Pebble Pointe Realty: Florida's State Wide Realty Information Center

"PEBBLE POINTE REALTY"
Robert Wells, Office Manager
WANTS YOU TO KNOW
Before Purchasing or Selling...
Here are some important "information"
and "tips" from our

"Florida State-Wide Real Estate Information Center"
How are you paying? Will you be paying cash, getting a mortgate, facilitating A "1031 Exchange" (Information On 1031 Exchange Property)?

The IRS allows you the opportunity to defer capital gains taxes owed upon the sale of investment or income property by exchanging the property for other like-kind property. There are specific guidelines that must be strictly followed and "time-is-of-the-essence". You have to pre-plan well ahead of closing! You should contact your tax advisor before persuing this type of transaction. Next, you should contact a Qualified Intermediary to help you understand the benefits and procedures ... The "Qualified" Intermediary will help you through this process once you have made your decision to proceed.

The other important person in this process is , "One Dedicated SALES ASSOCIATE! Keep your Associate informed of your Intermediary's paperwork as it progresses ... and make sure the "property closing" process is proceeding in a timely fashion.

PRE-APPROVED or PRE-QUALIFIED?

PRE-QUALIFIED MEANS: You spend a few minutes with a lender(mortgage company representative or bank loan officer). They ask you a few questions about your financial status. Based on your answers, the lender pronounces you "Pre-Qualified", issues you a certificate that you can show to your Sales Associate or Seller.

Here is the catch! None of the information that you gave the lender has been verified! Often times, unknown problems exist that you may not even have knowledge of or remember as important. (tax liens, glitches in your credit report, which could be accurate or inaccurate, etc..) So being pre-qualified is not a tool to base your financial status on.

PRE-APPROVED MEANS: This happens "after" all information has been "checked and verified" by the lender. You will actually be given "approval for a loan" ... for up to a specific amount of money. The only loose end is the appraisal on the property that you intend to purchase.

The Pre-Approval "process" can take anywhere from a few days to a few weeks depending on your personal financial situation. BUT, It is a very powerful tool to have!

PRE-APPROVAL FOR A LOAN WILL SAVE YOU LOTS OF TIME!

TIME ... (look only at properties that you know you can in reality "purchase")

FRUSTRATION ... (not being able to purchase what you find and get your heart set on)

NEGOTIATING ... (a seller will know that you are very serious and may be of mind to meet your offering price more readily)

YOUR SALES ASSOCIATE WOULD NEED TO SEE THIS "PRE-APPROVAL CERTIFICATE" RIGHT AWAY TO SHOW YOU INFORMATION IN YOUR APPROVED PRICE RANGE
SHOULD YOU PAY POINTS ON YOUR MORTGAGE?

When it comes to comparing interest rates for a mortgage loan, home buyers often have the option of choosing a loan with a lower interest rate by paying "points". Simply put, a point is equal to 1% of the loan amount. "Points" are usually paid out of pocket by the buyer "at closing".

Paying "points" may seem attractive, because it means a lower monthly payment. Whether paying "points" is a good idea or not, depends on how long you intend on staying in your home before selling. For a new mortgage (not refinanced), the "points" are deductible on your taxes in the first year.

UNDERSTAND MORTGAGES BEFOREHAND
TYPES OF MORTGAGES

Fortunately for buyers, there are a variety of types of mortgages to choose from. It is best that you investigate each of them to determine which might be best for your situation. It is a fact that you can save yourself money and worry in the long run ... if you "investigate and learn your options".

FIXED RATE MORTGAGES
Consider a Fixed Rate Mortgage
  • If you plan on living in your home for many years, and/or
  • You are not a risk-taker and prefer the stability of knowing how much your payment will be each month.

This might be a right choice for you if the interest rate is in a "low range". If the rate is "high" at the time you take out your loan, you would have to try to "refinance" at a later time to possibly get a lower rate of interest.

ADVANTAGES and DISADVANTAGES of a "Fixed Rate Mortgage"

15 Year Fixed Rate:
  • Pay off the loan in half the time of a 30 year
  • Equity builds up more quickly than in a 30 year
  • Payments are higher(which may be a problem if you lose your job or become disabled)
    20 Year Fixed Rate:
  • Pay off the the loan in 2/3 the time of a 30 year.
  • The overall interest paid is considerably less than a 30 year
30 Year Fixed Rate:
  • The most common choice, especially for FIRST TIME HOMEBUYERS, as it is the easiest of the fixed-rate loans to qualify for
  • Monthly payments are lower than 15 and 20 year loans. This can prove especially helpful if you do not have alot of "padding" between the amount you can afford to spend and the monthly payments for your desired property
  • More desirable if you plan on staying in the same house for years
  • For income tax purposes, this term provides the maximum interest deduction.
LEARN ABOUT BALLOON PAYMENT LOANS: A balloon payment refers to a loan that has a large, final payment due at the end of the loan.

ADJUSTABLE-RATE MORTGAGES: (ARMS) If interest rates are "high" when you take out your loan, an adjustable rate-mortgage may be the solution for you. You might also choose this type of loan if you intend to stay in your property for only a short time.

Generally, the interest rate starts out low, but not for long term. Since an ARM rate rises and falls depending on "prevailing" interest rates, your mortgage payment will also rise and fall accordingly.Fortunately, "the amount an ARM can increase is limited". There are "caps" on how much your lender can increase your rate, both for a period of one year and for the life of the loan. PLAN AHEAD ... Have your lender calculate what the MAXIMUM payment would be if your interest rate went to the HIGHEST amount allowed by the cap for your particular mortgage. If you have any doubts, perhaps you should reconsider not using this type loan.

CONVERTIBLE ARMS : If neither "the fixed-rate or the adjustable-rate mortgage" seems like the best, perhaps the Convertible ARM will be right for you. This alternative combines initial advantage of an ARM with a fixed-rate "after" a predetermined number of years. Obviously, this type of mortgage has more advantages when the initial interest is low and the future rate is not gauranteed.

CONVENTIONAL LOANS : A Conventional Loan is simply a loan offered by a traditional private lender. They may be fixed-rate, adjustable, or other types of loans. While Conventional Loans may be harder to qualify for than government backed loans, they often require less paperwork and typically do not have a maximum allowable amount.

GOVERNMENT LOANS : Another mortgage option available to some people is a government loan, providing you meet the qualifications for these loans.

VA LOANS : Veterans may qualify for a loan from the Veterans Administration. There is a limit on the amount you can borrow, so this option works best for those buying a lower priced home.

FHA LOANS : The Federal Housing Association offers loans to lower-income Americans. Look for the phrase "FHA Approved" when looking at ads for these homes.
SERVING ALL OF CENTRAL FLORIDA
3742 Nova Road, Suite-1013
Port Orange , Fl. 32119
24 Hour Direct Telephone - 386-767-8855
24 Hour Direct Fax line - 877-379-0327
BARBARA P. WELLS, Real Estate Broker
ROBERT J. WELLS, Office Manager