The Mortgage Go To Guy!!

So you’re finally purchasing that new home since the price is down or your ARM Loan’s Adjustable Rate is about to jump so you’re going to finally get a new mortgage.   Well, you are in luck if you are going to start your transaction right now! 

Why?  This is the ideal time of year to start the process of a Mortgage. 

In Florida, property taxes are paid in arrears.  This means you pay at the end of the year for the prior year.  (Insurance is paid in advance, you pay your policy to cover you for the upcoming year)  Also, you receive a 4% discount for paying your annual property taxes in November. 

So if you close on a mortgage in August, September or October, you end up paying an entire year of property taxes at the closing table!  With Florida property values and our crazy tax system, this can be a hefty sum.  On top of this, you have to “seed” your escrow accounts with approximately 2 months of payments for taxes and escrows. 

There are some lenders that require as much as 15 months of taxes in advance!

In a Purchase, this isn’t so bad because you get a credit from the seller to cover their pro-rated share of that year’s taxes.  In a Refinance, though, this can seriously dampen your mood from the elation you should feel from getting a lower rate.

Now, October is in full swing.  Most lenders are readying their staffs for the glut of Adjustable Rate Mortgage refinancing that will be starting up immediately.  But that does not mean you have to close next week! 

You could get the loan application started and schedule a closing on your refinance for next month… once you verify that your current lender has already paid your taxes!

What? Yes… call your lender and tell them that you have received notice that taxes are due and want to know when the payment will be processed.  Then call the tax collector in your county and make sure that they have been received. 

After that, the lender will not require such a large amount of escrows!  This means that if your new refinance is close to the 80% Loan to Value threshold, then you will not have to bring money to closing or get an Equity Line / HELOC just to close your loan.

More Florida Mortgage and Real Estate News You Can Use From
David A. Podgursky, MBA
TheMortgageGoToGuy.com
Your Source for Residential, Commercial, Investment and Relocation Mortgages in Florida 

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