30 year fixed mortgage over a short time period because you can always make a 20 or 15 year payment but on a 15 or 20 year mortgage you can’t make a 30 year payment if money gets tight. 

I would be typing for days if I went into detail on the options below but I am going to list some of the options for now:

  • Conventional mortgage with less than 20% down with Borrower Paid Mortgage Insurance
  • Conventional mortgage with less than 20% down with Split Premium Mortgage Insurance
  • Conventional mortgage with less than 20% down with Lender Paid Mortgage Insurance
  • Conventional mortgage with more than 20% down
  • FHA 203(b) Mortgagte
  • FHA 203(k) Rehab Mortgage
  • VA Mortgage
  • Jumbo Mortgage
  • Fannie Mae’s HomePath Mortgage
  • Freddie Mac’s Homesteps Program (this is not a mortgage)
  • Fixed Rate Mortgage
  • Adjustable Rate Mortgage
  • Portfolio Mortgage
  • Foreign National Mortgage

I will try to write about each loan over the next few weeks.

26 Things That Will Affect Your Fort Lauderdale Mortgage

by Justin Miller on July 12, 2011 in Conventional Loans, FHA Loans, Interest Rates, Jumbo Mortgages with No comments

I can’t tell you how often I get a call or hear someone say that they are shopping and want to know what my interest rates are.   There is much more to a loan then just an interest rate but there is much more to an interest rate then just your credit score and down payment.  Let’s go through the 26 items:

  1. Loan Amount
  2. Loan to Value
  3. Combined Loan to Value
  4. Credit Score
  5. Credit History
  6. Escrow Preference
  7. Closing Date
  8. Loan Type
  9. Property Type
  10. Occupancy Type
  11. Residency
  12. Available Assets
  13. Asset Seasoning
  14. Co-borrowers
  15. Debt to income ratio
  16. Housing to income ratio
  17. Improvements Needed
  18. Employment Type
  19. Employment History
  20. Documentation Available
  21. Transactional DI
  22. Re-castable
  23. Relocation
  24. Seller Contributions
  25. Gifts
  26. Cash-out
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