Joe Knows Mortgages

Currently, there are very few ways to get 100% financing to purchase a home in Brevard County.  If you are a veteran with VA eligibility or you are purchasing a home in a USDA declared “rural” area, you may be eligible to purchase a home with 0% down.   However, for everyone else, mortgages require a down payment.

What do you do if you do not have the money necessary for a down payment, but you are an otherwise excellent candidate?  There are some other options out there;

• FHA loans require a 3.5% down payment, and the whole amount can come as a gift from an eligible source.

• On a conventional loan, you can get a gift from an eligible source too; however, if the gift is not for 20%, the buyer must have 5% of their own funds for closing costs.

• Brevard County has a first time homebuyer program through Brevard County’s
  First Time Home Buyer Program that will give qualified applicants money for down payment and closing costs.

Whether you are planning on getting gift funds, taking advantage of community or governmental funds, or selling your antique GI Joe collection, make sure to speak with your mortgage professional to assure that you are properly documenting the funds for the underwriter.  There are many rules and regulations surrounding gift funds and cash to close and improper use could spell disaster.  Please contact me anytime for further information.

Brevard County Mortgage and Brevard County Real Estate Market Data For February 2010

It is a great time to be involved in the Real Estate industry; home prices are great, interest rates are at historic lows, and there are still government incentives to purchase a home.  The government incentives are set to expire, and you will need an executed contract by the end of April to take advantage of the tax credit.  There is still time to get in on this once in a lifetime deal, so do not delay, act now!          

 The trend of lower price listings selling continues into February.  With almost 80% of the transactions in Brevard County under $200,000, there seem to be great deals out there, with buyers purchasing value.  These low prices are allowing those who were not able to purchase what they where looking for a few years ago, to get into the right home at the right price now. 

While 50% of homes are still being financed, this February 2010 we had 254 cash Transaction which accounted for 49% of the market.  With almost 50% of all homes in Brevard county being purchased with cash, following January’s trend, it appears as though Cash is still ruling the market.  This is a sign that people see no better place for their money than in real estate.  This is a true signal that we are at or near the bottom. 

While we have almost returned to a “normal” market, it has been shown that homes are selling.  If the home is priced right, it will sell in a reasonable amount of time.  New listings that are aggressively priced are quickly sniffed out by those looking to buy, and usually have offers in on them in a short amount of time.  If you find a home that you love, and it is priced right, then you have to act fast.  With interest rates as low as they are, government incentives still on the table, and homes aggressively priced – It is a great time to be a buyer.  If I can help you discover your purchasing power, or take a look at your financing options, please contact me today!

This is probably one of the biggest concerns that my valued clients have when making loan application.  Because gambling with a client’s interest rate is never advisable, I always advise my clients to lock in their interest rate at the earliest opportunity.  In my business, I have a standardized system in place that we adhere to for all of our clientele.

When considering a lock, there are three main elements to take into consideration: 

 • Interest Rate     

 • Points   

 • Length of the lock
Locking a loan eliminates any risk of the borrower being exposed to market volatility. It provides the security of having time to complete the mortgage and real estate transactions with some sense of order. The lender must disburse funds to complete the transaction within the rate-lock period, or else the original commitment to provide a loan at a certain interest rate will expire.

When a lender permits an extended lock-in period, the borrower will usually see either a higher interest rate or more points associated with the loan. The lender does this to minimize their own exposure to market volatility; hence the borrower pays for the lender to take on this risk.

For example, a 30-day rate lock commitment may cost the consumer one-half point, while a 60-day rate lock commitment could cost 1 full point. If the borrower needed an extended lock period, but did not want to pay points, the lender could make up the difference in the interest rate. In this case, typically, a 60-day lock would have a higher interest rate than a 30-day lock.

My team’s standard procedure is to lock in a rate as quickly as possible once we have received the loan application. My team and I let our clients know that while interest rates fluctuate daily, most lenders do not want to lose any business. We know that in many cases, if there is a significant rally in the market that causes interest rates to drop .25% or more, we can ask the lender to renegotiate the rate. or understand that we will take the loan to another lender. Often the lender allows for a renegotiation of the rate to avoid losing the loan to another lender.

If we allow our clients to sit on the fence and not lock in a rate quickly, we would leave them exposed to market volatility. Then, if rates do increase, the borrower may be unable to qualify for the loan they want, which is a situation we try to avoid at all costs.
By knowing our clients’ needs and working intimately with them to make the right decisions, my team and I are proud to say that we have many clients who are raving fans.