Florida a National Leader in Mortgage Applications

Mortgage ApplicationMortgage applications in Florida are up 189 percent in one year – with the Sunshine State becoming one of the hottest home lending markets in the nation, according to the Mortgage Bankers Association.

Only Arizona and Nevada enjoyed a higher rate of increased home loan applications, according to the association’s state-by-state analysis.

One of the driving forces has been homeowners trying to refinance their homes. In May 2011 only 48 percent of Florida loan applicants were trying to refinance; last month, 74 percent of applicants wanted to refinance, the association found.

“Refinance volume increased as borrowers were able to lock in at mortgage rates below 4 percent,” said Michael Fratantoni, the association’s vice president of research and economics.

The 30-year fixed rate loan has remained below 4 percent since December, with the exception of one week, according to Freddie Mac, the secondary lender.

Mortgage interest rates increased this week for both 15- and 30-year fixed rate loans, but they still remained near historic lows, Freddie Mac reported Thursday.

The average 30-year fixed rate rose to 3.71 percent, up from last week’s 3.67 percent. Last year at this time, the average rate was at 4.5 percent, according to Freddie Mac.

Interest rates on 15-year, fixed-rate mortgages also moved up this week, from last week’s 2.94 percent to currently 2.98 percent, Freddie Mac said. Last year at this time the average rate was 3.67 percent.

The low interest rates have created a home lending boomlet, with mortgage applications jumping 18 percent last week nationwide on a seasonally adjusted based, according to the Mortgage Bankers Association. That was the biggest jump in three years, since May 2009, the association said.

The historic low rates are helping first-time buyers afford homes.

In Boynton Beach, Jen Harrison, 28, said she was able to get a 3.75 percent, 30-year fixed rate loan on her first home, a two-bedroom town house. Even with homeowner’s association fees, she said she will be paying less than $1,000 a month for her new home.

“That’s cheaper than rent,” she said, estimating she’s saving about a $400 a month.

The lower interest rates – plus South Florida’s current low home prices – are helping the region rebound from one of its worst economic downturns in decades, said William B. Stronge, an economics professor emeritus at Florida Atlantic University.

With lower monthly payments, owners have more money to spend elsewhere, he said.

The improved conditions also are helping the real estate sector recover from the devastating housing bust, he said.

In fact, more real estate professionals in Florida are becoming upbeat about business improving, said Timothy S. Becker, director of the Kelley A. Bergstrom Center for Real Estate Studies at the University of Florida.

More builders, for example, are now looking to start or expand new projects, said Becker, whose center is part of the Warrington College of Business Administration.

“It’s slowly coming back,” he said. Copyright © 2012 the Sun Sentinel

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Proper Planning for Your Mortgage Application

Mortgage Application PictureWith good preparation, most things are easier. That works in mortgages too! Today, I want to give you some ideas that can make your mortgage experience less painful.

Income Items:

  1. Gather your documents. Today, many people will have to produce 2 years’ complete tax returns, including W2′s, 1099′s, K1′s, and all the schedules, as well as a month’s worth of pay stubs.
  2. Be prepared to explain them. Deductions in your returns and your pay stubs may impact the income your lender will use to qualify you which, in turn, has a big impact on the loan you will get.
  3. Have a breakdown of base pay versus overtime for both your pay stubs and 2 years’ W2′s. Lenders treat overtime (and bonus income) differently than your base pay. Be prepared to explain any changes over the last few years because your loan officer will ask you about it.

Asset Items:

  1. Start accumulating your bank statements. Lenders look back 3 months from when you sign your contract of sale.
  2. You will have to explain any and all large deposits (which are defined as deposits greater than your regular pay check) because lenders want to make sure you haven’t taken out any new loans that aren’t on your credit report.
  3. Avoid any significant cash deposits. However, if you did have a cash deposit, understand that the lender will have you source it (a bill of sale and DMV receipt for that motorcycle, for example).
  4. If you will be receiving a gift, consult your loan officer on how to document it (from the donor’s ability to how you deposit it).

To continue reading please click over to the KCM Blog   Copyright © 2012 Keeping Current Matters, by Dean Hartman

For more information about qualifing for a mortgage and the application process contact SHELTER | Urban Real Estate today at 813.769.9371 or info@SHELTERtampa.com.

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