Archive for the 'Mortgage Rate Watch' Category

It’s Gonna Cost Me What?!

March 18th, 2008 categories: Tampa Real Estate, Mortgage Rate Watch, Tampa Home Buyer Tips

For most folks, a monthly mortgage payment is made up of 4 components:

1. Principal on the loan.
2. Interest on the loan
3. Taxes (property)
4. Insurance (hazard, flood, etc)

Those 4 components are commonly referred to as PITI. I commonly run in to folks who are grossly underestimating their monthly nut on a specific loan amount.

There’s no better way to get an accurate estimate on your monthly payment than by speaking with a mortgage loan professional. However, if you want to give it a go yourself, here’s how to do it:

1. Assuming you know how much you’ll be borrowing (I know, that’s a big assumption.), go to my mortgage loan calculator (go there), and plug in the loan amount and the interest rate, and the loan term. This will give you the P and I components of your monthly nut.
2. Next, go to the property appraiser’s tax estimator (go there) and fill in the info. Make sure to select a millage rate. All City of Tampa millage rates are pretty close, so if you don’t know your code, select any Tampa code. Then select either Yes or No for the homestead exemption. Only your primary property qualifies for homesteading. The estimator will spit out a range of estimated taxes. Pick a number near the middle of the range. This is the T component of your monthly mortgage payment.
3. Now all that’s left is the I component, the insurance. Place a quick call your favorite insurer and get an estimate of what it will cost to insure your perfect home.
4. Add it all up and there you go, a pretty accurate estimate of your monthly payment!

Posted by Lenny Gurvich | No Comments »

Transparency Of Mortgage Loan Terms

August 30th, 2007 categories: Tampa Real Estate, News on Interest Rates, Tampa Market Conditions, Mortgage Rate Watch

The juxtaposed headlines in today’s Tampa Tribune’s business section:

Fed Urges Mortgage Options and Fewer Buyers Seeking Home Loans

In the first article the Fed chairman, Ben Bernanke , is quoted as saying that having “a broader range of mortgage products which are appropriate for low and moderate-income borrowers, including those seeking to re-finance” might help the current situation, and that said new mortgage products “could be designed to help avoid or mitigate the risk of prepayment shock and to be more transparent with respect to their terms”.

How do you make the terms of a mortgage more transparent? The fact is that many buyers/borrowers never fully understand what they are agreeing to when they sign the docs or what the agreed upon terms could mean down the road. Most just focus on the rate, the payment, and the closing costs. Once those three are acceptable it’s “where do I sign?”, “let’s get this thing over with!”.

Let’s face it, mortgage terms are difficult for most to understand, especially first time borrowers. Mr. Bernanke’s reference to “pre-payment shock” exemplifies this lack of understanding. Many borrowers recently took out these adjustable rate mortgages that are now adjusting, and not in the favor of the borrowers. And when they see how much the payment is going to be once the adjustment is made, the re-finance alarm goes off, and the call is made to see “what can I do?” It’s then that the borrower realizes that there is a substantial cost to get out of the current “product” in which they are in, the pre-payment penalty. Maybe they were aware of it, maybe not.

According to Craig Duncan with First Security Mortgage, one of our lender partners, an example pre-payment penalty is 6 months of interest if you pay off the loan within the first 2 years. That can be about $6500 assuming a $200k balance with today’s rates. The lender will often require the penalty so that they are guaranteed a certain return on the loan. The borrower usually gets a better rate. If you’re considering a pre-payment penalty, ask your lender if a “soft” pre-payment penalty is available. With this type, should you sell the property, no penalty would be due. A refinance however, would be penalized.

But the point here is that loan terms are transparent to the borrower. The borrower must sign the Truth In Lending form that discloses all of the terms, including any pre-payment penalties. Home buyers need to really think ahead when considering a pre-payment penalty. The terms are there. Just read and understand them. If you don’t, ask your Realtor or some other third party individual. And the best advice I can give is to work with a good team of real estate professionals that can give you the best guidance through all aspects of a home purchase. Realtor, lender, home inspector, etc. are all key elements in protecting buyers’ interests in a real estate transaction. Get a good team and use them to your advantage.

Posted by Lenny Gurvich | 4 Comments »

Tampa Real Estate Market Conditions

June 22nd, 2007 categories: Tampa MLS, Tampa Florida Real Estate, News on Interest Rates, Mortgage Rate Watch

The Greater Tampa Association of Realtors, of which I am a member, has been running an ad lately that points out why now is a good time to buy residential real estate in Tampa. One of the points the ad makes is that there has never been such a great choice of properties available for sale. And right they are. In fact, there are almost 3000 more properties for sale in the City of Tampa than there were 12 months ago. But at the same time there are over 800 less properties under contract to be purchased as compared to June of 2006.

So yes, with respect to availability, now is a great time to buy a home in Tampa. And while sales are down as compared to recent years, buyers are buying. The City of Tampa alone has had 3420 brokered sales of residential properties year-to-date. Hillsborough County has had 6175 sales. Pinellas has had 5197 brokered sales since January 1^st 2007.

In the last 7 days, 124 transactions for properties in the City of Tampa have closed. (Report, sorted by price). These properties were, on average, purchased at about 96% of the list prices (not factoring in any previous price reductions).

Tampa’s residential real estate market can be summed up as follows:

• Fairly stable and historically low mortgage interest rates
• Increasing inventory
• Decreasing demand

This all points to advantage: BUYER. So while all buyers of residential real estate have differing situations, this is a good time to purchase generally speaking. There are very few buyers “in the store”, prices have been slashed, money is cheap, sellers are willing to deal, banks are willing to deal (see: short sale), and the shelves are stocked full.

Data used is from the Mid-Florida Regional MLS and does not include private sales/listings.

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Posted by Lenny Gurvich | No Comments »

Weekly Tampa Real Estate Market Conditions Report

May 11th, 2007 categories: Tampa MLS, Tampa Florida Real Estate, Tampa Market Conditions, Mortgage Rate Watch

The number of active MLS home listings in Tampa jumped slightly over the last week while the buying activity did likewise.

In the last 7 days 132 properties went under contract, while 85 sales closed.

In Hillsborough County, there are 15,941 residential properties listed as of this morning (5/11/07). At the end of March, there were 13,426 residential properties listed for sale in Hillsborough County according to a local report from NAR, whose forecast for Q2 of 2007 is for decreasing inventory, increasing sales and an increase in the average home price. Almost 6 weeks into Q2, this has not been the case.

But Q2 is usually a busy season for Tampa real estate and the sense on the street is that many of the fence-sitting, tire-kicking home buyers are beginning to become more motivated as price reductions have become more prevalent and interest rates remain low.

Posted by Lenny Gurvich | 1 Comment »

Florida Leading The Way In Mortgage Fraud

November 1st, 2006 categories: Tampa Real Estate, Tampa Florida Real Estate, Tampa Market Conditions, Mortgage Rate Watch

No big surprise here with the recent headlines of a local agent and her team that systematically paid well over asking price, got the inflated loan, paid the seller and pocketed the rest. All allegedly of course. But yes, according to Fannie Mae, Florida is at the top of the list for mortgage fraud on loans originating in 2005-2006. Florida recently stole the crown from Georgia, the leader in 2003-2004 mortgage fraud.

So what kind of fraud is perpetrated across the state? According to Fannie Mae’s September report, income fraud accounted for 26% of the reported cases. Income fraud occurs when the borrower’s income and/or employment information is inflated or fabricated.

Next in line is liability fraud (16%), or a misrepresentation of a borrower’s liabilities. (See the full report)

Florida has consistently been one of the top 10 states for mortgage fraud in the last 7 years according to Fannie Mae. Rachel Dollar, who runs a blog on mortgage fraud, has a long list of recent posts of incidents in Florida. Seeing that she is in the business of mortgage fraud services and solutions, I’ll bet business is good.

Posted by Lenny Gurvich | No Comments »

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