Have You Checked The Recent Home Valuations In Florida?
In some areas of the Florida and the country as a whole, houses are worth more than twice their value from just three or four years ago. The market is definitely hot!
Millions of people hopeful of owning a home are applying for mortgages throughout the country. One of the areas with the highest volume of home-buying is Florida.
Florida is an attractive market, so if you’re trying to find the best mortgage in Florida it helps to have a great mortgage lender. The increased competition means houses are going to go fast. It will help to have all your “ducks in a row” with a knowledgeable professional who can get the job done.
Fortunately, for you, this article is about how to find such a person. Read on and you’ll be well on your way to a successful mortgage lender and home search!
One of the reasons Florida is such a great location is because of its real estate pricing. Florida’s housing prices are relatively low compared with other areas of the country. Especially when you compare it to some of the hotter markets in the U.S.
It’s also a very popular area for people from other areas of the country, like the Northeast, to settle. People relocate for the weather, for retirement, and most recently, for the increased freedom during the COVID-19 pandemic.
All this new activity means a lot more homebuyers in the Florida market. In fact, the state’s CFO, Jimmy Patronis, has said that 900 people relocate to Florida every day.
Competing with that many homebuyers is reason enough to search out the best mortgage lender in Florida.
What To Expect
If you’re going to hunt down the best lender for your Florida mortgage, you need to know what to look for. For most people, their home is the biggest purchase they make in their entire lives. Making sure your team of home buying professionals (i.e. mortgage lender, realtor, home inspector, etc.) is top-notch is an important part of the process.
The process isn’t an easy one. It’s going to take some elbow grease on your part as the buyer. But, with a little hard work, you should have no problem finding the best professional to get you funding for your home.
Know Something About Your Credit
You’ll need to take some steps to prepare as you begin your search. The first step would be assessing, and possibly repairing, your credit.
If you’re already renting, you probably have some idea what your credit score is. It’s one of the most crucial factors in securing financing and purchasing a home. Mortgage lenders do look at other things, but credit is a big one.
You’ll want to check your credit score several months before applying for your mortgage. That way if anything negative pops up on your report, you can either dispute it yourself or work with a credit repair professional to do so.
It’s also important to not open any additional cards or take out any additional loans during your home search. These could negatively affect your credit and result in your mortgage application getting declined at the last minute.
Paying off any outstanding credit card balances and making your monthly payments on time will go a long way to helping you find the best mortgage in Florida.
Put It In The Piggybank
Save, save, save. If you don’t have a budget for yourself already, now is the time. You’ll be dealing with all kinds of charges and fees as you go through the home-buying process. Closing costs, recording fees, and mortgage insurance are just a few of the things that can sneak up on you.
It’s important to have a “reserve” in your bank account to cover the unexpected.
You’re also going to have a down payment to worry about. Depending on the loan you can secure, your down payment can range anywhere from 3.5% to 20%. With the average U.S. home price currently at $287,148, you may be looking at a down payment of close to $30,000.
That can be a lot for anyone to come up with when it comes time for closing.
Show Them The Money
Mortgage lenders want to see that you have a stable income. Income stability helps them predict your ability to pay back the loan. This creates a strange phenomenon.
A lot of high-net-worth individuals in this country own their own business or work in a profession like sales. If you’re an entrepreneur or a 1099 employee it can be hard to prove your income.
If you’re 1099 it’s easier than if you’re your own boss, but the bank will still want to see a track record of a stable income. They will want to see pay stubs spanning a period of about 24 months to prove your income stability.
Now, each situation is different. Ultimately, the bank or your lender makes the rules. They may ask for more or they may ask for less. It all depends.
Interviewing Your Mortgage Lender
Once you’ve done your pre-mortgage prep, and you’re in good shape financially, it’s time to go mortgage lender shopping!
The important thing to remember is that they need your business as much as you need theirs. It’s easy to get excited when you’re working toward buying a home. But take the time to ask your lender some questions to ensure they can get the job done for you.
Ask them how long the process is going to take. You’ll also want to know if they are going to be your main contact, or if there is another underwriting department you’ll be speaking to as things move along.
It’s also good to know which steps can be handled online and which steps need to be done in person.
These are the basic things you’ll want to know about your mortgage process. You should also ask them a few more detailed questions. Ask them how long of an interest rate lock you should shoot for. You’ll also want to know if closing falls through, and it’s not your fault, are you still responsible for paying those costs.
Usually, if your closing falls through by no fault of your own, you aren’t on the hook. But it’s always a good idea to check. Mortgages require a lot of legal paperwork and a lot of fine print.
When in doubt, ask the question. The more, the merrier. It’s always better to know what’s happening than to be left in the dark. Especially when it comes to buying a house.
Working With A Broker
There are two general ways you can apply for a mortgage. One is by going to a bank or other financial institution. When you go this route you are working with that bank or lender exclusively.
The second way is to go through a mortgage broker. These professionals have access to loan products from several different lenders. It’s a different scenario so there are a couple of different things you’ll want to ask.
You’ll want to know how many lender quotes they reviewed before presenting you with the “best” lender for your loan. Following up by asking them why they chose that particular lender is also a good idea.
Mortgage brokers also get a commission for the loans they close. You’ll want to know who is responsible for those commissions.
Is it you? Is it the lender? Is it a combination of both? This goes back to why it’s a good idea to start saving. You never know what other costs or fees like this are going to pop up throughout the process.
Comparing Mortgage Lenders
What are the important things to focus on when comparing one lender to another?
The first would be the interest rate. Rates change daily, so it’s a good idea to make sure you’re confident with your lender before locking in a rate and starting an application.
Another important factor is your lender’s fees. There are several fees associated with securing your home loan. Some lenders give you an itemized list of these fees, while others lump them together as one cost.
Inquire about all of them. Even the application fees. Everything is negotiable. Compare these fees across different lenders and negotiate whatever you can at closing.
A good mortgage professional will be “going to bat” for you throughout the whole process, so it shouldn’t take much negotiating anyway.
Your down payment is also something to consider when comparing lenders. You’ve been saving for your down payment, and it’s a good idea to put down as much as possible. Any money you put down reduces your mortgage balance that much more.
However, you’ll also want to save some money for immediate expenses after buying a home. These are things like furniture and repairs. That’s why it’s a good idea to ask your lender what down payment assistance programs they can get you access to.
A good mortgage lender should be aware of several assistance programs offered by Federal, State, and local governments. These programs can also be offered by local community organizations.
There are assistance programs available to you if you’re a first-time homebuyer as well.
Home Sweet Home
We know you’ve probably heard from friends and family that it’s hard to find the best mortgage in Florida. Follow these steps, ask these questions, and getting funding for your new home will be a breeze.
If you have any questions about how you can get started, or would like to discuss your specific situation, contact us directly.
At Realfi, we are experienced professionals when it comes to finding you the funding for your dream home. We are here to help in any way we can and are excited to join you on your journey to home ownership.