You’ve probably heard someone invoke the idiom, “A penny saved is a penny earned.” It makes sense to seek the best deal when making any purchase, but looking for the most favorable terms is especially essential when buying a house.

The interest rate you obtain for your mortgage can make a significant difference in the total amount you pay for your home, according to Investopedia. For example, if you have a 30-year fixed-rate mortgage for $200,000, at a prime rate of 4.6 percent, you’ll pay $169,103 in interest over the life of the loan. By contrast, at a subprime rate of 6 percent, your interest will total $231,676 during that time.

While you can’t control some factors affecting mortgage rates (e.g., overall marketplace and economic conditions), you can take steps to increase your odds of receiving a lower interest rate. If you’re wondering how to get the best mortgage rate for your Florida home, here are some expert recommendations to consider.

1. Increase your credit score.

Lenders usually offer the best rates to borrowers with high credit scores, according to NerdWallet. The “good” score range starts at 690, and you’ll need 720 or higher to qualify as “excellent.” To boost your score, you should start by requesting free credit reports from all three credit bureaus (TransUnion, Experian and Equifax). Visit AnnualCreditReport.com to obtain your reports.

After that, you can increase your score by disputing any errors on the reports and paying off any debts that have ended up in collections. Additionally, NerdWallet recommends paying your bills on time, paying down any debts, and keeping your credit card balances low. Ideally, you should pay off your balance in full every month instead of carrying it over and accruing interest.  

2. Make the largest down payment possible.

It helps to save as much as possible for the down payment, according to Investopedia. Paying more upfront will, of course, lead to lower monthly mortgage payments and less interest paid over the life of the loan. Additionally, it could lead to better terms: For example, paying 30 percent instead of the typical 20 percent could potentially lower your interest rate by 0.5 percent or more.

3. Shop around and compare offers from several lenders.

The Consumer Financial Protection Bureau (CFPB) advises obtaining quotes from three or more lenders so that you can compare your options. Additionally, the CFPB warns that the rates might change between when you first speak to the lender and when you officially apply for a mortgage, so you should choose the best option based on official Loan Estimates, which you’ll receive after submitting your applications.

4. Don’t be afraid to negotiate.

After you have quotes from several lenders, the U.S. Department of Housing and Urban Development (HUD) advises negotiating for the best possible deal. The HUD recommends asking the lender to write out all the associated costs and requesting better terms if possible. Additionally, if you favor a specific lender but received an offer with more favorable terms from a competitor, you can show the first lender the better quote and ask them to match it, according to the CFPB.

To create and adjust your budget for buying a home, please take advantage of Avalon Suncoast’s free online mortgage calculator. This easy-to-use tool accounts for purchasing, amortization and financing. Note: Our mortgage calculator provides estimates and is not intended to provide the exact cost of your mortgage or taxes.  

The Avalon Suncoast team of real estate experts can help you find a house, condo, commercial real estate, or land in Southwest Florida. Get started by calling 941-235-7474 or emailing sales@avalonsuncoast.com.

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However, if a seller is still amenable to an FHA mortgage, they should be sure to place a specific dollar cap on repairs that the FHA requirements for a seller would demand. Even a home that seems well maintained can reveal some of the following FHA defects.

Repairs That Must be Completed for FHA approval

Peeling paint in homes built before 1978 Lead Based Paint rules
Broken, damaged or unpainted gutters and downspouts
Exterior doors that do not operate properly
Exposed wiring
Major plumbing problems
Broken A/C systems
Leaky or defective roofs, roofs with a life expectancy of less than 3 years
Active and visible pest infestation
Rotting exterior wood items.
Rotting Window frames and sills
Missing appliances that are customarily included with a home
Bedrooms without minimize-sized windows or obstructions preventing egress
Foundation or structural defects
Inoperable kitchen appliances
Empty pools or those without a working pump or other defects
Torn house or lanai screens
No pressure relief valve on water heater
Damaged fencing

Repairs That are Not Necessary to Fix Before Closing

Peeling paint in homes built after 1978 (Not Lead Based Paint)
Cracked glass
Minor plumbing defects
Damaged wall coverings in homes built after 1978 (Not lead based paint)
Worn flooring
Beat-up or damaged exterior doors that operate properly
Removal of debris
Evidence of previous or inactive pest infestation
Replacement of flat roofs
Water tests

A seller of improved real estate should be aware of FHA Requirements for a Seller. If accepting a contract with an FHA contingency, a seller should be sure to limit their repair exposure. Discuss the implications with your agent.

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For more info on FHA loans visit the HUD website

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Analyzing the right time to buy a home in Southwest Florida, otherwise known as “Market Timing”, is difficult to calculate. Personal and societal economics are in constant change. Nevertheless, we all need someplace to live and a home is one of our biggest investments. Even if you are considering a second home, it is a large consideration.

During the past several years, especially the last two, prices for homes and condos in Southwest Florida have climbed and the deals that came during the downturn are gone. That is not to say that we’ve rebounded to the peak or that there are no deals to be had. A prudent shopper with the aid of a dedicated real estate agent will always find the best deal in the market to buy a home in Southwest Florida. However, all is relative. A great deal today may be 10 or 20 percent higher than it was only three years ago.

Economists report that home prices increased 5.5% during 2017. That means a home priced at $200,000 in 2016 had increased to $211,000 during 2017. If home price appreciation returns to a more normal and sustainable level in 2018, that is 2.5% – 3% increase, that same home would again cost more. A low end increase of 2.5% would make a $211,000 home cost $216,265 the next year and $221,672 the year after that, more than $21,000 increase in two years.

Perhaps even more important than home price appreciation is an increase in mortgage rates. the cost of a mortgage has been at historic lows through the last decade. However, when the Federal Reserve sets the target level of federal funds rates, banks usually adjust their mortgage rates. Most economists expect that rate to rise in 2018 and hold as long as the economy remains steady.

As of this writing (1/8/2018), mortgage rates are below 4% (one quote I found was 3.875% for a 30 year fixed and 3.375 for a 15 year fixed). Using those numbers, a $200,000 home, 20% down payment, $160,000 mortgage at 3.875% would cost $752.38 per month, principal and interest (This does not include escrows for taxes and insurance). If mortgage rates for the same home and loan amount reach 5% as predicted, the monthly payment would increase to $858.91, an increase of over $100 per month. With taxes and insurance, that total can be over $1,200 per month.

Many people who hope to buy a home in the next year will move those plans up due to these numbers. Purchasing a home now, can save tens of thousands of dollars over the life of a mortgage and even if one purchases with cash, the saving can be significant.

For more information on purchasing a home in Southwest Florida, please call or email Your Suncoasteam, 941-235-7474 or sales@avalonsuncoast.com.

And if you wish to browse the market, click here to search the Southwest Florida MLS.

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Closing the sale of a home can be a stressful and time consuming process. The usual time for a home closing from contract acceptance to move in day is between 45 – 60 days. Many buyers moving to Florida are eager to move into their new home and want to speed things along.

Whether you have all the time in the world or you wish a fast home closing, you will want to have an orderly process. Sometimes buyers need to sell a current home before moving, This often requires simultaneous home closing where where the sale and purchase of two homes happen the same day.

To make your home closing easier, there are a number of steps that can keep you on track.

Get a Mortgage Pre-Approval. Most buyers who will obtain a mortgage for their new home get a quick Pre-Qualification. This is a simple credit check that states the buyer can qualify to purchase a home up to a certain amount according to their credit rating. A Pre-Approval is a much stronger document that has undergone a more complete review of the buyer’s credit and obligations. With a Pre-Approval letter, there are far fewer chances of surprise after a contract is written and complete. Furthermore, a contract that canceled due to mortgage disapproval can be very costly to a buyer. The buyer would probably have spend money for inspections, surveys and more, all of which would be non-refundable. One of the most common reasons for a contract to fall through is buyer with a pre-qualification turns out to have debts that were not discovered in the limited process.

Needs and Wants. Whenever one buys an existing home they are looking for the ideal home. Of course one always wants that home where everything is perfect. Such a home is a rarity. Unless one contracts with a builder for their custom home, they will be buying someone else’s perfect home. The best way to help your real estate agent find your best choice is to make a list of needs and wants. Tell your agent the minimum number of bedrooms and baths that you must have for a comfortable home. If you want 4 but need at least 3, it will be a big help to know that. Are granite counter tops in a kitchen an absolute need or can you accept a home with another material? Is a swimming pool a need or want. Knowing such things will make your home search faster and more efficient.

Purchase Offers. Everyone wants to get a great deal and your real estate agent wants that as well. If you get a great deal, you’re going to recommend that agent to friends and family. A good offer doesn’t have to mean a full price offer. There are many parts of an offer and when put together, they can add up to a good deal. Consider a higher than usual down payment. Sellers will often consider a lower price of they see that buyers are committed to the sale with a significant escrow deposit. Your agent will be able to discuss with you recent sales of similar homes in the area so you have a good idea of value. If you really like a house, be reasonable. Avoid what would be considered a “Low Ball” offer. If you make an exceptionally low offer, do not expect a counteroffer. A low offer should be made with the knowledge that it is a “take it or leave it” offer. With an exceptionally low offer, a buyer runs the risk of angering the seller. The seller may not consider the buyer to be serious about the purchase.

As-Is. Consider making your offer As-Is. Many buyers are afraid of an As-Is offer thinking that they have no rights. On the contrary, it could actually give you a much better bargaining position. With an As-Is offer you do not relinquish your right to inspect the home. It is telling the seller that you are not going to “nickel and dime” them. If you find a serious defect, you reserve the right to cancel the contract and receive return of your escrow deposit. This right is entirely the buyer’s and there is no monetary value attached. A buyer can reject the home for any defect the buyer considers important. Making an offer As-Is and limiting contingencies will make an offer much stronger. A seller may be spooked by too many contingencies. Nevertheless, sometimes a contingency is necessary to a contract and this should be fully discussed with your real estate agent.

Organize Your Documents. A mortgage company will require quite a bit of documentation of assets and income. A buyer should have copies of at least 3 most recent years of their tax returns on hand. One should also keep at least 3 most recent bank statements, investment fund statements, stock portfolios and pay stubs. In addition, records should be kept of any unusual expenditures or monetary gifts such as a gift of down payment from parents.

Keeping good records and making well considered offers can save time and headaches. Having a well thought out search process will also reduce time and effort to find, if not the perfect home, a home with which you will be happy. All will lead to a low stress home closing.

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If you are a young person or family who is renting a home or condo but wish to buy, you have options. Fannie Mae offers mortgages through a program called HomeReady. Freddy Mac has a program called Home Possible Advantage.

The Fannie Mae program has some exceptional terms, especially attractive for young buyers. Buyers can get into a single family home with as little as 3% down payment. Buyers can also use monetary gifts from relatives or friends to come up with the 3%. Downpayment gifts were often a no-no in the past. Buyers can also rent out a room in the house and use the rent as income toward loan qualification. This is great if you have a family member who will live with you but the renter does not have to be family.

There are rules to qualifying. These mortgages are intended for those with moderate incomes. This means that the buyer’s income cannot exceed the median income for the area. If you are a first timer buyer, minority purchaser, extended family group and other “underserved” borrower, these programs may be for you.

Are you a renter who really wants to buy?


Are you afraid that you don’t have enough savings for a downpayment?

Is your credit score a little low (a bit under 700) because you are young and have not had time to build credit?

Don’t just assume that you cannot own a home. These plans may be just right for you.

Call your bank and talk with a mortgage banker or call your Suncoasteam and we can give you a list of mortgage professionals.

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