Orlando Florida Real Estate Resource

Taming the Jumbo Mortgage in the Orlando Florida Real Estate Market

Everyone knows the jumbo loan market has been out of whack for nearly 18 months. "Jumbo" loans, those amounting to more than $417,000, took it on the chin, especially in Orlando Florida's real estate market, when mortgage investors stopped buying subprime and alternative loans. For that reason, jumbo rates can be as much as 1.50 percent higher than conforming rates. Historically, jumbo rates were only about a quarter of a percent higher than a conforming rate, but this new spread has kept many out of the Orlando Florida housing market: especially those that we refer to as, "just jumbo."

So what exactly is "just jumbo?" It's a loan amount that just exceeds the conforming limit of $417,000 and typically reflects a sales price in the $500,000­­-$600,000 range. The Orlando Florida Real Estate market offers many homes in this price category, but the marked difference in rate from conforming to jumbo is slowing down Orlando's real estate sales. What is the difference in payment between a conforming loan at 6 percent and a jumbo loan at 7.50 percent? On a $500,000 jumbo loan, mortgage payments jump from $2,997 to $3,496 a month. That's almost $500 more!

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Do You Know How To Avoid Costly Delays When Getting A Loan For Orlando Florida Real Estate? 

• Pick the Best Local Orlando Florida Lender.

With our daily experience, we can help advise you on the most efficient and reputable lenders in the Orlando Florida area for you to compare for your real estate purchase.

• Write a Longer Contract.

Most home sellers realize getting a loan can take longer today. When writing the sales contract, consider a longer financing period, adding 1 to 2 weeks or more to the normal period. Also consider a contract renewal clause if the mortgage is delayed. This helps everybody plan their moves from the beginning.

• Shop for a Longer Commitment.

Home buyers should consider shopping for a lengthy interest rate commitment when rates are rising. Although 30-day and 60-day "lock-in" periods are typical, some mortgage lenders will offer a longer guarantee period at a higher rate with more points. When mortgage rates are declining, letting the rate "float" may be best.

• Do Your Homework.

The faster you complete your share of the paperwork, the faster the loan is processed. Give attention to addresses with zip codes, names and titles, phone numbers; account numbers and branch bank addresses; credit card numbers, unpaid loan numbers and lender addresses; employer addresses with contact name. Also be sure to include any details or credit problems that will make the loan processor's job easier.

• Forsake the Mail.

In a crunch, be prepared to hand deliver documents if necessary, such as the loan application, tax returns, title reports, insurance policies, or account statements.

• Solve Logjams Yourself.

Knowing what an Orlando Florida real estate mortgage lender needs and where it comes from is one way we can help prod the process along. Sometimes it pays to get to know the loan processor, as well as the loan officer. Regular calls, perhaps weekly, to get the status and ask if documents are complete can also uncover and solve logjams. Specifically, ask about applicant-related verifications of sufficient and stable income, credit and closing funds.

Remember, the lender doesn't want to lose the mortgage any more than you want to lose the house. Working together, we can avoid costly delays. If you want more information on buying and financing, we'll be glad to talk to you.

Looking for specific information regarding Orlando Florida real estate prices and communities?    Get Your Free Market Snapshot.

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If you are wanting to sell your Seminole County or Orlando area home in the next 6 to12 months, now is the time to begin putting your plan into place, while time is still on your side. Please contact us for any real estate assistance you may need.

We're experts at putting people together with homes they love and can afford. Contact us today for information on Orlando and Seminole County real estate, Orlando & Seminole County homes for sale, Orlando & Seminole County relocation information, a free market analysis of your Orlando area or Seminole County home or statistics on homes in Orlando & Seminole County Florida or the surrounding Central Florida area, including Seminole County, Orange County, Lake County and Volusia County. We're always available to answer your questions.

Orlando Florida Real Estate Resource

Fannie Mae Announces Single National Down Payment Policy;
Replaces Policy Regarding Markets Where Home Prices are Declining

The following post was provided to us by Nate Morris of First Horizon Home Loans

WASHINGTON, DC -- Fannie Mae (FNM/NYSE) today announced a new, national policy on down payment requirements for conventional, conforming mortgages the company will purchase or guarantee. Starting June 1, 2008, Fannie Mae will accept up to 97 percent loan-to-value ratios for conventional, conforming mortgages processed through its Desktop Underwriter^® (DU^®) automated underwriting system, and 95 percent loan-to-value ratios for loans underwritten outside of DU, in all geographic locations in the United States, including Orlando Florida. The new national down payment policy will supersede the policy the company adopted in December 2007 that required higher down payments in markets where home prices are declining...such as Orlando Florida has done recently.

"As another part of our 'Keys to Recovery^TM' initiative, we are today announcing that we will be equalizing the down payment requirements for borrowers in all parts of the country, regardless of local market conditions," Marianne Sullivan, Senior Vice President, Single-Family Credit Policy and Risk Management, said. "This new down payment policy reinforces our goal to support successful home-owning, not just home-buying, as we seek to bring liquidity to all communities and help the housing market recover."

The new national down payment requirements of 3 or 5 percent will apply to loans for purchase of single-family, primary residences. Down payment requirements will vary for other occupancy, property and transaction types. The company will implement systems and operational changes over the summer to accommodate the new national policy.

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Orlando Florida Real Estate Resource

Orlando and Seminole County Home Buyers - Title Insurance Is A Must!

Here's an FYI for all you "I want to wait for prices to drop more" Orlando Florida Real Estate home buyers.   

Waiting may well make your Orlando area home MORE expensive not less! How is that possible if the prices of Orlando Forida Real Estate drop? Unless a home buyer really does pay all cash, even a small increase in intrest rates can wind up wiping out most, if not all of the saving from the price decrease, due to the increased interest costs. And as the article below indicates - interest rates are very likely to be going UP. 

Here is a simplified example: On a $220,000 house, if the price goes DOWN by $10,000 but interest rates go UP by only 3/4%, then an Orlando Florida home buyer will pay $8,600 MORE in interest during the first 10 years and $17,200 MORE during the first 20 years. Pull out your financial calculator and check it out! Oh - the monthly payments are nearly $400 MORE per year too!

[Price NOW $220,000 - With a $20,000 down payment and $200,000 30yr fixed rate mortgage at 6% - will result in $111,263.58 of interest during the 1st 10 years.

If the price drops by $10,000 to $210,000 and Orlando Florida Real Estate intrest rates increase by only 3/4% - With a $20,000 down payment and $190,000 30 yr fixed rate mortgage at 6.75% - this will result in $119,952.26 of interest during 1st 10 years.] 

So to paraphrase an old saying - An Orlando Florida home buyer who hesitates may suffer a big loss!

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Orlando Florida Real Estate Resource

Orlando, and Lake Mary Mortgage Rates

Photo by Paul Moody

An Inverted Yield Curve:
What It Means to Mortgage Rates & Programs

The U.S. economy, interest rates, and the housing market are frequent topics on the nightly news. Viewers are told about leading economic indicators, how the stock market has performed, and whether the Federal Reserve is planning on changing interest rates. What isn't explained is how these items are interrelated and how they may impact which home loan is best for you.

The Federal Reserve attempts to keep the U.S. economy healthy through its use of monetary policy. As fears of inflation increase, the Fed will raise certain short-term interest rates such as the federal funds rate, which is the interest rate banks pay each other for overnight loans. Such an increase causes a ripple effect, with banks raising their prime lending rate. This, in turn, causes an increase in Adjustable Rate Mortgage (ARM) rates and the indices they're tied to, such as the 12-Month Treasury Average (MTA), the 11th District Cost of Funds Index (COFI), and the 1-Month London Inter Bank Offering Rates (LIBOR).

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