Orlando Mortgage Blog

A typical home shopper will probably use the expertise of a local realtor® in their home search, who in turn will recommend a loan rep they know to get you started, so they can begin to show properties within the customer's means. This is a good start.

Here are a few tips that can likely save you thousands at the closing table:

  • You don't have to wait until you're ready to start home shopping to prequalify. In fact, I recommend anyone thinking of buying in the near future do a little serious price shopping before deciding on who to prequalify them. Why waste the time if you wouldn't use them anyway? It's easy to shop mortgage rates and costs online today. Using a local loan rep who knows your market is highly recommended. Know your credit score? You can shop quotes without anyone pulling your credit.
  • Conforming conventional and government loans are the standard everywhere. It really comes down to two important factors. Your comfort in working with a given loan person and the rate and bottom line price they offer you. Though most people believe mortgage pricing is the same everywhere. IT'S NOT.
  • A 4.00% rate is a 4.00% rate everywhere. What's the difference? It's the points, rebates and closing costs offered that vary so much. Shop the bottom line cost on the loan. For example, most loan reps today will give you a rate quote that earns the house at least 2.00% to 3.00% (points) of the loan balance to cover the company overhead and their sales fee. On a $200,000 loan that's $4,000 to $6,000 to do your loan. You may not see "points" since you are offered a higher rate that covers it. The rate needs to be 0.25% to 0.50% higher or more to do so. But, my business plan and low overhead has allowed me to change the playing field for 25 years. How? I pass on more of the available lender rebates instead of keeping them myself. That could save $2,000 to $4,000 in costs through the increased rebate to your closing costs, a better rate or both that the savings buys you.  You didn't know there was this much difference did you, especially on the zero closing costs quotes offered everywhere today? Zero costs, but at what interest rate?
  • Your realtor will likely recommend you to a loan rep they trust. You should contact them. Now request their price estimate at this point to then comparison shop who you actually want to handle your loan. But you did your homework and have all your facts at hand to compare . You're not rushed last minute with a contract pending. You've taken back control and should end up with a closed loan to brag about.
  • Resale and new construction seller paid costs. Here in the Central Florida area on a resale the seller will typically agree to pay standard and customary costs for you such as the Owner's Title policy, doc stamp taxes to transfer the deed and a title search, though it may vary slightly depending on markets around the state and could easily be +/- $3,000. Builder offerings on new construction can also vary. Some builders require that you only use their approved lenders for your financing, but offer various sales incentives if you do so, but take them away if you use your own lender. Of course, any builder incentives are already rolled into their sales price, but wanting to control the process, it may lock your decision. Don't expect the builder loan pricing to compare to an outside source, but the incentives may keep you in their deal on balance. Some builders will pay some of your standard and customary costs and still allow you to shop your financing elsewhere. Lastly, some builders pay nothing towards your costs and allow you to place your financing anywhere. Ask up front in writing what your builder's offer entails and then compare.
  • Finally, don't wait till the last minute. Once a contract offer is accepted you will normally only be given around 5 days to make application for your financing. Most buyers who have failed to shop to this point and most do, never compare pricing and simply go with whoever was recommended, possibly missing thousands at closing. You can still shop now, but why put yourself in a crunch? You work too hard for your money. Shop early. It's worth it! I've proved it for 25 years.

Posted in:General
Posted by BILL WILBANKS on April 26th, 2019 12:56 PM

Have you ever thought of owning your own get away place? Can you see yourself looking over the water from your very own second home or condo? Or your own special gathering place to spend time with family and friends. Wherever your special Florida place might be, do something to get there. It can't happen unless you make it happen.

To start, making a few plans is easier with a few facts. Unless you are able to pay cash, you will need mortgage financing to complete the purchase. Ok, by definition, you need to spend at least two weeks a year in occupancy to qualify for second home status. Though you cannot use rental income on a second home to mortgage qualify, you can rent it out from time to time during the year. A lender will analyze the location and usually expect it to be at least 50 miles away from your residence, and you will need to show a reasonable ability to use it for that purpose due to location and the ability of the buyer to financially utilize it.

Unlike investment property loans, mortgage pricing is exactly the same as if you are financing a home. Conventional financing will be your ticket to success. One-unit Single Family homes and Townhomes can be financed with a little as 10% down. Existing project condo purchases can be made with 20% to 25% down upon project approval. Whether you live in the Central Florida area and would love to recreate near one of Florida's many coastal communities or find your special place away from the ever growing I-4 hustle and bustle, we want to help you accomplish it today.

Here's a thought, many folks a few years away from retirement have the foresight to pull equity out of their present home rather than dip into their savings to make the down payment on the second home now and use it as a get away for a few years until they sell the current home and transition to the second home permanently. You may even decide to sell it, payoff or reduce the balance on the second home with your home sale proceeds at that time. By doing so, you can enjoy the property now, lock into today's real estate pricing and historically low rates, and realize years of equity appreciation by buying today. But, you could if you to plan ahead folks. That's where we can help you today.

I'd love to hear your second home goals. Why not get prequalified today? Call me!

Bill Wilbanks

Posted in:General
Posted by BILL WILBANKS on April 4th, 2019 12:40 PM

For those that haven't been paying attention of late, rates have been heading south this month thanks to various factors like last weeks Fed statement that they were done raising rates this year in all likelihood and the shaky world economic condition. In fact, in the last two weeks alone they've gone down by 0.25% to 0.375% depending on the option. The US10yr yield has fallen to 2.35% which we haven't seen in 14 months...yes 2017. Will they continue? Too early to say. But I actually quoted a customer a 95% LTV 30 year fixed rate this morning at 3.75% rate and APR with zero points and zero lender fees! Standard PMI would additionally be required and have an effect on the APR of course. Try to beat that one! Anybody?

Bill Wilbanks

Posted in:General
Posted by BILL WILBANKS on March 27th, 2019 2:09 PM

NAR, The National Association of Realtors, just published their most recent national survey asking the key question "Is it  good time to buy?".  Apparently it's a very good time to buy and sell. Here's the link to the report: https://www.nar.realtor/.../visual-story-home-survey...

After this last week of plummeting rates, buyers may find the best buying season seen in years. So, let me pre-qualify you today so you can get in front of the early season shoppers! And with 30 year fixed rates that dropped to the lowest levels in 14 months on Friday, make my loan estimate your cornerstone quote that you can try to beat, but I expect to save my borrowers thousands at closing. Let me prove it.

Posted in:General
Posted by BILL WILBANKS on March 23rd, 2019 12:23 PM

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
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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 and what the final loan amount offered will be! 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
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