Palm Beach Real Estate and Loans

This morning's post has been provided by Jason Price with Knightlines Mortgage Services.

Before the questions start... Jason did write this about Lake County, FL - but the good news is that this type of loan is available in a lot of areas in Florida, including western parts of Palm Beach County.

"That's right!  100% Financing still exists in Lake County, Florida.  Despite all the obituaries about these mortgage programs, there is still one program that remains alive and well.  This is all thanks to Lake County being USDA Grade A land... and I mean that literally.

The USDA 100% mortgage loans offer many benefits to potential home owners.  The biggest being no down payment.  Also, at the top of the list is the fact that there is no extra costs in your monthly payment in terms of mortgage insurance.  Eh, what the heck?  Here is a list of all the benefits a USDA loan has to offer:

1. No Down Payment.
2. If the appraised value comes in higher than the contract sales price, you can wrap closing costs into your loan.
3. No PMI (AKA Mortgage Insurance).
4. No Reserves.  This means you do not need to have lots of money in savings, as some banks require.
5. No Minimum FICO Score.  You must at least look creditworthy.
6. Available For First Time Buyers and Non-First Time Buyers.
7. Substitute Schooling/Education for Job History.
8. Unrestricted Gifts.  Gift money is not sourced or seasoned when used for closing costs."

You can read the rest of Jason's post HERE.

For answers to all of your Palm Beach Gardens mortgage questions - or anywhere in Florida - just call me at 561-282-7406.

Jason Price at Knightlines Mortgage Services, LLC provided today’s information:

When shopping for a mortgage for your Palm Beach Gardens real estate, one can easily become overwhelmed with all the different mortgage programs that are out there:

• Fixed Rates (FRM)
• Adjustable Rates (ARM)
• Hybrids, etc.

The problem that consumers face is “which mortgage is the best?” The answer to this is: the best mortgage program is that program that best suits the individual’s needs. But how does one know which is the best, if one is not up on all the different types of mortgages?

Well, let’s break mortgages down to their very basic levels: rate and term. Rate is the interest rate that one pays to bank. Rate is determined by risk. Term is the length of time that a loan is paid back. Term is also the length of time that the rate remains fixed (We will call this the rate term). The longer the rate term; the great the risk; the higher the rate.

Now, let’s assume that all mortgages are FRMs and paid back over a 30 year term. Why? Most everyone understands the concept of a 30 year FRM: the rate is fixed for 30 years and paid back over 30 years. So, what this means is the 6 month, 1 year, 3 year, 5 year, 7 year, and 10 years ARMs are now all FRMs and paid back over 30 years. The rate is fixed for that period of time which is mentioned.

Going back to our basics, the longer the term the higher the rate. The 6 month FRM has a lower rate than the 10 year FRM. So, why would one take one of these shorter terms versus a longer term? The answer is simple: they have a general idea as to their future (they plan to move, add on, build a pool, refinance to take cash out, etc). The reward for planning ahead: a lower interest rate.

Even if a person is uncertain of where they will be in the future, if they use statistics, they can get a lower rate. Statistics show that the average homeowner refinances every 3-5 years and sells around 7 years. Let’s say someone wants to be conservative on the 7 year figure, they can go for a 10 year FRM. They still will have a lower rate than that of the 30 year FRM. But, there are those still that do not even want to consider the risk of what happens after that 10^th year of the FRM. For them, the 30 year FRM is best.

Now that I opened the can of worms on “what happens after the rate term expires,” I will make a couple quick, simple answers. Assuming one misjudged their future expectations of their mortgage, they have a couple options.

1. Refinance and base the new mortgage on the new expectations
2. Refinance and jump start the expectations
3. Ride out the adjustments.

Ride out the adjustments?Yes, after the rate term has lapsed, the rate may/will adjust. Every lender has different ways of capping what your rate can change, but they all have the same calculation on determining what the rate will be: Margin + Index. Margin is a fixed amount. It is the amount the bank charges to put it simply. Index is an adjusting rate that is determined by market factors. Enough said on this.

When does one let it ride? Simple answer: rates have dropped. Think back a couple years when rates were at record lows. One could have been in a 3 year FRM that was about to adjust. Instead of refinancing, one could have seen a drastic drop in their rate just by letting their rate ride. Even with a fixed margin, rates dropped low enough for those individuals to enjoy a lower rate without the need to refinance.

So what is the best mortgage for you? The best mortgage is the FRM that has the rate term equal to your future goals timeline and the amount of risk you are willing to take.

Now, there are variations to these FRM programs, so please call Knightlines Mortgage Services, LLC today at 352-308-7219 to talk to one of our licensed mortgage professionals.

I don't know where it came from.......

But it seems like quite a few people have gotten the idea that the words "short sale" are the same as "bargain" when it comes to Palm Beach Gardens real estate.

NOPE.

Here is a short sale situation:

• the property owner gets behind on the mortgage payments
• the owner can not just sell the property and pay off the home loan because (for whatever reason) the balance due on the mortgage is higher then what the home could sell for. 
• so, the property is listed as a short sale
• all offers go to the bank that holds the mortgage
• when - and if - the bank gets an offer that they find acceptable, they will sell the home to that particular buyer
• at that point, the seller is off the hook with the bank - a much better result than foreclosure.

(Read this article for a more detailed explanation of the process--->>)

Here is why short sales are NOT a bargain for Buyers:

While the bank MIGHT take less then what they are actually owed, they are NOT going to accept a low-ball offer because the loss would just be too great - they would rather take the house and try selling it themselves.

It really is that simple.  So, you see a home listed as a short sale - the loan balance is $300,000 and you think "I'll offer them $190,000, they should be thrilled!".

Not only won't the bank be thrilled, they probably won't even respond.  They'll just keep waiting for bigger offers.

Don't forget, you're not dealing with the owner and what he or she will accept - with a short sale the BANK is in control and they don't just throw away money.

There are some REAL bargains to be had in Palm Beach Gardens real estate - call me.

Ah - it's that time of year again. Spring is here - we're all spending more time at the beach, working on that perfect tan......

And to make things really enjoyable, it's almost Income Tax time....

Oh joy (and many other things I really shouldn't write here).

But there's no way around it so make sure that you're prepared.

As an owner of Palm Beach Gardens real estate, there are a couple of deductions that you should be aware of:

1. We all pay Property Tax and you are able to deduct what you pay in a particular year on all of the properties that you own - primary, secondary AND even investment properties.
2. If you have a mortgage you can deduct the amount of interest you paid on the loans on two properties - your primary, of course, and one other.

Relatively simple things, but I talked to several people today who didn't know the specifics.  Why pay more then you have to?

Knightlines Mortgage Services, LLChas just opened it's new branch at 3309 Northlake Blvd, suite #203, in Palm Beach Gardens.

Considering all of the bad news that's been around lately - starting with the sub-prime disaster of last year - people might wonder how we can actually be expanding.

It's easy.  

We started up our main office with the intention of cutting through all of the BS in the mortgage industry.  Sounds like a lofty goal - but it's really not that difficult.  Over the last few (?) years, all of the hype, the ridiculous advertising and plain old-fashioned greed had gotten things to the point that a mortgage almost seemed like a mystical thing.

When you come right down to it, the entire mortgage loan process is pretty easy - ESPECIALLY on the residential side.

It didn't take us very long to settle on our motto:

"Financing the way it's SUPPOSED to be".

The term 'transparency' is thrown around quite a bit in the mortgage world  - a lot of companies spout it, but very few actually operate in a transparent manner.

This is what you can expect when using Knightlines:

• no guessing - you're always kept updated
• no surprises - especially not at the closing table
• we operate 7 days a week - things don't stop at 5:00 PM on Friday
• you will be fully educated on the loans that you qualify for so that you can choose what's best for you - we can make suggestions, but the final choice is yours
• we only advertise realistic loan terms - no 'bait' ads about loans so outrageous that nearly no one can qualify
• your Broker will be with you from the beginning all the way to the actual closing and that includes being AT the closing.