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Frequently Asked Questions

 

Mortgage Rates

Yes.  Home equity loan rates are most often tied to the prime rate and depending on market conditions can be lower or higher than 30 year fixed mortgage rates.  Also, home equity loan rates are typically adjustable rates that fluctuate monthly.  If you are looking for home equity loan rates that are fixed, chances are that the rate will always be higher than a traditional first lien fixed mortgage.  When it comes to home equity loans, your best bet is to deal directly with a local bank as they offer the best no closing cost options for consumers that also bank with them.

Shahram Sondi   July 2, 2016  


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No. Mortgage brokers receive wholesale home financing interest rates and thus result in passing on the savings to you as a first time home buyer. The concept is simple: Mortgage brokers have lower wholesale rates and banks are prices higher because they are retail with higher overheads/costs. That being said, it is still important that you shop with multiple local mortgage brokers to obtain the best home financing rates.

Shahram Sondi   July 2, 2016  


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No. Jumbo mortgage rates are typically higher than a Fannie Mae traditional mortgage rate.  The primary reason for the increase in rate for a jumbo loan is the size of the loan and thus, results in higher risk exposure for the mortgage lender.  For example, the bank has less risk when they spread $1,000,000 over five loans than they do offering a single million-dollar loan. Simply put, it's just like the risk associated with putting all your eggs in one basket. As a result, the higher the risk the bank takes, the higher the rate.

Lastly, not all jumbo lenders are equal. Some mortgage companies keep their primary focus on jumbo loans and thus price themselves more aggressive than national banks.

Shahram Sondi   July 2, 2016  


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Mortgage refinance rates are pretty close to purchase mortgage rates.  Although there are times that mortgage companies will offer pricing specials for people getting a mortgage to purchase a home. The only time that you will find the refinance rates to be significantly higher than purchase mortgage rates is if you are looking at a debt-consolidation mortgage loan or a cash-out refinance loan. If you are looking at a straight rate/term refinance the rates are going to be close.

Shahram Sondi   July 2, 2016  


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Second-home rates are slightly higher than owner-occupied rates.  However, the required down-payment for second homes is higher and directly affect the interest rates you are offered.  The higher the down-payment the lower your second home mortgage rate.  If you are researching for best rates online, know that FHA loans are not qualified for purchasing a second home. So, be sure to look for conventional rates online and not FHA rates.

To get the best second home mortgage rates you would need to put at least 20% down-payment and have a minimum credit score of 760.

Shahram Sondi   July 2, 2016  


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No. First time home buyers receive the same mortgage rates as someone that previously owned a home.  Mortgage rates for first time home buyers vary depending on credit and percentage of down-payment.  The better the credit score typically results in lower mortgage rates.

First time home buyers are often advised by housing counselors to work with a local mortgage broker due to the personal attention and accessibility to multiple home financing programs.  Most importantly, first time home buyers need to remember that mortgage rates fluctuate daily. So, when shopping for mortgage rates and from the time you are prequalified to the time you find a home to buy, the rates could have gone up by 1% or more and thus result in higher mortgage payments than initially budgeted for.

Shahram Sondi   July 2, 2016  


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Home mortgage rates vary from state to state.  For instance, certain states receive incentives from the government to make home ownership more affordable and thus provide lower rates.  On the other hand, jumbo home mortgage rates in states such as California with higher home values are lower than states like Florida where the average home price is almost a third of California. Another great example is home mortgage rates for HARP loans.  Depending how hard your state was affected during the housing crash, states like Florida give borrowers an extra credit toward the mortgage rates for homes that are underwater.

Shahram Sondi   July 2, 2016  


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In my opinion, it has nothing to do with getting the best mortgage rates.  When consumers are searching the internet to learn about current mortgage rates, they should be more specific on what type of mortgage rates they are shopping for.  For instance, if you are looking for interest rates for purchasing an investment property in Florida, you shouldn’t Google the term “bank rate” or “bank rates”.  You should instead search for the specific term like “lowest investment property mortgage rates in Florida”.  This helps narrow down your search and receive the best search results from Google.  You can take your search for best mortgage rates even further by including the city that you plan on buying the investment property in; as this helps you contact a local mortgage broker that has a better understanding of your area.

Shahram Sondi   July 2, 2016  


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To the get the most accurate mortgage interest rates today you will need to speak directly with a mortgage broker or a bank/lender loan originator.  This is the only way because all the rates you see online are general and do not take into account the specifics of your scenario.

For instance, most online mortgage rates assume the best possible case scenario when displaying their interest rates. By speaking directly with a mortgage originator, they will be required by law to provide you an accurate good faith estimate with a good through rate lock period.  As a result, it help to shop and compare the good faith estimate of at least three different mortgage companies on the same day to determine what really is the best mortgage interest rates today.

Shahram Sondi   July 2, 2016  


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Whether to refinance your mortgage or not all depends on your short term and long term goals.  For instance, the general rule of at least 1% to 2% reduction compared to your current mortgage rate is irrelevant if you are switching from a 30 year fixed to a 15 year fixed mortgage since you will have significant savings in reducing the term of the mortgage regardless of the rate.

However, if you are refinancing and staying in a 30 year fixed mortgage then the easiest calculation would be how much are the closing costs associated with the refinance and how fast will you recuperate the costs associated with the refinancing.  Generally, if you can recover the costs within 2 to 3 years then it makes sense as long as you plan on staying in the home long term.

There are so many different angles to look at when refinancing your mortgage and the best advise I can provide you is, take your time and work with a local mortgage broker or originator that will take the time and help you explore all the pros and cons of refinancing your mortgage.

You need to take a financial planners approach in what best fits your particular situation.

Shahram Sondi   July 21, 2016  


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Whether to pay discount points or not depends on your long term goals for the mortgage that you are obtaining.  For instance, if you are planning on retiring and living on a fix income then you might benefit from having a lower monthly payment by paying discount points.  However, most consumers do not keep a mortgage for the entire term and thus, end up wasting their money due to the time it takes to recuperate the cost associated with paying discount points.  A good rule of thumb is to determine if the monthly savings associated with points can be recuperated within a three year time frame.

Shahram Sondi   January 4, 2017  


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Home financing programs in Florida range from FHA loans, VA loans, USDA loans,Jumbo loans and conventional loans. The minimum qualifying requirements vary from mortgage lender to lender depending on your credit profile and income. Depending on your income level, some first time home buyers also have the ability to take advantage of the Florida down payment assistance programs in combination with the above mentioned home financing programs to secure a home for their families.

Shahram Sondi   July 2, 2016  


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Determining what is a good interest rate on a home loan depends on your credit scores and whether or not you want the loan with the lowest closing costs or the lowest rate.  It is important to speak to a local mortgage broker that will take the time to analyze your short and long term goals for the home loan that you are applying for.  Typically, if you are planning on keeping a mortgage short term that it makes more sense to take an interest rate that has little or no closing costs associated with it.

Shahram Sondi   January 5, 2017  


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An amortization table only helps to determine how much of your monthly mortgage payment goes towards principal and interest each month based on the life of your loan.  To determine the true cost of your loan, you really need to look at the finance charge disclosed on the Truth-in-Lending disclosure statement provided to you by the mortgage company.

Remember, banks are not lending money for free and when you factor the time value of money/inflation over a 30 year mortgage, you are always going to pay a lot in finance charges so don’t freak out. The best use of an amortization table in my opinion is to determine what your loan balance will be at a particular year if you plan on selling your home.

Shahram Sondi   July 2, 2016  


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The APR on a mortgage is the true cost of a loan.  your mortgage payment is based on your note rate that is always lower that the APR.  For instance, if there are no discount points associated with a mortgage rate than the APR will be very close to the note rate.  However, if you are paying discount points than the gap between the note rate and the APR increases depending on the number of discount points or origination fees associated with the instant rate.  A lot of online advertisements focus consumers attention on the note rate rather than the APR.  Consumers should pay particular attention to the fine prints when shopping for the lowest APR/mortgage rates.

Shahram Sondi   January 5, 2017  


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Interest rates on home loans vary by loan type such as FHA loans, VA loans or conventional loans, credit scores, and whether it is a purchase transaction or to refinance with or without cash-out.  Rates change daily and depend on various closing cost options such as paying discount points or getting a no closing cost mortgage.  Typically, local mortgage brokers have the ability to undercut the big banks and online lenders by offering consumers with wholesale rates without charging origination fees.

Shahram Sondi   January 5, 2017  


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VA Loans

Must obtain a valid certificate of eligibility (COE) that meets minimum time and discharge status as per veteran business administration. In addition, the veteran must meet the credit and income qualifications set forth under VA loan guidelines. The chart on the following link at the U.S. Department of Veteran Affairs provides a more in-depth breakdown of eligibility requirements. http://www.benefits.va.gov/homeloans/purchaseco_eligibility.asp

Shahram Sondi   July 2, 2016  


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Minimum 580 credit score is required to qualify for a VA loan.

Shahram Sondi   September 15, 2016  


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Refinancing

To refinance without equity your mortgage loan must fall under the any one of these two scenarios:

  1. Your mortgage must be owned by Fannie Mae or Freddie Mac and had to have been sold to these two entities regardless of whom your current mortgage company is prior to May 2009. This allows you to take advantage of the HARP loan program to refinance with no equity under the making home affordable enhancements to conventional mortgages.
  2. Your mortgage must be an FHA loan or a VA loan to qualify under the no appraisal streamline program. FHA and VA allows homeowners to refinance with no equity regardless of when their mortgage was originated.

Shahram Sondi   July 2, 2016  


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No, you do not need a refinance calculator. Using a refinance calculator is not going to help with getting the lowest mortgage rates.  You need to first shop for the best mortgage rates today and then determine if there is enough savings to justify refinancing your mortgage.  A good rule for determining if the mortgage rate offered to you benefits you is to take the monthly savings in your new mortgage payment and look at how long it will take you to recuperate the closing costs associated the new lower mortgage rate.

Shahram Sondi   July 2, 2016  


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The rates do vary depending on whether you are refinancing your home to solely lower your mortgage rate or planning on cashing out to do home improvement or consolidate debt such as combining your first and second mortgage. Typically, the lowest refinance rates are for rate/term refinance loan where your only objective is to lower the term or the rate on your mortgage without taking any cash out. Lastly, Florida mortgage refinance rates also depend on the loan-to-value of your home. The higher the loan-to-value of your mortgage, the higher the interest rate.

Shahram Sondi   July 2, 2016  


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You can refinance your mortgage as many times as you'd like so long as there is a net tangible benefit from the refinance transaction.

Some mortgage lenders require that the refinance results in at least 5% lower mortgage payment than that of your current.  However, isn't recommended that you refinance your house multiple times if the cost associated with your refinance keeps on increasing your principal mortgage balance beyond a reasonable period of recoupment.

Typically, if you can lower your mortgage payment by 5% and recoup the closing costs within a couple of years, it may make sense for your to refinance your mortgage.

Shahram Sondi   July 2, 2016  


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Yes. You can refinance your mortgage with no closing costs but the interest rate is likely to be higher.  A no closing cost option typically results in you getting a higher mortgage rate as the banks absorbs the costs associated with your doc stamps and title charges.  Basically, what the mortgage company will do is offer you a higher rate in order to pay for your closing costs. Depending on what your long term goals are a no closing cost refinance might be a good options.  Here is a simple rule for determining if you should do a closing costs or no closing cost refinance.

  1. If you plan on selling your home within the next five years, you should shop for a limited or no closing cost refinance loan option;
  2. If you plan on keeping your mortgage for a long time, then you should really opt for the lowest mortgage rates with closing costs as this allows you to save more money over the life of your mortgage loans.

Shahram Sondi   July 2, 2016  


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Combining your first and second mortgage helps lower your total mortgage payment while proving you with the ease of having just one mortgage payment.  Since the rate on a second mortgage is typically higher than a first mortgage, it often results in a lower mortgage payment when you combine your first and second mortgage into a new first mortgage. Whether or not the mortgage company will allow you to combine the two will depend on the type of mortgage you are applying for.  For instance, FHA loans allow you to combine your first and second mortgage up to 97% of the value of your home.  However, conventional loans typically cap you at no more than 85% of the value of your home in order to refinance first and second mortgage into one loan.

Shahram Sondi   July 2, 2016  


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If you currently owe more on your home than the value of your property, then you mortgage is considered to be underwater.  Only way to refinance mortgage underwater properties is by taking advantage of the HARP program if your loan is owned by Fannie, Freddie, FHA or VA. Common misconception is that you can only refinance with your current lender or services.  Fact is you can refinance with a mortgage broker who typically results in lower rates and closing costs than dealing with large banks.  Instead of searching Google for the term “refinance mortgage underwater”, you should consider searching for the term “HARP loan rates in Florida or any other state that you reside in”.

Shahram Sondi   July 2, 2016  


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Home Financing Tips

No. Mortgage brokers receive wholesale home financing interest rates and thus result in passing on the savings to you as a first time home buyer. The concept is simple: Mortgage brokers have lower wholesale rates and banks are prices higher because they are retail with higher overheads/costs. That being said, it is still important that you shop with multiple local mortgage brokers to obtain the best home financing rates.

Shahram Sondi   July 2, 2016  


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A home financing calculator is pretty much the same regardless of which website you.  Numbers don’t lie.  Depending on the type of home financing you choose, you may need a calculator that estimates your monthly mortgage insurance also if you are putting less than 20% down payment or getting an FHA loan which has MI regardless of how much down payment you put.  Lastly, always remember to add property tax and home insurance payments when determining your home affordability.  If you are not sure how to do this, your best option is to contact a Florida mortgage broker to assist and guide you with your home financing needs.

Shahram Sondi   July 2, 2016  


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Home financing options are often limited based on you credit score.  The higher the credit score, the lower the home financing rates and lower the down payment requirements for first time home buyers.  Home financing options range from FHA loans, VA loans, Jumbo loans, USDA loans and traditional conventional loans.  Be aware that not every mortgage lender participates in the above home financing options and that using a mortgage broker typically results in being presented with more financing options. Also, depending on your credit score, if you have experienced a significant drop in the value of your current home, you may be able to refinance under the HARP loan program in Florida.

Shahram Sondi   July 2, 2016  


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Home financing rates fluctuate daily with the stock and bond market.  Rates sometimes change multiple times in a day.  To get the best home financing rates you need to shop with at least three mortgage lenders or mortgage broker on the same day.  A mortgage is like a car and prices vary from dealer to dealer. If you work with a small owner operated, well reputable mortgage broker, you will typically get the lowest home financing rates in Florida.  Even HUD, on their website provides information for first time home buyers and suggests that using a mortgage broker and shopping with multiple home financing companies will result in obtaining the best mortgage rates.

Shahram Sondi   July 2, 2016  


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Based on the current mortgage environment, typically FHA loans are the only option for home financing for bad credit borrowers.  This does not mean regardless of how bad your credit is that you will get a mortgage.  All this means is that if your credit does not meet the conforming guidelines then you may qualify for an FHA loan with for instance only requires a 580 credit score compared to conforming loans that require a minimum of 620 credit score.

Shahram Sondi   July 2, 2016  


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Documents needed for getting a mortgage are pretty straightforward.  Other than having satisfactory credit, the lenders typically care about your income and down-payment for buying a home or equity in your home if you are refinancing.  Thus, if you are buying a home, the lender will need thirty days worth of pay stubs, last two years W2s and tax returns, driver's license along with two months complete bank statements to verify assets being used for down-payment.

Shahram Sondi   January 4, 2017  


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There is no such thing as a “home financing center”.  A home financing center is nothing more than a mortgage broker or lender offering mortgage loan products to current or new homeowners.

Shahram Sondi   July 2, 2016  


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When it comes to home financing, poor credit does not necessarily mean bad credit.  Some Florida mortgage lenders consider a 700 credit score to be poor credit while others consider less than 640 score.  As a result, it is best to discuss your options with a local Florida mortgage broker who has access to more loan options through various mortgage lenders before you assume that you may not qualify or get the best home financing rates.

Shahram Sondi   July 2, 2016  


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In 2017, FHA mortgage limits have been increased.  The new base maximum FHA loan limit in most parts of Florida for a traditional mortgage is set at $275,665.00.  Essentially this means that for a borrower to be able to purchase a home with just 3.5% down-payment, the maximum purchase price can't exceed $285,663.21.  Borrowers looking at higher purchase prices, will have to seek conventional financing such as Fannie Mae or Agency loans.

FHA Mortgage Limits

Shahram Sondi   January 5, 2017  


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Jumbo Loans

Preferable a 720 but sometimes can get borrowers qualified with as low as a 620 credit score.

Shahram Sondi   September 15, 2016  


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Conventional Loans

Calculating PMI on a conventional mortgage is different than calculating it on an FHA loan.  The PMI on a conventional mortgage is tied to the credit score, loan amount and how much down payment you plan on putting into a home loan.  There are a handful of mortgage insurers in the country that most lenders use such as MGIC where you can just enter your information and it will provide you with the monthly PMI (https://www.mgic.com/ratefinder/).  If you are trying to determine the monthly PMI on a 30 year fixed FHA loan than a simple calculation would be loan amount times .85% and then divide it by twelve months.  There are conventional loans availble without monthly PMI and you can explore these options by contacting a local mortgage lender, broker or bank.

Shahram Sondi   January 5, 2017  


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Buying a Home

Calculating PMI on a conventional mortgage is different than calculating it on an FHA loan.  The PMI on a conventional mortgage is tied to the credit score, loan amount and how much down payment you plan on putting into a home loan.  There are a handful of mortgage insurers in the country that most lenders use such as MGIC where you can just enter your information and it will provide you with the monthly PMI (https://www.mgic.com/ratefinder/).  If you are trying to determine the monthly PMI on a 30 year fixed FHA loan than a simple calculation would be loan amount times .85% and then divide it by twelve months.  There are conventional loans availble without monthly PMI and you can explore these options by contacting a local mortgage lender, broker or bank.

Shahram Sondi   January 5, 2017  


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Documents needed for getting a mortgage are pretty straightforward.  Other than having satisfactory credit, the lenders typically care about your income and down-payment for buying a home or equity in your home if you are refinancing.  Thus, if you are buying a home, the lender will need thirty days worth of pay stubs, last two years W2s and tax returns, driver's license along with two months complete bank statements to verify assets being used for down-payment.

Shahram Sondi   January 4, 2017  


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The waiting periods for getting a mortgage after bankruptcy depends on the type of mortgage you will be applying for.  For instance, FHA mortgages require a two year waiting period for chapter 7 and chapter 13 but you may qualify one year after chapter 13 under manual underwriting guidelines.  On the other hand conventional mortgage require a four year waiting period after bankruptcy has been discharged.

Shahram Sondi   January 4, 2017  


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Refinance Mortgage

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