Category Archive: Florida Mortgages

Challenges First-Time Home Buyers Face

First-time home buyers are on the rise. According to Realtor.com1, in August of 2015, 35 percent of buyers said they were first-time buyers. Jump forward to August 2016, and 51 percent of buyers identified themselves as first-time buyers. But buying a home and getting a Florida mortgage for the first time comes with a unique set of challenges. Here are some of the things first-time buyers in Florida will face:

  • Down payments: The biggest challenge faced by most first-time buyers is coming up with enough money for a down payment. For conventional mortgages, many first time buyers believe they need to come up with a 20% down payment. On a $200,000 house, that’s $40,000. However, if those same buyers pursued a mortgage that’s insured by the Federal Housing Administration (FHA), they only need a down payment of 3.5 percent. On a $200,000 house, that’s $7,000. In fact, well qualified first time buyers can consider a Conventional loan with as little as 3% towards down payment.
  • Credit scores: Mortgage lenders depend on your credit score to determine who will get mortgage loans and what rate they’ll be charged. FICO scores range from the high 300s to the low 800s, and first-time buyers often don’t have long, established credit histories. That can mean a lower score. Lower credit score buyers should consider the credit flexible FHA loan approach and perhaps even compare it to a Conventional mortgage option, although conventional programs generally require stronger credit profiles and scores.
  • Employment history: Mortgage lenders prefer borrowers who have worked for the same employer for at least two years. This can be a problem for first-time buyers, who are still establishing their careers and may have changed jobs recently. Some first time buyers may qualify for an FHA with as little as 6 months with current employer.

Know your options

At Embrace Home Loans, we work with all kinds of borrowers in Florida, including first-time buyers. We can suggest strategies that will help you meet the first-time buyer challenges, including:

  • Low-down-payment mortgages or down payment assistance programs: In addition to FHA loans, which require a lower down payment, there are a number of down payment assistance programs available in Florida.
  • Financial organization: You can improve your FICO score by staying organized, paying your bills on time, and double-checking your credit for errors.
  • Steady income: While mortgage lenders like to see steady employment, many will overlook a short job history if you can show a steady source of income that will cover your mortgage payments.

Find out more

If you’re a first-time home buyer looking for your Florida mortgage, contact Embrace Home Loans at 407-733-6425. We’re experts in mortgage lending, and we can review your financial situation and help you find ways to improve your credit, locate a loan that’s right for you, and find a new home.

1 http://www.realtor.com/news/trends/first-time-home-buyers-face-different-challenges/?is_wp_site=1

VA Streamline Mortgages in Florida are on the Rise

Eligible veterans and active military members in Florida can take advantage of the Department of Veterans Affairs (VA) Interest Rate Reduction Refinance Loans (IRRRLs) to lower their interest rates and mortgage payments on their VA mortgages. Increasing numbers of Florida veterans are doing so. In fact, IRRRLs in Florida increased by a whopping 83.5 percent from 2014 to 2015, with 10,582 loans issued in 2014 and 19,419 loans issued in 2015.

The current low-interest rate is fueling this dramatic increase in VA refinance loans, but there are other reasons that eligible veterans and military personnel are rushing to refinance their home mortgages. VA refinance mortgages are called “streamline” loans because many of the traditional refinancing documentation isn’t required. That makes the VA IRRRL a fast and efficient option for VA mortgage refinancing.

VA Streamline Refinance Advantages

A VA IRRRL doesn’t require a property appraisal like many other mortgages do. And VA lenders aren’t required to get credit reports, set minimum credit scores, or verify income or savings. However, many VA lenders have internal policies for credit scores, some as low as 580 and credit reports to verify mortgage payment history only. The good news is that these requirements are typically much more lenient than those for other mortgages.

Other advantages include the fact that VA refinances allow the borrower to close the refinance loan without any out-of-pocket costs since the VA allows origination fees, VA funding fees, closing costs, and other costs to be rolled into the new refinance loan.

Benefiting You

The main rule that VA streamline refinance loans must follow is that the new loan must benefit the veteran. Obviously, lower interest rates and mortgage payments do benefit the veteran, but there are other benefits that veterans can pursue, including converting from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or getting cash (up to $6,000) for energy-efficient improvements to the home. If you’ve got a VA mortgage in Brevard County or elsewhere in Florida, Embrace Home Loans can work with you on a VA streamline refinance. Call us today at 407-733-6425.

How to Raise Your FICO Score

FICO originally stood for the Fair Isaac Corporation, and it’s the largest and best-known company that calculates credit scores. Now known simply as FICO, the company uses “predictive analytics” to evaluate your credit and predict whether or not you’ll pay your bills on time. So, if you’re shopping for a Brevard County mortgage, or elsewhere in Florida, your FICO score will have a large impact on whether or not you can get a mortgage and how much your interest rate will be.

What Goes into Your FICO Score?

Your FICO score is calculated from data in your credit report, and that data is grouped into five categories, which are then weighted to create your score. The breakdown is:

  • Payment history, 35 percent
  • Amounts owed, 30 percent
  • Length of credit history, 15 percent
  • Credit mix, 10 percent
  • New credit, 10 percent

Improving Your Score

With this information, you can easily see what actions you can take that will have the greatest impact on your FICO score. Here are some tips to boost your score:

  • Pay your bills on time. It seems obvious, but this is one of the best ways to improve your score. Your payment history is 35 percent of your score. A year of on-time payments can really improve your score.
  • Check your credit. Mistakes happen, and if they do, you need to find them. Get a free copy of your credit history, and review it carefully. Dispute any mistakes as quickly as possible.
  • Get a credit card. If you don’t have credit, you may need to establish it – responsibly, and show a history of on-time payments.  The longer you have established credit, the better. Don’t charge too much, and pay your bills on time.
  • Pay off debt. FICO looks at how much money you owe vs. how much credit you have available. For example, if you’ve got a credit card with a $5,000 limit and you owe $1,000, your debt utilization is 20 percent. Anything over 30 percent will typically drop your score.

Find out more about FICO scores

If you’re interested in obtaining a Brevard County mortgage, Embrace Home Loans can help you evaluate your FICO score and suggest ways you can get the best possible mortgage rates. Contact us at 407-733-6425 and let us work with you to get you the financing you need.

Mortgage Rates are Low: Should You Refinance?

Interest rates for 30-year, 20-year and 15-year fixed rate mortgages remain low as compared to August of 2015.  If you’re a homeowner with a Florida mortgage, should you refinance now?

It’s certainly worth the time to check to see if refinancing your home makes financial sense. Refinancing can certainly benefit you if it reduces your mortgage payment, shortens the term of your mortgage loan, or increases your home’s equity. To decide that, though, it’s important to actually check the facts, rather than relying on “common sense” ideas about mortgages that may not be actually true:

  • Refinancing Takes a Long Time: Many people feel that refinancing is stressful and time-consuming. That’s true of refinancing in the past, but it’s not necessarily true today. Mortgages today are simpler and much faster than they used to be. While the process will depend on factors unique to you, like your personal finances, the amount of equity, and your credit report, in general, refinancing is not as difficult as many people think it is.
  • The 2% Rule: Other people have heard that they shouldn’t refinance unless they can get a rate that’s two percent lower than their current rate. This is an old rule of thumb that dates back to when mortgage loans were much smaller and homeowners lived in their homes much longer. In fact, with today’s larger loans, even a quarter-point rate reduction may save you significant amounts of money.
  • Not Enough Equity: Many people believe they don’t have enough equity in their homes to refinance. It’s true that at least 20 percent equity is ideal (and may allow you to eliminate private mortgage insurance or PMI payments), refinancing can make sense even with much lower equity percentages.

Get the Facts

The main thing to remember about refinancing is that your situation is unique. At Embrace Home Loans, we work with many Florida homeowners to refinance their homes. We can review your finances, your existing Florida mortgage terms, and your personal situation, and help you evaluate if refinancing is right for you. Call us today at 407-733-6425, and we’ll help you decide what’s right for you.

Top 5 Mistakes First-Time Homebuyers Make

Home buying is on the rise, according to the fourth annual Mortgage Service Index from TD Bank. According to the survey, 42 percent of Americans expect the housing market to improve over the next six months, and 56 percent feel it’s a good time to buy a home.

That means, if you’re shopping for a new home in Florida, there’s going to be more competition for the available homes. First-time homebuyers can help themselves clinch the deal by avoiding some common mistakes:

  • Choosing a home that’s too expensive. With the financial meltdown of 2008 still fresh in everyone’s mind, it’s surprising that people are buying the most expensive homes for which they can qualify. Qualification doesn’t tell you how much you should spend on a house, it just tells you how much the bank will lend you. Huge mortgage payments may leave you with no money left for bills or savings.
  • Not educating yourself. Learn about your market and the value of the homes in it. Make sure you also understand ALL the expenses involved, like insurance, taxes, utilities, association fees, and more (see mistake #1). Don’t make the mistake of buying the first home you see. Shop around.
  • Not getting your finances in order. Make sure you’ve got a budget and you know exactly what you can afford (see mistakes #1 and #2).
  • Not scouting the neighborhood. Things are much different at night than they are in the daylight. Visit your prospective neighborhood at different times of the day. Park your car and walk around. Are there noisy neighbors? Barking dogs? Cars roaring through residential streets? Do your homework, and make sure that this neighborhood is right for you.
  • Working with the seller’s agent. The seller’s agent is working for them, not you, and is trying to get the highest possible price on the home. In short, they’re not on your side. You need your own licensed Realtor® who is working for you.

Make the right move

While it seems to fly in the face of the advice above, one final mistake is falling victim to the “grass is always greener” mentality. Some home shoppers are convinced that there’s always something better, so they refuse to commit to buying a home. If you’ve done your homework, then trust yourself. Being indecisive means you might miss out on the home of your dreams. If you’re a first-time buyer looking for a home in Brevard County or the state of Florida, Embrace Home Loans can work with you to get you qualified for a Florida mortgage and help you avoid some of the mistakes others make. Contact us today at 407-733-6425.

10 Secrets for First-Time Homebuyers

If you’re considering buying your first home, congratulations. Home ownership has a lot to recommend it, including building up equity and even tax breaks. But buying a home can be complicated, so here are 10 things you should remember:

 

  • Start early. For most people, buying a home is the biggest purchase they’ll ever make. So be prepared to spend some time shopping around. As you look at different options, you’ll get a much better idea of what you do and do not like, where you might want to live, and how much your house should cost.
  • Clean up your credit. One advantage to starting your home search early is that it gives you more time to work on your credit score, which can help you get a lower interest rate. Check your credit report for mistakes, reduce credit card debt, and pay all your bills on time.
  • Find or work with a licensed Realtor®. They can help find the home of your dreams and answer resale value questions.  You probably won’t live in your home for the rest of your life, so think about when you might eventually sell your home. There are renovation loans for homes, but you can’t renovate in an unfavorable neighborhood.
  • It’s not just a mortgage. Home ownership comes with a lot of other costs, like insurance (both homeowners and Florida mortgage insurance), taxes, utilities, neighborhood association fees, and more.
  • Get pre-approved. Pre-qualified and pre-approved are not the same thing. Pre-qualification can take as little as 10 minutes, but it just gives you an estimate of how much mortgage you might get. Pre-approval is more detailed, and your lender will verify your financial information and give you a firm idea of how much mortgage you can get. It’s still not guaranteed, but it’s much more certain.
  • Don’t over-spend. It’s tempting to buy the biggest house you can get, but you may not want to spend that much. You might want a less-expensive home in a better location, or you may just want some “breathing room” in your budget. Find a home that fits your finances and personal situation.
  • Get a good inspection. Home inspections are a crucial part of buying a home. You need to have an expert check the home for serious flaws and any other potential problems. You should always make any offer contingent on a home inspection.
  • Remember you’re also buying appliances. Be careful – you don’t want your air conditioner to die or your dishwasher to start leaking a few months after you move in. Find out how old the appliances are, and ask your home inspector if you have questions.
  • Check the property line. Remember, you’re buying the land, too. Make sure your neighbors didn’t build a fence on your property or you don’t own a tree that could fall down during our next Florida tropical storm and create liability. If it’s a significant lot, you may want to get it surveyed by a professional to confirm your property lines.
  • Location, location, location. Don’t just look at the house, check out the neighborhood. Take walks, and visit at different times of the day and night. Roll down your windows and listen. Do you hear dogs barking constantly? Can you smell a landfill nearby? If you can, talk to your neighbors. Find out as much as possible before you buy.

 

Most importantly, when you’re shopping for a home, be ready to walk away. Don’t get caught up in a bidding war and spend more than you can afford. If your inspector finds problems, it might be best to look elsewhere rather than trying to fix them. Remember, you’ll be paying for this house for a long time. You want it to be a good decision. If you’re currently shopping for a home, check with Embrace Home Loans. We’ll help you get pre-approved for a Florida mortgage and make sure you can get the financing you need before you start shopping. Call us today at 407-733-6425.

Five Kinds of Homeowners Who May Want to Refinance

There are probably thousands of homeowners who are eligible to refinance their Florida mortgage loans. Of course, anyone paying high interest rates should look to refinance. But there are also other types of people who may want to consider refinancing:

 

  • Homeowners who bought their homes more than a year ago. Most lenders will require borrowers to maintain their original mortgage for at least 12 months before they can refinance. If you’ve had your home for over a year, you may want to see what options are available for you.
  • Homeowners who are paying Florida mortgage insurance. Private mortgage insurance (PMI) is required for conventional mortgage loans for the borrower who made a down payment of less than 20 percent. Similarly, FHA mortgages require mortgage insurance premiums (MIPs). Based on your situation, refinancing could help you eliminate these payments.
  • Homeowners who carry credit card balances. Tapping into your home equity can provide you with a way to replace high-interest credit card debt with lower-interest mortgage debt. You need to be cautious, though. If you run your credit cards back up, you’ve simply increased your overall debt.
  • Homeowners who need home improvements. A new roof, new heating/air conditioning, or other improvements can be expensive and hard to pay for out-of-pocket. Refinancing could allow you to use your home equity to make these improvements. If the improvements increase the value of your home, that could lower your loan-to-value ratio and increase your home equity.
  • Homeowners with FHA or VA mortgage loans. Both these loan programs offer streamlined refinancing programs, and it’s easier to qualify for refinancing in today’s low-interest-rate environment.

 

If you fall into any of these categories, Embrace Home Loans can help you decide if it’s time for you to refinance your Florida mortgage. We’re experts at refinancing loans in Florida, and we can help you evaluate your options. Call us at 407-733-6425, or please browse the rest of our website for more information on our services.

7 Deadly Sins That Can Derail Your Florida Mortgage Closing

Typically, a mortgage approval can take about a month and a half in Florida, but that’s just an average. Closing your loan can take even longer if you’re buying a short sale or foreclosure. So, what deadly mistakes should you avoid while you’re waiting to close your Florida mortgage?

 

  • Don’t Change Jobs: If you get fired or laid off, that’s beyond your control. But this is not the time to go job hunting. Wait until after you close. Besides, you don’t want to try to get time off to move when you’ve just started a new job.
  • Don’t Open New Credit Accounts: Even if you don’t charge anything, every time your credit is checked by a lender, you could lose points from your credit score.
  • Don’t Close Any Credit Accounts: If you close an account, you will lose that available credit, and that could affect your debt ratio and hurt your credit score. It could also reduce the length of your credit history.
  • Don’t Max Out Your Credit Cards: This is not the time to go on a spending spree. Try to keep all your card balances below 30 percent of their available limits at all times. If you do decide to pay down cards, spread your money across all your cards to bring all the balances down equally.
  • Don’t Make Late Payments: A single late payment can knock points off your credit score.
  • Don’t Buy or Lease a New Car: Again, if your car dies, you may not have a choice. But try to avoid any large purchases or new financing.
  • Don’t Make Large Deposits into Your Accounts or Accept Large Cash Gifts: If you’re getting help from family, you need to follow your lender’s procedures to document it.

 

A good rule of thumb is to check with your mortgage lender before you do anything that will affect your credit score. Your Florida mortgage professional can help keep you from making a mistake that could delay or even revoke your loan. At Embrace Home Loans, we are happy to work with you to help make sure your closing doesn’t get off track. Please call us at 407-733-6425, or contact us online.

Lower Your Rate with a VA Streamline Refinance

If you’re an eligible veteran, mortgage loans guaranteed by the US Department of Veterans Affairs (VA) can be a great deal. These mortgages are available to veterans with good credit, sufficient income, and have met certain military service requirements. Some spouses of eligible veterans may also be able to take advantage of these loans. You’ll need a Certificate of Eligibility (COE), available through your local VA office.

The biggest advantage of a Brevard County VA mortgage is that the borrower can buy a home with no money down. In addition, VA loans usually offer very attractive interest rates and do not require private mortgage insurance (PMI), which saves even more money.

Fast and Easy Refinancing

VA loans have another very useful benefit. If you’re currently holding a VA mortgage and want to take advantage of lower interest rates, or if you have an adjustable-rate mortgage (ARM) and want to switch to a fixed-rate mortgage, you can refinance your existing loan using the VA Interest Rate Reduction Refinance Loan (IRRRL). These are also called VA Streamline Refinance loans because they’re easy to use and can close quickly. There are some conditions you have to meet:

  • You need to be current on your payments with no more than one late payment in the last year.
  • Your new payment must be lower than your current payment unless you’re switching from an ARM to a fixed-rate mortgage.
  • Unlike a regular VA loan, you don’t have to occupy the house, but you do have to certify that you previously occupied it.
  • You don’t need an appraisal.
  • You can avoid out-of-pocket costs by financing them into the new loan.
  • You may not receive any cash from the IRRRL.
  • You must have used your VA eligibility to obtain the loan you plan to refinance (often called VA to VA refinance).

Save Money

In some cases, eligible veterans may be able to save thousands of dollars over the lives of their loans by using streamlined refinancing. And refinancing can be done quickly, sometimes in as little as a month. Terms do vary between approved VA lenders, so it’s important to shop around to make sure you’re getting the best rates. At Embrace Home Loans, we’re experts in Brevard County VA mortgages, and we will work with you to make sure you get refinancing that meets your needs and budget. If you think a VA streamline refinance can help you save money, call us at 407-733-6425.

Using Part-Time Income to Qualify for a VA Loan

One of the many nice features of loans guaranteed by the Department of Veteran’s Affairs (VA) is that VA-approved lenders will generally consider your total financial picture when you’re trying to qualify for a loan, rather than simply following specific rules or a checklist. That means that people with military backgrounds who eligible for VA mortgages may be able to qualify using part-time income.

Be consistent

Consistency is the key to using part-time income (or overtime, commission, or self-employment income) to qualify for a VA mortgage. Your VA-approved lender will want to see that your income has been consistent and is likely to continue into the future.

Generally speaking, a two-year history is sufficient to prove your income is reliable. The lender will probably average your income when deciding whether or not you’ll qualify.

Ideally, your two-year history should be with a single employer, but some lenders may be willing to consider employment from several employers. If you don’t have a two-year history, you may be able to compensate for that by making a down payment, having a significant financial reserve, or demonstrating a low debt-to-income (DTI) ratio.

The consistency guideline means that borrowers who take a second part-time job, or volunteer for overtime, to qualify for a VA loan may be disappointed. Just picking up extra income for a few months won’t help qualify for a VA loan. Without history, your lender probably won’t consider that income when considering your loan application.

Shop around

It’s important to remember that policies and guidelines vary from lender to lender, so it’s worth your time to talk to more than one. At Embrace Home Loans, we’re experts in VA lending, and we can help you understand what your income requirements may be and how part-time income can help you qualify for a VA loan. Call us at 407-733-6425 for more information about part-time incomes and VA mortgages.