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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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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Orlando Florida Real Estate Market Update - February 2008

Below, you'll find a complete market update of all greater Orlando communities.  You can also view specific Orlando Florida real estate market info for Lake Mary, Longwood, Sanford, Casselberry, Winter Springs, Oviedo, East Orlando, Downtown Orlando, Winter Park, Apopka, and Maitland.  Just click on the specific Orlando community in the left hand navigation menu and you will find the Orlando MLS info for the specific area.  This information is pulled from the Orlando MLS and updated for you monthly.  We also provide you the ability to receive automatic updates on homes for sale from the Orlando MLS by email. 

Orlando Florida Year Over Year Real Estate Market Comparison

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Seminole County Florida Real Estate - Homes, Townhomes & Condos

Specializing in Seminole County Real Estate,
Orlando Real Estate and Orange County Real Estate in Florida

Should I wait for prices to drop further, before buying a home in Seminole County or Orlando Florida?  This is a question we hear repeatedly.

The headlines are saying "wait!" because Seminole County and Orlando Florida Real Estate prices are expected to decline even more.  How much?  No one can say for sure. Well, I'm here to tell you to IGNORE THE HEADLINES!  Yes, prices will probably drop more, but this doesn't necessarily mean you'll get a better deal.  You see, too many buyers are focusing on home prices and waiting, worried that the home they buy today will be worth less tomorrow.  What they're missing is that rising mortgage interest rates are a huge concern, and many would be buyers will find themselves out of luck if they wait much longer.  And to top it all off, mortgage lending standards are tightening, leaving fewer and fewer Seminole County and Orlando Florida home buyers unable to qualify.  While almost anyone could get 100% financing 6 months ago...today, there are only a couple of programs allowing you to buy with no money down, and qualifying standards have gone way up.

There's little doubt that waiting for the perfect time to get into the market will cost you more in the long run. As Jim Svinth, chief economist at mortgage firm Lending Tree has said, "The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher."  Any saving you see from falling prices will be offset by rising interest rates!

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