At Palm State Mortgage, we have recently noticed an uptick in the number of house hunters, as Spring officially begins. House shopping is like a special kind of Florida Spring Fever.
We see individuals, families and couples cruising neighborhoods, enjoying curb appeal and following the handsome blazers of their Real Estate Agents. We can not help but hope that all of these house hunters have learned some basic information about mortgages.
One thing is certain; during the housing crisis, many house hunters plunged into mortgage arrangements blindly, without even a basic understanding of the terms of their own mortgage. This is why we have assembled some basic mortgage information for you today, in the primer we call, “An Insider’s Pocket Guide To Mortgage Knowledge,” which includes five fabulous, fundamental factoids.
Factoid 1: APR is a measure of mortgage costs and it is translated as “annual percentage rate.”
The cost of mortgage loans is quite complex and means more than the interest rate. Also included are: upfront origination fees, closing costs, and any mortgage points you pay into account. Only after adding all of these do you get a clear picture of the total cost of your loan. “The APR makes allowances for all those costs, giving you a better gauge to make comparisons between different lenders. Often, you’ll find that lenders that offer lower rates actually end up charging a higher APR once you add in the fees.”
Factoid 2: Mortgage rates are in constant flux.
You are probably aware that stocks and bonds rise and fall throughout a day, but many of you might not understand that mortgage rates also rise and fall due to market forces. It’s a mistake to believe that mortgage rates are static.
Long ago someone started a myth that these rates were published once a day. The reality is that you might get a quote in the morning that is no good in the afternoon. “That hasn’t been a huge problem lately, with rates near all-time lows, but in more challenging interest rate environments, it’s essential to understand the value of getting a mortgage rate locked in quickly.”
Factoid 3: Different lenders charge different rates and fees.
New regulations have standardized many mortgage loan procedures for your protection. However, different lenders need not offer the same rates on mortgages. Lenders also continue to be free to charge their choice of fees for appraisals, title insurance, and those inevitable credit checks.
Here’s where a mortgage broker like Palm State Mortgage can help you immensely. We will compare the offers of different lenders. We will be positive you’re paying the smallest charges for those fees while maintaining the best possible rate.
Factoid 4: You might be able to refinance your home, even if your mortgage is “underwater.”
A mortgage is said to be “underwater” if you find yourself owing more money than your house is worth. When this happened during the financial crisis, homeowners found it impossible to use low-interest rates to refinance their mortgages.
Today, government assistance is available in the form of the Home Affordable Refinance Program or the FHA Streamline Refinance program, and “many homeowners have successfully refinanced their existing mortgages despite being ‘underwater’ on their loans. Different rules apply depending on whether your loan is backed by Fannie Mae, Freddie Mac, or the Federal Housing Administration.”
If you already have a nice house, perhaps your Spring Fever could be cured by refinancing instead of relocating.
Factoid 5: Low-down-payment loans are still available.
In a perfect world you could put a 20% down payment on a house and receive instant equity. In reality, it is difficult for a modern family to save 10%, 5% or even 3.5 %of the loan value, for a down payment.
Fortunately, with loan programs offered by federal agencies like the Federal Housing Administration, the Veteran’s Administration, and the Department of Agriculture, you may be able to get financing with very little money down.
At Palm State Mortgage, we will help you explore all of your options. Our specialty is putting the right loan applicant with the right lender, at the right time.
We thank you for reading our blog today, and we hope you come back often to discovery information you can use to cure your Spring House Shopping Fever!
