Mortgage Tips & FAQs

Mortgage FAQs

Are home financing interest rates the same regardless if using a mortgage broker or a bank?

No. Mortgage brokers receive wholesale home financing interest rates and thus result in passing on the savings to you as a first time home buyer. The concept is simple: Mortgage brokers have lower wholesale rates and banks are prices higher because they are retail with higher overheads/costs. That being said, it is still important that you shop with multiple local mortgage brokers to obtain the best home financing rates.

How do I find the best home financing calculator?

A home financing calculator or mortgage calculator is pretty much the same regardless of which website you.  Numbers don’t lie.  Depending on the type of home financing you choose, you may need a calculator that estimates your monthly mortgage insurance also if you are putting less than 20% down payment or getting an FHA loan which has MI regardless of how much down payment you put.  Lastly, always remember to add property tax and home insurance payments when determining your home affordability.  If you are not sure how to do this, your best option is to contact a Florida mortgage broker to assist and guide you with your home financing needs.

How does my credit affect my home financing options?

Home financing options are often limited based on you credit score.  The higher the credit score, the lower the home financing rates and lower the down payment requirements for first time home buyers.  Home financing options range from FHA loans, VA loans, Jumbo loans, USDA loans and traditional conventional loans.  Be aware that not every mortgage lender participates in the above home financing options and that using a mortgage broker typically results in being presented with more financing options. Also, depending on your credit score, if you have experienced a significant drop in the value of your current home, you may be able to refinance under the HARP loan program in Florida.

How to determine if you are getting the best home financing rates?

Home financing rates fluctuate daily with the stock and bond market.  Rates sometimes change multiple times in a day.  To get the best home financing rates you need to shop with at least three mortgage lenders or mortgage broker on the same day.  A mortgage is like a car and prices vary from dealer to dealer. If you work with a small owner operated, well reputable mortgage broker, you will typically get the lowest home financing rates in Florida. Even HUD, on their website provides information for first time home buyers and suggests that using a mortgage broker and shopping with multiple home financing companies will result in obtaining the best mortgage rates.

What are my choices for home financing if I have bad credit?

Based on the current mortgage environment, typically FHA loans are the only option for home financing for bad credit borrowers.  This does not mean regardless of how bad your credit is that you will get a mortgage.  All this means is that if your credit does not meet the conforming guidelines then you may qualify for an FHA loan with for instance only requires a 580 credit score compared to conforming loans that require a minimum of 620 credit score.

What documents will I need to apply for a mortgage?

Documents needed for getting a mortgage are pretty straightforward.  Other than having satisfactory credit, the lenders typically care about your income and down-payment for buying a home or equity in your home if you are refinancing.  Thus, if you are buying a home, the lender will need thirty days worth of pay stubs, last two years W2s and tax returns, driver’s license along with two months complete bank statements to verify assets being used for down-payment.

What is a home financing center?

There is no such thing as a “home financing center.”  A home financing center is nothing more than a mortgage broker or lender offering mortgage loan products to current or new homeowners.

What is considered poor credit when it comes to home financing?

When it comes to home financing, poor credit does not necessarily mean bad credit.  Some Florida mortgage lenders consider a 700 credit score to be poor credit while others consider less than 640 score.  As a result, it is best to discuss your options with a local Florida mortgage broker who has access to more loan options through various mortgage lenders before you assume that you may not qualify or get the best home financing rates.

What is the maximum loan amount for FHA?

In 2019, FHA mortgage limits have been increased.  The new base maximum FHA loan limit in most parts of Florida for a traditional mortgage is set at $314,827.  Essentially this means that for a borrower to be able to purchase a home with just 3.5% down-payment, the maximum purchase price can’t exceed $324,272. Borrowers looking at higher purchase prices, will have to seek conventional financing such as Fannie Mae or Agency loans.

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