Top Mistake When Searching 'Mortgage Rates Today'

#1 mistake when searching "Mortgage Rates Today"

The #1 mistake consumers make with the widely-searched term “mortgage rates today” is not knowing how to read the fine print and the multiple factors associated with determining accurate mortgage rates. The most deceptive advertised mortgage rates are either missing clear and conspicuous disclosures of the terms or have disclosures that require a very mortgage savvy person to understand.

For instance, some of the biggest online lenders advertise the lowest rate - but only based on very low loan-to-value and includes paying multiple discount points.  The fact is, most consumers don’t want to pay discount points. The cost associated with recuperating points with rates takes a long time to justify the benefits, and some people just don't have the money.  Another thing to consider is that mortgage rates today are subject to multiple criteria: Exact credit score, Loan amount, Loan-to-value, Purchase or refinance transaction, With and without cash out and Type of property.

Here are two categories of the type of companies that advertise mortgage rates to hook customers into completing an application (which eventually results in bait-and-switch tactics):

BIG Mortgage Lenders - The BIG online mortgage lenders with highly recognized names that sponsor the Superbowl and other major sporting events.  When it comes to lowest mortgage rates it’s not like a car dealership that gets better pricing based on volume. Pricing is purely based on overhead and cost of acquisition.  Often times, smaller mortgage brokers undercut these big lenders by a quarter to a half a percent when comparing same closing costs because they don’t have hundreds of employees or million-dollar advertising costs.

Lead generation websites with big brand names:  These websites are very deceptive and unregulated since they are not licensed mortgage companies and will do anything to get consumers to complete a form.  They will advertise 15 year mortgage rates or adjustable mortgage rates with the idea that consumers assume it's a 30 year fixed rate without any discount points. The truth in lending act clearly sets out guidelines mortgage lenders are supposed to follow when advertising rates to consumers.  However, these lead generation websites have zero understanding of the law and have only one goal in mind:  get consumers to complete an application so they can sell your information over and over which will result in you getting slammed with telemarketers.

Do yourself a favor and instead of searching “mortgage rates today”, search for the best local mortgage companies, mortgage lenders or mortgage brokers. Interview them and read their reviews.  Each local market has hundreds of mortgage companies and so there's no reason to try and get a mortgage from an out of state lender that's just a call center full of highly motivated sales people.  Just think about this: Would you invest money with a financial adviser over the phone, or would you rather deal with a local person that you can meet with face to face?

It's your financial future at stake, your social security number and your identity that you're sharing. Make sure you know where your information is going and who you're giving it to.

I’m Shahram Sondi (NMLS id: 186790), principal broker and president of Mortgage Expert, Inc., a Florida licensed mortgage broker. As a consumer advocate, I am constantly working to educate consumers on making good financial decisions. I have been serving the Central Florida market with experience and integrity since 2001. Tell me what you’re looking for, and we will personally present you with the lowest available mortgage rate today based on your desired mortgage type and term.

Are There Any Benefits To Using Mortgage Brokers?

Many people don’t know where to turn when they need a mortgage, whether for a home purchase or refinancing. The obvious choice is most likely to be your local bank, although this may not be the best choice. Mortgage lenders or banks can be limited in what types of mortgage products and programs they offer to clients. In fact, many loan officers at local banks are not even licensed. While it may be easier to deal with a bank that already has your business, the choices available may be limited and not provide you with the best mortgage out there. On top of this, some people may find that they don’t qualify at all when going through banks or mortgage lenders directly. That’s where mortgage brokers come in - but, are there any benefits to using mortgage brokers?

Using a reputable local mortgage broker has many benefits. First of all, a mortgage broker must be licensed and heavily regulated, therefore, must know what they are doing. They also must be knowledgeable of compliance laws. Mortgage brokers usually deal with multiple Wholesale mortgage lenders with each one offering their own products and mortgage rates. Because of this, there are more program offers and better mortgage rates. A mortgage broker who knows what each mortgage lender is offering will be able to qualify a borrower for the best mortgage.

Both home buyers and existing homeowners who are refinancing can use a mortgage broker for the transaction. This gives the borrower more options to choose from instead of having limitations. Especially when refinancing, using the original mortgage lender or bank most likely will not provide the best mortgage rate as the bank often prefers to keep you at a your existing higher rate.

How to Choose a Mortgage Broker?

Mortgage brokers can choose how they want to deal with their customers as long as it is within the law. When looking for a mortgage broker, find one who is not going to charge you upfront fees or an application fee, deposit or broker fees since these can be very expensive and make the whole mortgage unaffordable. A small owner operator mortgage broker that gets mortgage rates on a preferred wholesale basis will be the one that offers the lowest mortgage rates for a loan. In fact, many times these rates are lower than what a customer will get when working directly with the mortgage lender. For instance, as an approved broker with Rocket Mortgage, we are able to offer a significantly lower mortgage rate through our wholesale relationship with Rocket Mortgage than your going directly to them.

Mortgage brokers normally have several mortgage lenders and mortgage programs to choose from when working to get your mortgage approved. After taking your application and looking at your credit, income, debt-to-income and assets, they can determine what you qualify for and at what mortgage rate. Even if there are major credit issues that prevent an approval, mortgage brokers are usually knowledgeable enough to be able to guide a borrower so that a mortgage in the future is possible.

When choosing a Florida mortgage broker or a mortgage broker in any state, make sure to look for one that offers conventional loans, as well as, VA loans and FHA mortgages. Not all mortgage brokers may be approved to offer these types of loans. Also be certain that there are no extraordinary fees attached to the loan; less fees equals a cheaper mortgage rate. A good way to check the integrity and reputation of a mortgage broker is to check customer testimonies, the business website, their credentials and professional affiliations. Never let anyone talk you into a mortgage or convince you to sign anything that is out of your comfort zone. This is your money and your mortgage that you will be paying each month for many years.

FAQs: FHA Loan Florida Requirements for 2023

Below are the 2023 Florida FHA loan requirements. These FHA loan requirements change annually and we update them as they change.

 

Basic FHA Loan Requirements

What is the maximum FHA loan amount for 2023?

Maximum loan amount vary by county for traditional FHA loans. The current base FHA loan limit in most of Florida counties for a one-family home is set at $472,030. For county specific limits, view HUD FHA Mortgage Limits.

What is the minimum down payment for FHA loan?

The borrower's minimum required investment is 3.5% of the purchase price / adjusted value of the property. The source must be from borrower's own funds or as a gift from an acceptable donor.

What are FHA guidelines for Employment history and loan income requirements?

A two-year employment and income history is required for both employees and self-employed borrowers by way of pay stubs, tax returns and W2s or 1099s.

Borrowers with court ordered alimony and child support must document receipt of the income for a minimum of three (3) months and proof that it will continue for at least three (3) years.

What is the minimum credit score required for FHA loans and first time home buyers?

A tri-merged credit report score of 640 is preferred. Depending on overall credit, sometimes borrowers may qualify with middle scores as low as 580.

In some instances, where a co-borrower does not have any credit scores, FHA will consider approval so long as the primary borrower meets the minimum credit score requirements and has more than 50% of the qualifying income with a minimum of 3 tradelines active for last 24 months.

Regardless of credit scores, FHA still evaluates overall credit history to determine if borrower gets approved eligible findings that meet FHA approval guidelines.

What is the maximum seller contributions/concessions for FHA loans?

Seller and other third party contributions are limited to 6% of the sales price.

FHA Credit & Debt Requirements

What is the FHA waiting period for borrowers with previous bankruptcy?

Bankruptcy does not automatically disqualify a borrower from obtaining an FHA loan.  Minimum 2 years since discharge of chapter 7 bankruptcy.  Borrower with less than 2 years’ discharge may qualify for financing so long as they meet the extenuating circumstances as defined by FHA/HUD.  Same rule applies for borrower with chapter 13 bankruptcy.

However, borrower with chapter 13 bankruptcy may still qualify if the bankruptcy has been discharged less than 2 years if the lender is willing to do a manual underwrite with satisfactory payment history under the chapter 13 plan.

How does FHA treat charge-offs for credit card and installment loan?

Charge-off accounts are not included in borrowers' debt.

How does FHA treat collection accounts for credit card and installment loan?

For non-medical collection accounts when the cumulative outstanding balance is greater than $2,000 borrower may either pay-off the balance or, for the purpose of debt-to-income ratio (DTI), provide proof of a payment plan. If neither are an option, the lender must use 5% of the outstanding balance and include it in the borrower's DTI calculation.

What about borrowers applying for FHA loans that are currently in consumer credit counseling?

If the file receives automated Approve/Eligible findings then no documentation is required from the borrower.

Can I still qualify for an FHA loans if I have delinquent child support?

Delinquent child support must be paid current or in a payment plan.

What are the FHA guidelines for delinquent federal tax debt?

Borrowers with delinquent tax debt are ineligible unless currently in payment plan.

Can you get an FHA loan if you have a tax lien?

Borrowers with delinquent tax debt are ineligible unless currently in repayment plan. Repayment plan tax liens are not required to be paid in full if documentation is provided indicating the borrower is in a valid payment plan.

The following is required:

  1. The borrower must have made a minimum of 3 months of scheduled payments and documentation of the payments is required.
  2. The payment must be included in the DTI calculation.
  3. The borrower cannot prepay the payments to meet the 3-month payment requirement NOTE: Borrowers with delinquent taxes may or may not have a tax lien. Borrowers currently in a repayment plan, and the IRS has not filed a tax lien, are not required to meet the minimum 3-month payment requirement. The payment to the IRS will be included in the DTI calculation.

What are the FHA guidelines for borrower with previous foreclosure and deed-in-lieu?

Foreclosure waiting period is measured from the date of title transfer. Three (3) years must have elapsed from the time title transferred. If the foreclosed loan was an FHA loan, the 3-year waiting period is based on the date the FHA claim was paid (e.g. foreclosure 11/12/14, FHA claim dates was 7/12/15, the 3-year waiting period ends 7/13/18).

Borrowers with foreclosure/DIL within 3 years of case number assignment that was due to documented extenuating circumstances may be eligible if the borrower has re-established good credit since the foreclosure. A downgrade to manual underwriting is required. If the foreclosure was included in the bankruptcy, the foreclosure waiting period still applies. HUD treats the foreclosure and BK independently, not as a single event.

What are the FHA guidelines for borrowers with previous short sale and/or pre-foreclosure?

The three-year waiting period from date of title transfer still applies unless they were current at the time on short sale.

What are the FHA guidelines for income and debt ratios (also called DTI or Debt-to-Income ratio)?

Maximum debt-to-income (DTI) ratio varies based on overall credit history and assets.  Typically, the DTI cannot exceed 45% of the borrower's gross income.  However, in some cases borrowers with as high as 54.9% DTI may be eligible and in other cases borrowers may be capped at 43% DTI.

How does FHA treat deferred student loans?

Borrowers with student loans that are in deferment or not fully amortized will be required to calculate 1% of the outstanding balance as minimum monthly payment to be included in their debt-to-income ratio (DTI) calculation.

 

FHA Property Requirements

What are FHA eligible property types?

  • Single-family residences
  • 2 - 4 unit planned unit development (PUDs)
  • Condominiums (FHA approved projects. Approval must be valid at time of case number assignment)
  • Modular / pre-fabricated properties (single-unit only)
  • Factory built but not built on a permanent chassis; built on-site similar to stick-built homes; permanently affixed to the foundation; must conform to local building codes. Property is legally classified as real property and assumes characteristics of stick-built such as permanent connections to water, electrical and waste disposal systems.
  • Mixed use must conform to residential nature of the neighborhood, and commercial use cannot exceed 25% of the gross living area.

What are FHA ineligible property types?

  • Non FHA approved condominium projects and/or cooperative projects
  • Manufactured/mobile homes. Manufactured housing is defined as any dwelling built on a permanent chassis. Manufactured homes are ineligible even if the towing hitch, wheels and axles have been removed.
  • Condo Hotels, also known as Condotels, which are projects managed or operated as hotel/motel or were hotel/motel conversions
  • Unique properties
  • Farms, orchards, ranches and rural properties exceeding 10 acres
  • Mixed use must conform to residential nature of the neighborhood, and commercial use cannot exceed 25% of the gross living area.
  • Commercial properties
  • Properties located in lava zones 1 and 2

Can you get an FHA loan for a property acquired at auction?

If the subject property is purchased at auction, the buyer’s premium may be included in the calculation of the final sales price, as long as the amount of the buyer’s premium is reasonable and customary for the area.

Video: First-Time Home Buyer Tips

Buying for your first home is a huge decision and can be confusing for first-time home buyers-- but we're always here to help. Get first-time home buyer tips from our president and WFTV's Mortgage Expert, Shahram Sondi.

Most first-time home buyers go with an FHA loan but some prefer Conventional loan options, both of which are available with no closing cost options. You may also want to consider checking to see if your county offers a downpayment assistance program.

Most counties offer downpayment assistance programs. Some are continually funded, meaning they never run out of cash, while others are a fixed amount per year that is doled out on a first-come, first-served basis. Here are the downpayment assistance program requirements for some popular Central Florida counties:

Central Florida County Downpayment Assistance Requirements

Additional First-Time Home Buyer Tips

Video: How Do VA Loans Differ From Other Mortgages?

Video: Current FHA Guidelines

Video: What's The Deal With No Closing Costs?

Video: What Documents Do I Need To Apply?

Video: How Do I Get Pre-Approved For A Mortgage?

Video: What Type Of Mortgage Is Best For Me?

[vc_row][vc_column][vc_column_text]There are no shortage of mortgage options. From conventional loans to FHA loans to VA or USDA.

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