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#1 mistake when searching “Mortgage Rates Today”

#1 mistake when searching “Mortgage Rates Today”

The #1 mistake consumers make with the widely-searched term “mortgage rates today” is not knowing how to read the fine print and the multiple factors associated with determining accurate mortgage rates. The most deceptive advertised mortgage rates are either missing clear and conspicuous disclosures of the terms or have disclosures that require a very mortgage savvy person to understand.

For instance, some of the biggest online lenders advertise the lowest rate - but only based on very low loan-to-value and includes paying multiple discount points.  The fact is, most consumers don’t want to pay discount points. The cost associated with recuperating points with rates takes a long time to justify the benefits, and some people just don't have the money.  Another thing to consider is that mortgage rates today are subject to multiple criteria: Exact credit score, Loan amount, Loan-to-value, Purchase or refinance transaction, With and without cash out and Type of property.

Here are two categories of the type of companies that advertise mortgage rates to hook customers into completing an application (which eventually results in bait-and-switch tactics):

BIG Mortgage Lenders - The BIG online mortgage lenders with highly recognized names that sponsor the Superbowl and other major sporting events.  When it comes to lowest mortgage rates it’s not like a car dealership that gets better pricing based on volume. Pricing is purely based on overhead and cost of acquisition.  Often times, smaller mortgage brokers undercut these big lenders by a quarter to a half a percent when comparing same closing costs because they don’t have hundreds of employees or million-dollar advertising costs.

Lead generation websites with big brand names:  These websites are very deceptive and unregulated since they are not licensed mortgage companies and will do anything to get consumers to complete a form.  They will advertise 15 year mortgage rates or adjustable mortgage rates with the idea that consumers assume it's a 30 year fixed rate without any discount points. The truth in lending act clearly sets out guidelines mortgage lenders are supposed to follow when advertising rates to consumers.  However, these lead generation websites have zero understanding of the law and have only one goal in mind:  get consumers to complete an application so they can sell your information over and over which will result in you getting slammed with telemarketers.

Do yourself a favor and instead of searching “mortgage rates today”, search for the best local mortgage companies, mortgage lenders or mortgage brokers. Interview them and read their reviews.  Each local market has hundreds of mortgage companies and so there's no reason to try and get a mortgage from an out of state lender that's just a call center full of highly motivated sales people.  Just think about this: Would you invest money with a financial adviser over the phone, or would you rather deal with a local person that you can meet with face to face?

It's your financial future at stake, your social security number and your identity that you're sharing. Make sure you know where your information is going and who you're giving it to.

I’m Shahram Sondi (NMLS id: 186790), principal broker and president of Florida Home Funding, a Florida licensed mortgage broker. As a consumer advocate, I am constantly working to educate consumers on making good financial decisions. I have been serving the Central Florida market with experience and integrity since 2001. Tell me what you’re looking for, and we will personally present you with the lowest available mortgage rate today based on your desired mortgage type and term.

When it comes to getting a mortgage

you have more options than you think

First Time Home Buyer Florida Program Update

There is no magical way for a First time home buyer in Florida to get a mortgage loan to buy his/her first home.  You still have to meet the many criteria for a mortgage that will be securitized in the market and conform to the guidelines set forth by HUD and various regulatory agencies.  Typically, people associate first time home buyer loans with FHA loans. Thus, for the purpose of this first time home buyer update we will focus on providing potential Florida homeowners with qualification requirements pertaining to FHA loans.

Before we go into more detail, here is a simple way to look at how you qualify for a first time home buyer FHA loan:  You either make enough money to qualify for an FHA loan or you don’t.  You either have demonstrated credit worthiness or you haven’t.  It’s as simple as that!

First Time Home Buyer Florida Program FAQs

Here are some basic cost and qualification requirements for a first time home buyer in Florida:

  1. What is the minimum credit score for FHA loans? Although some Florida mortgage companies will go down to a 580 credit score, most lenders require a minimum of 620 credit score to approve an FHA loan.  Minimum FHA credit scores do not automatically qualify you for an FHA loan.  Most mortgage lenders also like to see 1-3 positive tradelines such as credit cards reported on your credit for a at least 12 months.  FHA does allow for nontraditional trade lines such as electric and cable but varies from lender to lender.
  2. How about bankruptcy or foreclosure? No bankruptcy in the last 2 years, no foreclosure, Deed in Lieu or Short Sale in the last 3 years from the date of your Florida mortgage loan application.  Simply put, if you have had a bankruptcy, it had to have been discharged over 2 years ago. A foreclosure had to be completed over 3 years ago from the time the deed transferred from your name to another.  Although there are talks about loosening up the foreclosure guidelines, for now you may want to use this timeline to be safe when evaluating your current circumstances.
  3. How much can you afford? Currently FHA in some cases allows all the way up to 55% debt-to-income ratio for loan income qualification purposes.  What this means is, your total monthly obligation cannot exceed 55% of your gross monthly income.  Preferably no one should want their monthly debt to be more than 41% but unfortunately certain homeowners try to push the envelope because they get emotionally attached to a home.
  4. What’s the minimum down payment for FHA loans? You need to put a minimum of 3.5% Down payment in excess of any closing costs or pre-paids.  This means, don’t assume that putting $7,000 down on a $200,000 home is all you need to become a first time home buyer.  You do have the option of asking the mortgage lender to give you credit from the rate towards closing costs in exchange for taking a higher rate if you have limited funds over the 3.5% down payment.  Some borrowers do qualify for Down Payment Assistant from government agencies which may also be an option.
  5. Can you get help with closing costs on an FHA loan? The seller can contribute up to 6% towards your closing costs but that cannot go toward the 3.5% down payment based on the purchase price of your desired home.  You may also search for a broker or a lender that will give you credit to cover all closing costs.  Here at Florida Home Funding, we always provide our first time home buyers with a no closing cost option.
  6. What’s the Maximum FHA loan amount you can get?  The maximum loan limits are set by your mortgage lender based on your income. In addition, the mortgage lender also has to take into account the Florida Maximum County loan limits set by HUD. For current FHA loan limits in Florida, visit  https://entp.hud.gov/idapp/html/hicostlook.cfm
  7. Do you have to pay anything extra on an FHA loan? All FHA loans have mortgage insurance added to your monthly mortgage payment.  FHA mortgage insurance currently is set to stay on your FHA loan for the life of the loan.  As an alternative, you may want to look at putting 3-5% down on a conventional mortgage, which does not result in lifetime mortgage insurance payments.  Lastly, FHA loans also come with a hefty upfront one-time mortgage insurance premium that is stacked on top of your principal loan amount.  The upfront mortgage insurance is 1.75% of your principal loan amount.

Contact a licensed Florida mortgage broker if you are looking for not only the best FHA loan rates in Florida but also if you would like a professional to sit with you, explain and lay out a successful long or short term strategy (based on HUD guidelines) to help you become a qualified first time home buyer in Florida.

TELL ME WHAT YOU’RE LOOKING FOR

Tell me your scenario and I'll present you with all your options.

When it comes to getting a mortgage

you have more options than you think

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    Sondi And Associates, Inc. dba Florida Home Funding. NMLS ID: 870878 Location: 390 N Orange Ave #2125, Orlando, FL 32801 | Phone: (407) 704-8729

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