Florida Logo


Mortgage DOs and DON'Ts for all of Florida

By Preston Ware

It is always good to be an educated consumer. Here are some key issues to keep in mind:

  • DO remember that a good mortgage consultant or mortgage banker is here to guide you on your path to homeownership.
  • DO read all of your paperwork. Only about 25% of customers read all of their paperwork. It is important to know where all of the closing costs are coming from and also what is expected of you. The paperwork you receive in the beginning of the process is very similar to the paperwork you will sign at the end of the process; the only major difference is that at the end of the process, you will sign a mortgage note and a mortgage agreement which will get recorded at the courthouse.
  • DO ask questions.
  • DON'T try to do all of your initial questioning by email. Yes, we are living in the age of the internet: but it is still important to have a thorough conversation about your loan with your mortgage banker. You will absorb so much more information and troubleshoot the pitfalls of your loan much better and more quickly from a face-to-face conversation.
  • DO get a pre-approval letter before you go shopping with a realtor. Most good realtors will not begin the process with you unless they know you have been properly pre-qualified by a lender. This also helps your bargaining power and your ability to secure a low purchase price if the seller knows you are the real deal and you are ready to make an offer at any time.
  • DO get a home inspection Learn the hidden secrets of the home you are purchasing. Even if you are considering an "as is" purchase, sometimes you are able to bring these problems into the negotiations with the seller and get a better deal, especially if you are buying a foreclosure that the bank wants to unload.
  • DO discuss the concept of structuring your deal with seller-paid closing costs. Your lender and realtor will need to be on the same page for this, but by structuring your financing this way you will keep more money in your pocket with a minimal effect on your final payment. This may put pressure on the realtor because he or she is trying to convince the seller what a strong buyer you are, but at the same time, you may have limited funds for closing.
  • DO give yourself enough time for all steps of this process.
  • DON'T write your contract with a short closing date. Depending on the lending environment, sometimes lenders will get backed up. At one point this year some banks were taking as long as three weeks to underwrite a file. Also if you are purchasing a foreclosure, there may be issues with title that slow down the process. If you write the contract with a lengthy closing date, you can always close early.
  • DON'T go shopping without a realtor. A good realtor will know the pitfalls that can occur along the way and knows the game of negotiating a good price.
  • DO shop your loan officer.
  • DON'T use the seller's lender. It's just like going car shopping: you can usually get a better deal if you line up your own financing rather than using the dealer's guy. Competition works.
  • DO notice the difference between your note rate and the APR on the truth in lending form. The difference between the two is a measure of closing costs.
  • DON'T be suckered into an advertisement where the rate is 1/2 a percent lower than everybody else. These ads are usually a bait and switch.
  • DO make sure your home is presentable when you get a visit from the appraiser or a potential buyer. Every little bit helps. It's like going on a date: you want to look your best and make a good impression.
  • DO hold on to your survey and your owner's title policy. You will get three surveys at closing and the owner's title policy will be sent back to you about 4 to 6 weeks after closing once your deed is recorded. These two items will save you lots of money if you ever have need to refinance later! Put them in a safe place.
  • DON'T forget when refinancing to follow up on any overpayment of your payoff and the escrow balance held by your previous lender. A good lender will let you know approximately how much you will have coming back to you after closing in 4 to 6 weeks.
  • DO shop your homeowner's insurance. Start with the company you have your car insurance with; perhaps they can bundle the policies and save money. Check with at least one other agent because most insurance people have different ways of arriving at the same number. Checking around could save you a significant amount of money.
  • DON'T forget about hurricanes and tropical storms. If you are living in a place like Florida and there are hurricanes in the gulf, insurance companies will not bind coverage until the storm blows through. Lenders don't want to run the risk of your home getting demolished. Either bind the coverage early to avoid a delay in closing or wait for the storm to blow though.
  • DO compare your initial fees worksheet with the final closing statement. They are supposed to be within $200 of each other; quite often the major differences are due to estimates on escrows such as taxes and insurance, but still compare each line item and ask questions. A good lender will get you a copy of the final closing statement well before the closing.
  • DO refer your mortgage consultant and realtor to friends, family and co-workers. That is one way that helps us keep helping others!
  • DO stay in touch. You never know when there is an opportunity out there that can save you some money.
Share this:


Leave a comment:

* Login in order to leave a comment. Don't have an account? Join for Free

About The Author

Mortgage banker serving all of Florida

Phone: 561-329-0075

View Profile

Become an Expert Contributor

Have some knowledge to share, and want easy and effective exposure to our audience? Get your articles or guides featured on Florida Homes today! Learn more about being an expert contributor.

Learn More