Harvey Collier - VP of Mortgage Lending Greater Fort Lauderdale FL

Fort Lauderdale Florida FHA Loans Make Home Ownership Easy

Whether you're a First-time Home Buyer or an experienced Home Buyer, Fort Lauderdale Florida FHA loans make home ownership easy and attainable. Fort Lauderdale Florida FHA loans provide borrowers more flexibility and ways to qualify than Conventional loans. Home Buyers can eliminate many of the obstacles they may face with more traditional mortgages.

Fort Lauderdale Florida FHA loans provide solutions to many of the most common barriers to home ownership, including credit issues, down payment and closing cost requirements, length of employment, debt-to-income ratios and property condition. Let's take a closer look at how FHA loans can make make buying and financing a home easier.

Credit Issues

Available for credit scores down to 620 - Although FHA doesn't have a minimum credit score requirement, most lenders require a 620 minimum credit score. Fort Lauderdale Florida FHA loans may be available with lower scores, but require extenuating circumstances that must be well documented (typically medical related).

FHA loans are more lenient regarding Collection and Charge-off accounts.
FHA loans have only a 2 year waiting period after bankruptcy to qualify for a mortgage.
FHA loans have only a 3 year waiting period after a short-sale or foreclosure to qualify for a mortgage.

Down Payment & Closing Costs

FHA loans only require a minimum 3.5% down payment to purchase a home.
FHA loans allow for 100% gift funds from family member for down payment of a home.
FHA loans allow for 100% gift funds from family member for closing costs & escrow requirements.
FHA loans allow for Seller to contribute up to 6% of sales price toward closing costs & escrow requirements.
FHA loans do not require any payment reserves after closing.

Employment

FHA loans may allow for shorter-time on the job history.
FHA loans may allow for one year self-employment job history.

Debt-to-Income Ratios

FHA loans allow for a higher debt-to-income ratio than other traditional mortgages.
FHA loans allow for a non-occupant Co-borrower to help qualify for a mortgage.
FHA loans allow for deferred Student loans not to be included in debt ratio if deferred for at least 12 months.
FHA loans allow a borrower with a current home to utilize rental income from property if retaining to help qualify even without prior history of owning and managing rental property.

Property Condition

FHA loans do not require property to have appliances in place to close.
FHA loans are available to rehabilitate, repair, upgrade or add-on to an existing property. These types of FHA loans are called FHA 203k loans and allow for the cost of the renovations to be financed into the mortgage.

As you can see, Fort Lauderdale FHA loans provide buyers every advantage to qualify for and obtain financing to purchase a home.

Harvey Collier - FHA Loan Consultant - Primary Residential Mortgage

There's a drone attack coming on mortgage interest rates that's flying under the real estate radar. Watch out, as this stealth action will increase interest rates very soon.

Just as mortgage interest rates hit all time lows, home buyers will be taken by surprise this month as recent Congressional action will increase interest rates. In an effort to pay for the Payroll Tax Reduction extension, Congress elected to raise the Guarantee Fee it charges Fannie Mae and Freddie Mac for all mortgage loans. This increase will be passed along to all lenders, which will result in higher interest rates for all borrowers.

This increase will take effect for lenders on all settlements that occur on or after April 1, 2012. This date will impact all loans being sold or delivered to Fannie Mae or Freddie Mac by lenders. In order to for a loan to meet this April settlement date, it will probably need to close by the end of February, allowing the lender enough time to package and deliver the loan to these agencies by the deadline.

Interest rates will be increasing almost immediately, depending on the lock period selected by the borrower. The first increase in interest rates will occur with 45 and 60 day lock periods, to allow enough time to process, close and deliver these loans prior to the April 1st deadline. Anticipate 30 day locks increasing by the end of January and 15 day locks by mid February.

We anticipate interest rates will increase between .125% and .25% in rate depending on the note rate of the loan.

Harvey Collier - Loan Consultant - Primary Residential Mortgage - Fort Lauderdale FL.

Planning to buy a new home and rent yours? It may make sense because you are unable to sell for a variety of reasons:

• Can't get what you want/need for your current home
• Need a larger home
• Need a smaller home
• Lifestyle Changes - condo to single-family, single family to condo
• Need/want to move for employment
• Need/want to move to assist elderly family

All of the above aren't really a problem if you own your current home free & clear and are planning to pay cash for your new purchase. However, if you have a mortgage on your current home and plan to get a mortgage on your new home and rent the old one, you may be in for a SURPRISE.

In these cases, qualifying for a new mortgage can be an issue for a buyer. Past lending guidelines allowed borrowers to utilize the rental income they would be receiving from their current home to qualify for the new mortgage. Due to the number of home owners walking away from under-water homes (houses that are worth less than the mortgage balance), guidelines have become much more stringent in this situation.

Recent guideline changes now require lenders to hold both mortgage payments (your current home and the new home) against the borrower's debt-to-income ratio without the benefit of the rental income. The only exception to this rule are borrowers that can demonstrate a prior history of having and maintaining investment property. To qualify the borrower must show rental property on Schedule E of their 1040 personal tax return in at least one of the prior two years. For many buyers, this can be a huge hurdle to overcome.

As a Florida Residential Investment Property Specialist, I've seen a growing trend of buyers receiving Pre-Approvals with the above circumstances, only to be turned down later for high debt-to-income ratios. Just as in sports, the best offense is a great defense.

DON'T get pre-approved at your bank where your Loan Officer was on the teller line last week.

DO get pre-approved by a Professional Home Loan Specialist with experience and commitment to your best interest.

If you are interested in learning more about the opportunities and challenges of buying and financing Florida residential investment property, you can request my new FREE Report, "Guide to Florida Investor Mortgages".

Harvey Collier

Florida Residential Investment Mortgage Specialist

Mortgage escrow account basics aren't always an easy concept for First-time Home Buyers to grasp. One of the most frequent questions I receive from first-time buyers is related to understanding how their mortgage escrow account will work and how much money they'll need to cover this at closing. Many buyers have no clue what you are talking about until you can show them a GFE with all the numbers broken down. So, here's my basic explanation that most clients seem to understand with the first explanation.

Mortgage escrow accounts are special accounts set up by the lender in which money is held to pay for property taxes, fire and hazard insurance, flood insurance, windstorm insurance and private mortgage insurance (if required - loans with less than 20% down payment). Mortgage Escrow accounts ensure that these items are paid in a timely fashion. They are a guarantee that there's always enough money to pay these bills when they are due, so the home owner and lender avoid the risk of lapsed insurance or unpaid property taxes.

With this guarantee, home owners don't have to worry about coming up with large sums of money, each at different due dates throughout the year. Unexpected increases are automatically taken care of by the lender. Mortgage companies typically cover shortages when tax or insurance payments increase. It's very common for lenders to pay the tax and insurance premiums when they are due even though there may be a shortage in the account and they haven't collected it yet from the home owner. When you don't have enough money in your escrow account to cover an increase, this leads to a shortgage in your account. The lender will notify you of this shortgage and generally give the home owner an option of paying the shortage in a lump sum, or spreading the shortgage out over the next 12 months.

Both options will result in an increase in your monthly payment. The latter option will result in a larger temporary increase in your monthly payment and will continue with a level increase afterwards. In this instance, you get hit with the proverbial "double whammy", as you are adding not only the new monthly increase 5to your mortgage escrow account, but additionally paying the shortgage as well. If you are refinancing your mortgage and have an escrow account shortgage, this will result in a higher payoff of your existing balance than you may be anticipating.

Mortgages have lower rates and down payments because of escrow accounts. Mortgage Escrow Accounts protect the interest of investors/lenders of home mortgage loans by making them more attractive and secure as an investment. Local governments save money by providing a more efficient, less expensive means of tax collection. In Florida, where the Counties offer a cash discount up to 4% for paying early, your mortgage company will pay and take the discount on your behalf.

Can I get a Fort Lauderdale mortgage after foreclosure or bankruptcy? This is a very common question I receive from Home Buyers and Sellers every week. It's certainly a sign of the times in Florida, with about half of mortgage holders being underwater on their homes.

It's a very difficult decision for those that have a choice about keeping their home that's worth half of what they paid and may take years to regain it's value. Many realize that they could be living in a house with equal amenities for half the price they paid and a much lower monthly payment. Those that aren't fortunate enough to have the staying power will not have a choice and unfortunately, will face foreclosure and perhaps bankruptcy as well.

There are a lot of misconceptions about the impact of a foreclosure, a short-sale, or bankruptcy when it comes to being able to get another Fort Lauderdale mortgage. Those misconceptions range from being able to get another Fort Lauderdale mortgage right away, to never being able to get another mortgage in your lifetime.

The good news is a potential Home Buyer can get a Fort Lauderdale mortgage again after a foreclosure or bankruptcy. Although the current mortgage guidelines differ for FHA Financing and traditional Fannie Mae Financing, both will offer qualified Home Buyers a home loan again.

A FHA Fort Lauderdale mortgage requires a borrower to be at least three years past a foreclosure date, while a bankruptcy requires two years from the discharge date. There are some short-sale exceptions being made that require extenuating circumstances to be documented and the payments on the mortgage must have been made on time for the twelve months prior to the short-sale. In these cases, it may be posssible to obtain another Fort Lauderdale mortgage right away.

A Fannie Mae Fort Lauderdale mortgage requires a four year waiting period for a foreclosure or bankruptcy. Fannie Mae's current version of it's Automating Underwriting System (Desktop Originator) can grant some two year extenuating circumstances relief for short-sale transactions meeting the FHA criteria above.

If you've been an unfortunate victim of the current financial and housing crisis, that included a foreclosure, short-sale or bankruptcy, it will be possible to obtain a Fort Lauderdale mortgage again in the future. Your ability to re-establish and maintain your credit will be the key to answering, "Can I get a Fort Lauderdale mortgage after a foreclosure or bankruptcy?"