Orlando Mortgage Blog

WOW! The FOMC just came out of their two day meeting today stating no more rate hikes are likely for the rest of the year. The 10 year benchmark note rate dropped to 2.539% at the time of this post. Already seeing lenders post slightly lower point quotes immediately. As benchmark Treasury yields fall, prices of mortgage-backed securities move higher, which allows lenders to offer lower mortgage rates. The inverse is also true.

This is great news for the upcoming home buying season.

Bill Wilbanks

Posted in:General
Posted by BILL WILBANKS on March 20th, 2019 2:34 PM

Hey folks....it's a chilly and rainy grey day today in Central Flrida, but the weekend is coming. So what better time to finally kick those major home renovation projects you've been planning all winter into full gear by getting a refinance application going with us right now, or get prequalified online today so you're ready to go house hunting when the next sunny day gets you in the mood? Get way ahead of the spring crowd. Don't keep putting it off. It's really a very simple project. Your first step is getting your financing out of the way. Put it on top of your Honey-Do list today. Don't wait until the spring fever crowd gets going. Get in front of the line by calling me today for your best pricing and hands-on professional service.

Bill Wilbanks

Posted in:General
Posted by BILL WILBANKS on March 19th, 2019 2:38 PM

How many of you have heard "You need 20% down to buy a home"? Simply stated, that's total bull, so keep reading! Most first time buyers may see that as an insurmountable wall to attain. A $200,000 purchase would require $40,000 to be saved. While you try to do it, current rents, home prices and interest rates are going up making that 20% mark a moving target. The rationale for the 20% recommendation they tell you is to avoid mortgage insurance (PMI). What savvy buyers know is that buying with 5% down on a conventional loan even with PMI is the typical way most buyers become homeowners.  By buying now with 5% down in this example, you are able to enjoy the benefits of home ownership like appreciation of it's value to name one, with it's many advantages now even with PMI. 

Now for the good news you may not know. For loans made after July 1999, lenders are required by federal law to automatically cancel Private Mortgage Insurance (PMI) when the loan balance falls below 78 percent of your purchase price — not when you achieve 22 percent equity, which will happen much more quickly with rising property values. (Certain "higher risk" loans are excluded.) But you have the right to cancel PMI (for loans made after July 1999) once your equity reaches 20 percent of value, regardless of the original price.            

Keep track of your principal payments.  Also keep track of what other homes are selling for in your neighborhood.  If your loan is under five years old, chances are you haven't paid down much principal — it's been mostly interest.  Property values in many parts of the country have risen considerably in the last 5 to 6 years.  And that could have earned you 20 percent equity even if you hadn't paid down much principal. If you put 5% down at purchase, and if you assume an appreciation rate of only 3% along with the normal 30 year loan amortization you could expect to reach that 20% equity level after purchase in 6 years. Your rate of appreciation can be more or less of course.

When you think you've reached 20 percent equity in your home, you can begin the process of freeing yourself from PMI payments!  You will need to notify your mortgage lender that you want to cancel PMI payments and they will advise you of their specific requirements. You will certainly need to verify that you have at least 20 percent equity, that you have paid your payments on time and that values are not declining in the area. They will let you know their value determination process. Be sure to check with them before spending your time or money. 

Posted in:General
Posted by BILL WILBANKS on March 11th, 2019 12:36 PM

Most people who fail to mortgage shop never know how much they could have saved if only they took a little time to comparison shop.

Here's an actual example from last week of why borrowers should shop around before they apply and lock a rate. This happened to a customer that didn't shop. They had already applied and locked a rate with a builders mortgage company less than 30 days from when they needed to close and renegotiated the rate down by 0.125% from 4.875% locked previously to 4.75%, but offered no rebate to the buyers costs. The builder was not assisting with any costs for the buyer and allowed them to go anywhere for the mortgage. They didn't shop around. The buyer made a last minute call to me after seeing my weekly Friday/Sunday Orlando Sentinel ad found in the Homes section. They needed to close in just two weeks, but decided to compare pricing at this late stage. I showed them, that at the same rate they re-locked only a couple days before, we offered the same rates but, and this was the surprise to them, I was offering it with a rebate of 3.00% points to their costs. But unfortunately, they were out of time now. The loan they needed was for $230,000. So they could have had a $6,900 rebate to their costs that the builder nor their mortgage company offered. They lost a great deal and I lost a great customer.

New home, resale or refinance...shop price. I never like telling borrowers what they could have saved at closing.

Posted in:General
Posted by BILL WILBANKS on March 4th, 2019 11:34 AM
It's been a roller coaster week on the 10yr Treasury, a major driver of mortgage rates. On Tuesday it opened with a nice dip at 2.645% and most lenders posted rates that fell to the lowest level seen in months at that point. Wednesday opened at 2.632%. Thursday it open up at 2.715% and this morning opened even higher at 2.744%. That appears to represent a worsening points swing of about 0.50% since Tuesday's lows depending on the lender or appears to have bumped the rate back up to previous weeks levels by approximately 0.25%. Hope you were able to take advantage of it folks. But to put it into perspective a 0.25% rate bump only increases a 30 year payment by $14.52 per $100,000 financed. Though nice to save if you can, it's not likely to impact a buyer decision on a major home purchase decision.
Posted in:General
Posted by BILL WILBANKS on March 1st, 2019 10:38 AM

I still speak with callers all the time that believe all mortgage pricing is basically the same no matter the lender, so why shop around. That couldn't be more incorrect.

Basic closing costs will be similar for title closing agents, third party service providers such as surveyors, and local and state mortgage related taxes. Where is the difference?

Everyone offers the same rates. But, if you price shop at all, you'll quickly see the real differences in quotes relate to lender fees and the amount of "Rebate" the lender passes on to you to offset your loan costs or how many discount points they charge to buy down to a lower rate. It can be thousands! Rebates are real money.

Here's how it works, the higher the rate a lender offers you, the higher the Rebate will be to offset your costs or that they can keep in their pocket. All you may see is a lower rebate given to you and they retain the difference. If you don't compare rebates you won't know what you aren't getting. So using the same rate for comparison, it usually comes down to how much of the rebate the lender passes along to you or keeps in their pocket. Our Rebates are our price advantage....compare Rebates!

The only way you can truly compare what is being offered is to request quotes at the same rate, the same day, on the same loan details. Then compare bottom line numbers, I.E.: What is the final loan amount on all quotes, telling you how much in loan costs is getting rolled in the new loan and bumping up your payment or reducing your proceeds if cashing out, how much money do you have to bring to closing or more important...how much rebate is being offered you to offset your costs at closing and therefore impacting all the above. The less rebate passed on to you in the deal, the more it costs you folks. As often as not, you won't see origination point charges because it's buried in the rebate offered to you (not passed along). So...compare rebates against your total cost! It's all about the bottom line!

I have a real rebate edge daily. Request my estimate now...SURPRISE YOURSELF!

Posted in:General
Posted by BILL WILBANKS on February 24th, 2019 10:45 AM

Did you buy a home in 2018 and took residence as of or before January 1, 2019? If so, remember to apply for the Florida homestead exemption by March 1, 2019 to receive a deduction of $25,000 of your property's assessed value. It can save you hundreds.                                                                                  
You may apply through the mail or online. Yearly thereafter a notice is mailed to your homestead address yearly for renewal. You can contact the county property appraiser's office or tax collector if you have additional questions.

Bill Wilbanks                           

Posted in:General
Posted by BILL WILBANKS on February 7th, 2019 1:48 PM

The sunshine state has more condominiums than many other states combined. We offer lender financing under the three FNMA categories for condos as shown below.

Limited Project Review (For Established Projects)
Primary Residences to 75% LTV
Second Homes to 70% LTV
Investment Property to 70% LTV

Full Project Review (For Established Projects)

Primary Residences to 90% LTV

Second Home to 75% LTV

Investment Property to 75% LTV
 
Full Project Review - FNMA New or Recently Converted Florida Condos (Must be able to certify a 1028/PERS approval exists)

Primary Residences to 95% LTV
Second Homes to 90% LTV
Investor to 85% LTV

The Limited vs. Full Condo review (Established Projects) is a matter of a little more paperwork documentation to complete the approval process for the higher LTV you might need. Give us a call today for a more in-depth breakdown of program specifics. We can work with the condo association or their management office for you to get whatever you need to get it done.

Hey Florida! We want your condomium business. Now's the time to buy a home or that vacation unit on the beachside...Get ready for summer!

Posted in:General
Posted by BILL WILBANKS on January 29th, 2019 2:30 PM

The typical buyer I speak with has already spoken with someone their Realtor® suggests.

Realtors® naturally like to work with someone they work with regularly, wanting to maintain as much control of the buying process as they can. They want to move their buyers quickly through to a successful closing. But your loan pricing is not their first priority. If you were referred to them, a mortgage rep might feel less inclined to offer their best financing price. They know you are less likely to shop around once referred and you're likely to simply apply with whoever the Realtor® recommends. Sadly, most buyers do fail to shop further than that referral contact! They'll never know how much they could have saved at the closing table and for years thereafter.  

Do a little shopping and you'll soon find rates, closing costs and rebates to your closing costs are all over the map. Please, call that loan rep, your bank, credit union, and any TV ad. Call me, I love making hard comparisons. I'm so confident in my pricing I even ask you to get mine first, then shop trying to beat it where you will. Satisfy yourself. You'll love it!

What differences will you find? The rate and what amount the lender keeps or passes on to you in the form of closing cost rebates. How much money do you really want to bring to closing? It's all about the lender rebates today!

Buying or refinancing, it's easy to shop pricing online. It's Fast, Free and Private!

The worst that can happen is you realize you saved some serious money!

Give me a call. I love hearing the surprise in a caller's voice when they shop me. 

Bill Wilbanks

 

Posted in:General
Posted by BILL WILBANKS on January 23rd, 2019 1:49 PM

Let's set the facts straight about mortgage ads today that say "We Pay Your Closing Costs". Actually you still pay them, but in a different way. This is accomplished by offering you an interest rate "Buy-Up". If you take a higher rate the lender is able to offer you a Rebate Credit to your closing costs. The higher the rate, the higher the rebate. These offers can and do vary by thousands of dollars from one lender to another. That's the real price difference one company to another and that's where our pricing excelsl!

Zero Closing Cost ads get your attention. A borrower can take a lower rate a lender offers and pay their own closing costs at closing on a purchase or refinance, or roll them in the new loan on a refinance using available equity. But, you can choose to take a higher interest rate and have a lender make a credit towards some or all of the closing costs and prepaids. Compare quotes at the same rate, the higher the rebate, the better the deal for you. Either way, a borrower is paying them either out-of-pocket, equity or by taking a higher rate. Once again, it's all about the rebate amount you're offered.

Here are a couple examples of why you might choose one over the other:

  • If you anticipate paying the loan off in a short period of time, say 3 to 7 years, then taking a higher rate and having the lender rebate credit pay some or all of your costs on the loan may be your better deal. Why, because let's say you took the higher rate and the lender credits 2% of your loan amount to your costs on a $200,000 mortgage. That would be $4,000 paid toward your costs. Even if you would be getting a rate let's say 0.50% higher than the basement level and lower payment the lower rate option gives you, you could not possibly equal $4,000 in payment savings over that period so you'd be ahead of the game using the buy-up in this situation with less money paid in the loan overall at early payoff. 
  • If you expect to be in the home a longer period of time like 7 to 10 years or longer then the lower rate and therefore payment would at some point exceed the amount of the additional lender credit in the previous example and you would save at the lower monthly payment level for the remaining life of the loan.

I'd be happy to review these options for you to help you make an informed comparison. We all have the same interest rates. You'll soon see, we don't all offer the same rebates. That's why it is so very important that you make detailed head-to-head comparisons.

The difference between quotes is not rate. It's the Rebate they keep or pass along!

Bill Wilbanks

Posted in:General
Posted by BILL WILBANKS on January 22nd, 2019 1:48 PM

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