Sarasota Mortgage Rates | The Mortgage Skinny

Well, we all know the economy is going through some issues, and being in the mortgage business we’re always hoping things will change.  The key to staying successful in this business is keeping a positive attitude and making yourself an expert.  You want to be the GO TO person when someone has a question about financing, and the reason why I’m saying this is because you need to learn about Foreign National lending.

Foreign Nationals are buying real estate over here in the U.S. for two reasons.  For one, their currency has an exchange rate that almost doubles the U.S. Dollar.  Right now the Euro is worth just over $1.50 and in the Pound is currently worth just under $2.00.  So for an English investor to come over here and purchase a $200,000 home, it really translates into them buying a $100,000.  Why wouldn’t a European come over here and buy a beautiful second home they can visit at anytime?  Their money is worth double the amount… if they want to go to Disney world and spend $100 on tickets, it really means they’re only spending 50 pounds.

Another reason why Foreign Nationals are coming over to the U.S. and buying real estate is because it’s a buyers market.  Homes that were selling two years ago for $400,000 are now listed for $250,000 and will most likely go for less than that.  This is the type of market where the old saying “The poor get poorer and the rich get richer” except this translates into countries.  Right now the U.S. is in a lot of debt and the government is trying to fix this but it’s not something they can do over night.  In the mean time other countries are coming over and buying property, businesses, etc. at a discount price and in turn will cash them in when the time comes for a higher profit.  It’s all relative. 

 Here’s the way I look at Foreign Nationals and the Mortgage Market:  Yes, I know home values are going down, and yes I know a lot of home owners are losing a lot of money, but the only good thing coming out of this is First Time Home Buyers, Investors and Foreign Nationals.  As long as they are buying up the market, it’s going to create transactions that fill the pockets of Real Estate Agents, Mortgage Brokers, Banks, Title Companies and this in turn will create more spending which will boost the economy.  Every little bit helps!

If you’re in the Real Estate world and wondering why it’s important to look at the Foreign National world, just know they’re going to continue to buy, and you might as well be a part of the transaction.  Now is the time for them to buy and they’re not even hesitating to stroke a check.  This is their market!

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If you’re having a tough time making your monthly mortgage payments then read the rest of this article and maybe you will be able to figure out how to make ends meet.  There are 6 different decisions you can make in order to make ends meet.  Some of them may be very difficult to make but in order for you to make the right decision you need to have no emotion.  I know it’s extremely tough to have no emotion when you’re deciding if you should keep your home or not but having no emotion will be better for you in the long run.  Below are the 6 decisions you may need to make:

1. Re-negotiate your monthly payment with the bank.  I’ve heard a number of people have tried to do this and have not succeeded, but more recenently banks are starting to open their ears.  I just heard a story about a CPA who was working out new monthly payments with his clients mortgage companies and coming up with great results.  Supposedly he helped lower his clients interest rate down to 2% which allowed his clients to keep their home. 

2. Refinance your loan.  If you are in a situation where you have a high monthly mortgage payment due to a high interest rate and you have enough equity left in your home to refinance, then I highly suggest this.  This may not be a choice for some homeowners because they are in a situation where they owe more on the home than it’s worth.

3. Sell and Cut your Losses.  A great way to get rid of your monthly payment is to sell your home and cut your losses.  If you have money in the bank to pay for these losses then this is an option.  If your home is worth more than what you owe on the home, then this is a great option as well.  This isn’t a great option if you owe more on the home than what it’s worth and you don’t have any money in the bank to pay for your losses.

4. Short Sale.  Short selling your home in today’s market is the best way to cut your losses if you can’t do any of the above.  A Short Sale consists of presenting your bank with a contract that is below market price and asking if they would be willing to accept the contract and close out your lien without putting a deficiency lien against you for the difference.  With the way the market is going, banks are more likely to accept a short sale.  A number of banks are dealing with a lot of foreclosures which consists of a lot of fees for a bank, so doing a short sale cuts out a lot of these fees.  More than likely if they don’t accept a short sale it will result in foreclosure which is extremely costly.

5. Foreclose.  Foreclosing on a property is probably the worst thing you can do.  But if you have no other option, then foreclosing is definitely a way out.  If you read my previous article about foreclosing than you know exactly why you shouldn’t.  Your credit score will go down, it costs the bank a lot of money, and the bank has 4 years to put a deficiency lien against you which may cause you to be in the same position years down the road. 

6. Bankruptcy.  Bankruptcy is not a bad decision if you have no other way out and there is no light at the end of the tunnel.  Filing a Chapter 7 Bankruptcy will wipe away all your debts and is basically be the end of the story.  In today’s world it’s tougher to qualify for bankruptcy, you either need to have an income below the median income or you need to be qualified as insolvent.  Either way, once you have qualified your creditors can no longer contact you and your assets will be divided between the creditors.  The creditors can not put any lien against you and you are officially working with a clean slate.  Only problem with this is your credit score drops dramatically and you’ll have a tougher time qualifying for credit cards, auto loans, and mortgages.

None of these decisions are something you want to make.  But depending on your situation it may be something you have to make.  As I’ve said before, I don’t reccomend you making a decision this big without first consulting an attorney or CPA. Every situation is different so contact someone who can review yours and help you make the right decision.

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What kind of insurance do I need?
Obtaining the appropriate insurance for your home can bring peace of mind.  Some insurance decisions must be made prior to the loan closing.  Certain types of insurance are often required by the lender and will be included in the closing costs; other insurance is optional to the buyer.  Typically, property related insurance payments are managed through the escrow account.  There are three main types of insurance plans to consider when you purchase a home. 

Title insurance provides a protection from uncovered claims against the title of the property you are acquiring. Private mortgage insurance (PMI) protects the lender against default. Homeowners insurance packages several types of coverage aimed to protect you from damage or loss to your home.

Title Insurance
Title insurance provides protection from financial loss due to claims made against the title of the property including legal defense of the title against those claims.  This insurance is usually provided after a title search is done to uncover any interests or liens on the property, in order to clear the title of any claims against it.  This type of insurance provides protection against past defects, not future faults. The last thing you want is to have purchased a home and then find out their is an existing lien from a third party. Read the rest of this entry »

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Are you in the preliminary stages of getting a home and thinking about getting a mortgage loan? The task of getting a mortgage loan can be rather difficult or easy if you are not prepared for what is to come.  It is helpful to see an overview of the process.  A Mortgage Planner can be useful in guiding you through this process, even before the search for a house begins.  The mortgage planner takes you through the four basic phases from the preliminary decisions through the final loan funding.  Let’s take a closer look at these steps:

Preliminary decisions
First step is making the appointment whether it be over the phone or in person with a trusted and qualified Mortgage Planner. The loan officer will help guide you down the right path in determining the type of loan that will benefit you most.  Based on factors such as your overall short and long term goals, employment history, income and debts, and credit history, they can decide the general amount that a lender would loan you and how large of a payment you would be comfortable in making.  They will also consider the best terms available and the legal ramifications of ownership.

Pre-Qualification      
Next, the Mortgage Planner will gather and review the necessary information (such as residence and employment history, assets, etc.) and run a credit score in order to give you a Pre-Qualification Letter.  This letter is perfect in presenting to the seller becfause it tells the seller that you are a viable buyer.  Read the rest of this entry »

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Are you interested in trying to improve your credit scores so that you can get a better interest rate on your mortgage?  In this article I’ll show you how to go from that sub prime loan with prepayment penalties and high interest rates to an A-paper loan with low closing costs and low interest rates.  Consumers interested in purchasing or refinancing a home will pay an interest rate based on current market conditions and their ability to pay back the loan. The borrower’s income and debt ratios are taken into consideration by the lender, as well as the predictability factor provided by credit scoring. It’s important to have a mortgage professional in your corner that has a keen eye for solutions to improving credit scores in an effort to get the best interest rate possible.

Interest rates associated with various loan programs are broken down into schedules based on credit score ratings. While each lender has its own guidelines, it’s safe to assume that as the consumer’s credit score goes down, interest rates will go up.

A borrower with an outstanding credit rating will get what is called an A-paper loan. This type of borrower is rewarded with a lower interest rate because they have a proven track record of using credit sensibly and paying their bills on time.

Loans designed for consumers with less-than-perfect credit – sometimes referred to as “sub-prime” – can range anywhere from A-minus, B-paper, C-paper or D-paper loans. Read the rest of this entry »

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Few things are more exciting than signing a contract to purchase a home. After the excitement dies down, though, many homeowners are often discouraged by the complexity of the mortgage application process.

But applying for a mortgage doesn’t have to be a complicated and cumbersome process. These five steps can help the mortgage application process run smoother, faster, and more efficiently.

1. Know your credit score. Your credit score is the most important factor in determining what type of mortgage you may qualify for and what your interest rate will be, so it’s something you should obtain early in the process. In general, an ideal score is anything above 680, while a score below 620 may result in higher interest rates and tougher loan programs. But don’t fret, there are loads of programs for the credit challenged borrowers.

2. Prepare the paperwork and other necessary documentation. When you meet with your mortgage loan officer, you’ll typically need to bring the following: Read the rest of this entry »

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