Many balloon mortgages have a “reset” choice. That allows you to reset your mortgage interest rate at the market rate for the rest of the amortization period. This option is typically only available if:

• You’re still the owner and occupant of the Orlando home.
• You’ve paid your mortgage on time every time for at least a year prior to the balloon note maturity date.
• You have no other liens against the property.
• You’ve satisfied any other conditions of the reset.

You may also qualify to refinance your balloon/reset mortgage. There are additional things to be aware of with balloon/reset mortgages:

• If you plan to sell your Orlando home before the maturity date of the balloon/reset mortgage, this type of mortgage may be a good option. But, keep in mind that if you end up staying in your house when the loan matures, you will need to reset or refinance the mortgage.
• Balloon/reset mortgages usually come with a slightly lower initial rate than most other mortgage types. You may qualify for a larger loan amount with a balloon/reset mortgage than you would with an ARM or fixed-rate mortgage.

If interest rates increase during the term of the balloon loan, you may have a large increase in your monthly payments when you reset or refinance your mortgage.

The Worst-Case Scenario
What happens to Orlando borrowers who don’t have the financial means to repay their second mortgage? In this case, it is highly likely that you will lose your home. The bank will sell your home to recoup their loss.

Since losing your home is a possible result of taking out a second Orlando mortgage, borrowers should carefully assess the risks of leveraging their home for cash.

A Second Orlando Mortgage is a Good Option for…
Prior to applying for a second Orlando mortgage, lenders require that you have a sufficient amount of income and an acceptable amount of home equity. Different lenders have different regulations, so it may be wise to shop around.

If you meet the lender’s qualifications, a second Orlando mortgage may be a good option for you if:
•    you need extra cash for only a few years, maximum;
•    interest rates are projected to fall;
•    you plan to sell your home in a couple of years, but need extra cash now;
•    you need money to repair your home;
•    you want to reduce the interest rates of other debts.

Don’t Apply for a Second Orlando Mortgage If…
Though a second mortgage is a good way to get fast cash, it is not a good option for everyone. You should not consider getting a second Orlando mortgage if you:
•    have a history of falling behind on monthly payments;
•    have an income or employment status that is subject to change;
•    recently bought your Orlando home and want to use a second mortgage to pay for the down payment. Substituting a down payment with another home loan is the easiest way to become financially hyper-extended. If you need a loan with a small down payment requirement, consider a Federal Housing Administration loan. This loan type allows borrowers to put down just 3 percent on their mortgage.

A Good Option for Responsible Borrowers
A second Orlando mortgage can often resolve current financial issues, but be sure to get all of your questions answered before signing the dotted line. In taking out a second mortgage, realize that you are risking what is most likely your safest asset: your house.

If you are a responsible homeowner with a good credit history, a second Orlando mortgage is a good option. It’s an easy way to receive cash at a moderately low interest rate. And better yet, the interest you pay on your second mortgage is often tax deductible!

In essence, a home equity loans depletes the value of your home equity. Receiving an Orlando mortgage home equity loan is a big decision, because if you fail to repay the loan, the lender may sell your home to earn back what was borrowed.

How Much Can I Borrow?
To establish the potential amount of your Orlando home equity loan, your Orlando mortgage lender will take the current appraised price of your home and subtract your current mortgage balance. They will also consider your employment status.

What’s the Difference Between a Home Equity Loan and a Line of Credit?
An Orlando home equity loan is basically a second mortgage. It is a one-time payout for borrowers who need a lump sum of cash. An Orlando home equity loan usually has a set interest rate that you lock in when you secure the loan. Borrowers must repay the total amount of the loan if they sell their home. Don’t borrow more than you need, because you’ll pay interest on entire home equity loan amount, whether or not it’s being used.

You might also want to consider an Orlando home equity line of credit, which acts more like a credit card. With an Orlando home equity line of credit, you can borrow money multiple times over the life of the loan, until you’ve reached your spending limit. A home equity line of credit has an adjustable interest rate that can increase or decrease, depending on the market. A line of credit is ideal for Orlando homeowners who have recurrent financial needs. Another benefit is that you just pay interest on what you borrow, not the entire loan sum.

When choosing between an Orlando home equity loan and home equity line of credit, assess your goals, monthly budget, other outstanding debts, the length of time you plan to live in your current home, and your ability to cope with financial risk.

Disadvantages of an Orlando Home Equity Loan
An Orlando home equity loan, like a conventional loan, has an application fee, preparation fee, appraisal fee, and other closing costs. Ask you Orlando mortgage lender if any fees can be waived. Also ask if there is a prepayment penalty.

Benefits of an Orlando Home Equity Loan
Many Orlando homeowners use home equity loans to consolidate other debts. The lower interest rate of a home equity loan allows the borrower an easier way to pay off credit card debt with just one monthly payment.

If you are a conservative borrower with a good repayment history, a home equity loan is an easy way to borrow additional cash at a reasonably low, tax deductible interest rate. 

1. Decide on a Real Estate Agent and Orlando Mortgage Professional You Can Trust

Unhappily, there’s no negotiating on this point. Start the new Orlando home purchase process on the right foot, and find an agent you can trust. Community awards, credentials, and knowledge are important but certainly not the only factors to consider. Find somebody who offers the best of both worlds– a professional whose answers you can count on and who you feel at ease talking to about fairly personal requirements. The home purchase process is still very much a people business, and having the right expert on your side will help ease future negotiations.

2. Negotiation Barrier Number 1 – The Commission

Now that you’ve found the ideal negotiation expert, it’s now time to turn the table and talk about commissions. A frequent question asked during the home buying course of action is, “who really pays the commission?” To the point, the buyer always pays. Why is that? Because commissions are normally a percentage of sale prices, the seller essentially includes these commissions into the final sale. If there were no commissions to be paid, the seller would have likely lowered the sale price. In fact, “For Sale By Owner” buyers commonly expect the seller to lower the price, knowing that a commission isn’t part of the equation.

3. Commission Negotiations Number 2: The Costs of a Home Loan

Furthermore, don’t overlook that there are commissions being paid for the loan origination. inquire from your agent how much you are being charged. Will this be paid out of your pocket, or will you be given an interest rate above wholesale to cover a yield spread premium (YSP)? In nearly all cases, asking the agent for a disclosure should help clear the air on how much you are really spending. Good Faith Estimates (GFEs) and Truth-in-Lending (TIL) disclosures can help make relationship shopping easier.

4. Question and Scrutinize Both Good Faith Estimate and Truth-in-Lending Forms

A mortgage lender is required by law to provide their Good Faith Estimate (GFE) within 3 days of receiving your application. Even though the GFE is just an estimate, you’ll want it to be as precise as possible to avoid any surprises at closing. With this GFE in your hand, you’ll find a inventory of estimated fees for the transaction– third party fees, lender charges, and cash needed at closing. The TIL shows your interest rate and APR (annual percentage rate), which makes it easier to compare loans. The TIL also indicates if there is a prepayment penalty associated with the loan. Your lender will only be able to give you a reasonably correct estimate if you reveal your credit (good, bad, or ugly), how much you have to put down, and the type of property you are buying.

5. Third Party Fees and Flexible Closing Costs  

Whether you have exceptional or bad credit, third party fees could be a considerable chunk of your closing costs (especially if you are buying in a HUD-designated “high-cost closing state”). Title and escrow fees vary from state to state, but they are still negotiable to a certain extent. The buyer typically does have the right to choose the title company in the transaction, although many don’t bother. Additionally, other fees such as appraisal and inspection fees may not be set in stone–although they will have less margins to negotiate. In the end, compare your final third party and closing costs fees with the original GFE. While they may slightly differ, they should not be significantly different.

6. Consider an FHA Home Loan

If you have difficulty finding financing for the purchase of your new home, or the risk-based surcharges on a conventional loan are higher than you like, ask your loan agent if you can qualify for an FHA home loan. Due to recent increases in conforming loan limits, FHA loans have become a great alternative for borrowers with credit issues buying modestly-priced homes. Home buyers with previous bankruptcies or foreclosures will also find it easier to obtain a mortgage so long as they’ve had a clean history for about three years. FHA home loan interest rates are quite competitive and their fees are quite minimal. Although FHA financing is available to almost everyone, it is typically used most often by first-time home buyer and moderate income borrowers.

7. Entice the Seller: Come Financed and Ready to Buy

Before you start thinking about negotiating the listed price, do your part to come equipped. As an alternative of just getting pre-qualified, get pre-approved by a mortgage lender. Have your agent help you to get pre-approved for a new home loan based on your credit, income, and loan to value ratio. Buyers with a pre-approval letter will move to the head of the line in negotiations and be in stronger positions. Sellers see an approval letter as a commitment to buy, and will be more open to possible dealing.

8. Negotiate the price of the Home with the Right Information

Here’s where having the right expert by your side will pay off greatly. Ask your agent to do his or her homework and find out why the seller is selling. Is the owner in the middle of a job transfer or maybe even a divorce? How long has the home been listed, how many times, how’s the neighborhood doing? Did they already buy a home? All this information will help tune you into the sellers’ state of mind, and find out how willing they are to budge during negotiations.

9. Negotiate Your Way to Other Benefits, Don’t Just Center on the Sale

Although the sale price will likely be the focal point of negotiations, don’t look past other benefits such as seller concessions towards improvements, repairs, and closings costs. Buying a home is much more than signing for a mortgage and coming up with a down payment–with a few seller incentives, you can easily offset the costs of major repairs and upgrades. Additionally, other common seller incentives can include mortgage buy downs to help lower your monthly payments for the first few years.

10. Present Strong Offers, and Stop thinking about Lowball Offers. but Leave Room for Negotiation.

Clearly, you want to get the best deal. Unfortunately, so does the seller. Lowball offers create mistrust from the very beginning and do little towards serious negotiations. A strong offer is a serious one with a considerable earnest money deposit and room for further negotiations. Don’t complicate your initial offer with a list full of contingencies either. During negotiations, if the seller persists on a higher price, ask for something in return; maybe they can take care of the bathroom repairs, or throw in a few kitchen appliances and household furniture items?

Most importantly, always keep in mind that counter offers are still on the table for negotiation. Even if it’s a stingy full price counter offer, don’t hesitate to respond with another offer–after all, you have nothing to lose.

11. One Extra Negotiation Tip: Don’t Burn Your Bridges

Remember, this industry is still a people business. Don’t bad mouth the seller, the seller’s agent, and especially your own agent. This does little to help negotiations, and only creates mistrust between parties. Bottom line; don’t let your emotions ruin a negotiating opportunity.

You must do this

You are about to get an Orlando mortgage? Take a long breath think. Get ready to spend a little bit of time doing your research. Three or four hours of study may end up saving you thousands of dollars now, and tens of thousands of dollars over the years to come. Orlando home finance can be intimidating, but it’s not rocket science. A few simple considerations can make a world of difference.

Information gets you started

Educate yourself. Get multiple quotes. Orlando mortgage brokers will usually offer a better deal than a bank, but it doesn’t hurt anything to call a bank or two for comparison as well. A good mortgage broker will spend as much time with you on the phone as you need. And a truly professional mortgage broker will ask enough questions to understand your short and long term goals. If you don’t feel good about a conversation, trust your instinct; cross them off your list and move on.

All facts and figures must be in writing

Always ask for Good Faith Estimates. There can be a good many costs associated with getting a mortgage. You want to look at every one. Comparing Good Faith Estimates can be difficult because different mortgage lenders often use different terminology. Don’t let that stop you. It’s also a wise to ask the mortgage broker if there are any additional costs that are not shown on the estimate.

Disreguard the APR it is often misleading

APR, or Annual Percentage Rate, was originally designed to permit borrowers compare mortgages. I won’t go into the mathematics involved, but in principle APR was a great idea. In real world use it has turned out to be useless. Lenders do not all use the same inclusion methods in calculating APR. To add to the confusion, adjustable rate mortgage calculations are notoriously misleading. But that’s okay! APR involves two variables, note rate, and closing costs, and all you need to see is on the Good Faith Estimate.

Rate versus Points

It is  my experience that when people are shopping for a new Orlando home mortgage they often get fixated on the interest rate, and ignore the points. Interest rate and points are inversely related. Unless you specify that you don’t want to pay points a lender is likely to price your loan with one or two points. This will make your rate lower, but it may not be a better deal. If the lower rate saves you fifty dollars a month on your payment but you pay an extra five thousand dollars in points, it will take you eight years to catch up with the cost of the points. Do the math.

Avoid the margin trap

Many adjustable rate mortgage programs now offer a variety of margins for you to choose from. This means that you may have an chance to control your future interest rate. Sooner or later all adjustable rate mortgages adjust to an interest rate that is equal to an index plus the value of your margin. You have no control over the movement of the index. But if you are able to get a lower margin you will have a lower rate (once your loan starts adjusting) for as long as you have your loan. Your good faith estimates should all state the margin for your loan. Phone the individual mortgage brokers and tell them you are interested in a lower margin. Don’t be shy. It’s your money!

The Good and bad sides of Pre-payment penalties

A large number of people are averse to considering a loan with a prepayment penalty. But it is worth looking into. Adding a prepayment penalty to your loan may reduce your interest rate significantly. Prepayment penalties typically expire after three years, but recently many lenders have started offering a choice of one, two, or three year penalties. Will you still be in the home past the expiration of the prepayment penalty? If you outlast the penalty you have reduced your monthly payment for as long as you have the loan. That can add up. And it didn’t cost a penny!

Choose wisely and carefully

There are a large number of mortgage programs to choose from currently. You can pick a fixed or an adjustable rate mortgage. Or you might choose one of many hybrid fixed period adjustable programs designed to give the comfort of a fixed for a predetermined number of years before starting to adjust. Interest only options are available now on both fixed and adjustable rate programs. When selecting your mortgage program think about yourself. Any decision only makes sense if it makes sense in the context of your life.

As an Orlando home owner, refinancing your mortgage involves paying off your present Orlando mortgage and getting a totally new mortgage loan with better terms.

Well, what exactly does “Better Terms” mean?

• A lesser monthly Orlando mortgage payment
• Cash out to perk up your new Orlando home, cover expenses, pay off credit      cards, etc.
• A fixed rate loan to eliminate uncertainty with adjustable rate mortgages (ARMs)
• Several other benefits depending on your personal situation and goals

Mortgage refinancing can give you the freedom to change the terms of your current loan with a new loan to meet your needs.

With Less Than ideal Credit Refinancing Is Still Available
Even though poor credit can make the mortgage refinancing process awkward, it is still very possible. In fact, refinancing your existing mortgage could even give you the assist you need to get back on your financial feet.

In the light of more stringent loan qualifications, there are still mortgage lenders that will approve and finance homeowners with less than wonderful credit. Everyone’s situation will be different, and lenders’ qualifications do vary time, so be sure to request quotes from competing refinance lenders to make sure you are getting the best refinance deal available to you.

Get Your Hands on The Tools You Need to Start Your Refinance Today
If you make a decision to take advantage of the benefits of refinancing your mortgage, we hope to help you steer the path whether you’ve have perfect credit or have had some hiccups along the way. We have helpful articles which cover important information such as prepayment penalties, refinancing with bad credit, closing costs, cashing out your home’s equity, and various loan fees.

Orlando Property Taxes Add Up

We are a Orlando mortgage company. Our Orlando mortgage customers frequently ask us what they should anticipate from their future tax bill and how the homestead exemption applies to them. As property values in Orlando have moved upwards in the last ten years property taxes have become more important than ever to understand.

Recent Orlando Florida Taxes

Florida is a fine place to live. If you are moving here for the first time or relocating within the state you should understand your property taxes. After you close on your new Orlando home it will be reassessed for tax reasons. You should consider checking with the local property appraisers office for an estimate of your future tax bill.

What to Expect

If you go to  the Property Appraisers Office to get an estimate of your future property taxes you will likely be told to expect an annual tax bill between 1.5% and 2.0% of your purchase price. Florida counties individually are allowed to tax property for as much as 3% of the value. Ask questions and know what to expect.

Guidelines for Florida Homestead Exemption

The Florida property tax homestead exemption lowers the taxable value of your homesteaded property by $25,000 for property tax calculations. These days the Florida homestead exemption is likely to have a significant impact on your tax bill as property values have surged and then quickly droped over the recent decade. If you pay $500,000 for your home and get a $25,000 homestead exemption your savings do not add up to a significant percentage of your potential tax bill. But that does not mean that you should not bother filing for your homestead exemption!

Florida Caps Tax Increase

More significantly, the Florida homestead exemption limits the rate at which your property taxes can be raised. The millage rates can be changed – which would represent an across the board adjustment effecting everyone. But once your home is homesteaded the amount that your assessed value can be increased by is fixed.

This rule was enacted in the “Save Our Homes” Amendment to the Florida Constitution and went into effect in 1995. The amendment restricts the increase of the assessed value of a home with a homestead exemption to the lesser of 3% or the rate of inflation. So file for your homestead exemption.

The Primary Residence Only

The Florida Homestead exemption is only for your primary residence. This exemption does not apply to rental properties, or vacation homes. At this time the homestead is not transportable. This means that you do not get to carry your current assessed value with you to your next home. When you buy a new home you “restart the clock” and will have to pay taxes on the full value of our new home.

When You Should file

Usually your initial application for property tax exemption must be made between January 1 and March 1 of the year for which the exemption is sought. Initial application should be made in person at the Property Appraiser’s office.

Whats Coming in the Future

There is an open dialog in process that may change the substance of the homestead exemption rules in the coming years. This dialog has been triggered by the surge in Florida real estate values in recent years which has simultaneously reduced the liquidity of real estate by creating barriers to home purchases, and making it difficult for many people to move from their current home into a new home with potentially higher and unaffordable taxes.

There are many superb reasons to pick an FHA Orlando home loan over other Orlando mortgage choices, especially if one or more of the following factors apply to you:

• If you’re a first-time homebuyer
• If you’re worried about what will happen if you fall behind on your payments

• If you want to keep your monthly payments as low as possible

• If you don’t have a lot of money to put down on a house
• If you’re worried about your monthly payments going up
• If you’re worried about qualifying for a loan
• If you don’t have perfect credit

If any of these things give a picture of you, then an FHA loan may be right for you.

Other FHA Mortgage rewards Include:

Minimum Down Payment and Closing Expenses:

• Low Down payment less than 3.5% of Sales Price
• No reserves are mandatory.
• FHA regulated closing costs.
• Seller can contribute up to 6% of sales price towards buyer’s costs.
• Gifts for down payment and closing costs are allowed.
• Stress-free Credit Qualifying Guidelines such as:
• FHA will permit an Orlando home purchase 2 years after a Bankruptcy.
• FHA will permit a Orlando home purchase  3 years after a Foreclosure
• Bare minimum FICO credit score of 540.

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Easier Debt Ratio & Employment Requirement Guidelines such as:

• Fewer than two years on the job is allowed.
• Self-Employed individuals o.k.
• Higher Debt Ratio’s than other Orlando home loan programs.

FHA Home loans (Min 540 score)

• NO late payments after Bankruptcies
• 12 month cancelled checks or Management VOR
• Must have 3 good recent trade lines
• Payment shock limited to 1.5 times
• 33/45 DTI max
• No late payments or collection in last 12 months

An FHA-insured loan offers many benefits and protections that you won’t find in other loans including:

FHA loans have better rates: An FHA home mortgage has aggressive interest rates because the Federal government insures the loans for lenders. Always compare an FHA loan with other loan types.

FHA Orlando Mortgage loans are Easier to qualify: Because FHA mortgage insures your mortgage, lenders may be more willing to give you loan terms that make it easier for you to qualify.

FHA loans if you have less than perfect credit: You don’t have to have perfect credit to get an FHA Orlando mortgage. In fact, even if you have had credit problems, such as a bankruptcy, it’s easier for you to qualify for an FHA loan than a conventional loan.

FHA mortgage have More protection to keep your Orlando home: The FHA has been around since 1934 and will continue to be here to protect you. Should you encounter hard times after buying your home, the FHA has many options to help you keep you in your home and avoid foreclosure.

FHA does not give money to people for a home and it does not set the interest rates on mortgages it insures. FHA insures loans for lenders against defaults. For the best interest rate and terms on a mortgage, you should compare mortgages from several different lenders. An FHA-approved lender can help you start the loan application process.

You may use an FHA-insured mortgage to purchase or refinance a new or existing 1-4 family home, a condominium unit or a manufactured or mobile home (provided it is on a permanent foundation).

What types of loans does FHA offer?

Fixed rate loans - Most FHA loans are fixed-rate mortgages (loans). In a fixed rate mortgage, your interest rate stays the same during the whole life of the loan, normally 30 years. The advantage of a fixed-rate mortgage is that you always know exactly how much your monthly payment will be, and you can plan for it.

Adjustable rate loans – Most first-time homebuyers are a little stretched financially, so they want payments as low as possible at the beginning. With FHA’s adjustable rate mortgage (ARM), the initial interest rate and monthly payments are low, but these may change during the life of the loan. FHA uses the 1-Year Constant Maturity Treasury Index (1 Yr CMT the most widely used index, to calculate the changes in interest rates. An index is a measure of interest rate changes that determine how much the interest rate on an ARM will change over time.

The maximum amount that the interest rate on your loan may increase or decrease in any one year is 1 or 2 percentage points, depending upon the type of ARM you choose. Over the life of the loan, the maximum interest rate change is 5 or 6 percentage points from the initial rate, again depending upon the type of ARM you choose. The advantage of an ARM is that you may be able to afford more house; because your initial interest rate will be lower, as will your payment.

Purchase – Rehabilitation loans – Sometimes you might see a home you’d like to buy, but it needs a lot of work. FHA has a loan for rehabilitating and repairing single-family properties called the SF Rehabilitation Loan program (203k). You can get just one mortgage loan which includes the mortgage and the cost of repairs combined. The mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. The advantage of this loan is that you can buy a home that needs a lot of work, but you still have only one mortgage payment, and you can complete the repairs after buying the home.

Indian Reservations and Other Restricted Lands - A family who purchases a home under this program can apply for financing through a FHA approved lending institution such as a bank, savings and loan, or a mortgage company. To qualify, the borrower must meet standard FHA credit qualifications. An eligible borrower can receive approximately 97% financing. An eligible party can produce a gift for the down payment. Closing cost can be financed; covered by a gift, grant or secondary financing; or paid by the seller without reduction in value.

How does a FHA loan compare to a Conventional Loan? – Conventional loans usually require a larger down payment. And, if you have less than perfect credit you may not qualify for many conventional loans and find yourself being offered loans with higher interest rates and/or fees than you expected. The best thing to do is compare the cost of the conventional loan to an FHA loan line-by-line. What are the fees on each? What is the interest rate? How much is the mortgage insurance on each? How much down payment is required? For some borrowers, a conventional loan may be less expensive. For many others, it will be more expensive than FHA.

You just fell in love with the new Orlando home you want to purchase and together with your spouse and the kids started to have pleasant thoughts about it. But, you forgot to take a look at your down Payment! If you know exactly how much money you have for the down payment and closing costs, the other difficulties that are involved into the home buying process will go smoothly and much quicker. This includes the way you would write the buying offer and which mortgage programs you may qualify for. If you come to the table with only with a minimum amount of money for the down payment, you will be limited to decide on a just a small number of mortgage programs. In the unusual case where your best friend or your parents want to give you the total amount for the down payment or just a part of it as a present for Christmas, either way your choices regarding mortgage programs will remain limited. Another type of limitation to obtain an Orlando mortgage is if you have enough money to cover the down payment but you do need the seller to pay, at least, a small part of your closing costs. But, if you have enough money to make a big down payment and cover your closing costs, you of course will have a wider variety of options on the many mortgage programs available. These options may include conventional fixed rate loans, adjustable rate mortgages, graduated payment mortgages and some other with all the varieties included. The Orlando home you want to buy will be yours if you walk in the right direction. Ask your Orlando mortgage consultant before making any flawed decisions and remember that buying a home is one of the most important financial decisions you will ever make.