What Is A Rate Lock?

 

If you are buying a home with a loan in the South Florida area you may have heard of something called a rate lock from your lender.

Mortgage rates change constantly through an unpredictable combination of government policies and economic conditions. This video explains this common term called ‘rate lock.’

A “Rate Lock” is a guarantee that a lender will honor a specific combination of interest rates and points for a given period of time. A lock protects a buyer from rate increases but commits them to a higher rate if mortgage rates fall below the locked rate.

As of 2014, rate locks aren’t usually an option until a purchase offer for a specific property – new-home or resale – has been accepted by the seller. The borrower’s credit score, the loan-to-value ratio property type, location and other factors plus, of course, market rates and market conditions will also affect rate-lock decisions.

Decide whether to lock or “float” based on your capacity for risk and your best rational knowledge about construction and closing schedules. If your rate lock expires an extension might be available but both you and the lender will be looking at current mortgage rates to decide the best option.

At All Florida Title we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at at 954-566-2200.

In case you missed it, check out our last All Florida Title Company post: Are There Special Mortgages For First Time Homebuyers?

What Steps Need To Be Taken To Secure A Loan?

 

Looking to secure a loan for the purchase of your South Florida property?

You’ll see some pictures in this video to help you remember later, but the first step in securing a loan is to complete a loan application.

To do so, you’ll need the following information.

  • Pay stubs for the past 2-3 months.
  • W-2 forms for the past 2 years.
  • Information on long-term debts.
  • Recent bank statements tax returns for the past 2 years.
  • Proof of any other income.
  • Address and description of the property you wish to buy.
  • A sales contract on the home you want to buy.

During the application process, the lender will order a report on your credit history and a professional appraisal of the property you want to purchase. Each lender has their own criteria so be sure you understand fully what is expected from you to make the process as smooth as possible.

At All Florida Title we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at at 954-566-2200.

In case you missed it, check out our last All Florida Title Company post: All Florida Title Company’s Top 5 Tips to Help You Close More Sales in South Florida.

What Is An Appraisal?

 

Getting a home appraised in South Florida?

Every house is unique; appraisers are trained and licensed for expertise in putting a value on properties.

Appraisers don’t work for the buyer or the seller;  their primary mission is actually to protect the lender who’s risking money against the home’s value.

Appraisers have to weigh factors about the property and location – including size, condition and comparable properties – to appraise its current value.

They know how to focus on conditions that affect value; dishes in the sink don’t; damage and neglect do.

Appraisals lower than the proposed purchase price can affect transaction details. The seller might have to lower the priceor the buyer might have to increase down payment or fund additional escrow.

Appraisal seems a lot like inspection, but they’re not the same.

You can think of it this way:

Appraisers report on value to the lender.

Inspectors report on condition of the house and major components to the buyer.

So – expect both appraisal & inspection in your transaction.

At All Florida Title we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at at 954-566-2200.

In case you missed it, check out our last All Florida Title Company post: How Can The FHA Assist Me In Buying A Home?

How Can The FHA Assist Me In Buying A Home?

 

Buying a home soon in South Florida? An FHA loan maybe worth exploring.

Remember these points from the video:

The FHA works to make homeownership a possibility for more Americans.

With the FHA, you don’t need perfect credit or a high-paying job to qualify for a loan. The FHA also makes loans more accessible by requiring smaller down payments than conventional loans.

In fact, an FHA down payment could be as little as a few months rent. And your monthly payments may not be much more than rent.

At All Florida Title we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at at 954-566-2200.

In case you missed it, check out our last All Florida Title Company post: How Can I Keep Track Of All The Homes I See

How Are Pre-Qualifying And Pre-Approval Different?

 

Watch this video and it’ll make sense.

Pre-qualification is an informal way to see how much you maybe able to borrow. You can be ‘pre-qualified’ over the phone with no paperwork by telling a lender your income, your long-term debts and how large a down payment you can afford. Without any obligation, this helps you arrive at a ballpark figure of the amount you may have available to spend on a house.

Pre-approval is a lender’s actual commitment to lend to you. It involves assembling financial records and going through a preliminary approval process. Pre-approval gives you a definite idea of what you can afford and shows sellers that you are serious about buying.

What Is The Best Way To Compare Loan Terms Between Lenders?

 

Watch this video and take a few notes!

First, devise a checklist for the information from each lending institution. You should include:

  • the company’s name and basic information
  • the type of mortgage
  • minimum down payment required
  • interest rate and points
  • closing costs
  • loan processing time
  • whether prepayment is allowed

Speak with companies by phone or in person. Be sure to call every lender on the list the same day as interest rates can fluctuate daily.

In addition to doing your own research your real estate agent may have access to a database of lender and mortgage options or suggest a variety of different lender options.