Know Your Options to Avoid Foreclosure

Know Your Options to Avoid Foreclosure

If you’re facing financial hardships and are worried about the bank foreclosing on your home, there are several mortgage relief options that you can consider to help you avoid foreclosure.

Ways to Stay In Your Home

Potential options to stay in your home and avoid foreclosure include:

  • Modification: You may be able to negotiate with your mortgage company to adjust the original terms of your agreement—including the payment amount and length of your loan—to make your payment more affordable.
  • Repayment Plan: If you’re past due, you could agree to split your balance and add it on to additional future payments. This resolves delinquency and helps you catch up over a longer period.
  • Refinancing: It’s possible to create an entirely new loan that replaces your current mortgage. Refinancing in this situation would only be helpful if it lowers your interest rate and, therefore, the payment enough to bring it in line with your budget.

Leave Your Home Without Foreclosing

Options for when you cannot stay on your property but want to avoid foreclosure include:

  • Sale With Equity: If your home is worth more than your mortgage balance, you can convert that value into cash to use when you sell. It pays off your remaining debt, and you have flexibility and control leaving your home.
     
  • Short Sale: The opposite of a sale with equity is a short sale. If your mortgage company agrees, you can sell your home and pay a portion of the balance with the revenue. You may have to make your own financial contributions, but you’ll be relieved of any remaining balances through a deficiency waiver.
     
  • Mortgage Release: Your property’s ownership is transferred to your mortgage owner in exchange for a release from your loan and payments. While it’s a loss of control, it eliminates your debt, and you may qualify for relocation assistance.

Reverse Mortgage Option

If you’re over 62 years of age, you can apply for a reverse mortgage by borrowing against the value of your home. As long as it is your primary residence and you pay all the maintenance fees, the loan does not have to be repaid.

Explore Your Options with Butler Mortgage

Regardless of what option you choose, Butler Mortgage is here to guide you and help you avoid foreclosure. For over 25 years, Butler Mortgage has worked with buyers wanting to own a home in Central Florida. Let us help you find the right loan solution for you by calling 407-931-3800 or by filling out our free consultation form online.

First-Time Home Buyer Steps and Tips

First-Time Home Buyer Steps and Tips

Buying a home and getting a mortgage loan can be a challenging experience, especially for first-time homeowners. The initial down payment, closing costs, and mortgage rates all have large price tags attached and are full of minute details that can be missed by the average customer. The last thing you want is for your first home to put you into excessive debt and set back your financial future. With the help of an experienced mortgage professional, a real estate agent, and the following important tips and steps, you can feel confident as you search for the home of your dreams.

Helpful Tips for First-Time Home Buyers

Tip #1: Start Saving ASAP

Long before you plan on buying your first house, you need to build up some savings to make your initial purchase. While there are many different options in the market allowing for a lower down payment, many first time homebuyers forget that there are closing costs as well.  Figure on adding an extra 3 to 3½% of the purchase price for closing costs. Dedicated saving can help prepare you for the down payment and other fees.

Tip #2: Choose a Smart Mortgage Plan

When looking at mortgage options, the temptation will be to spread your payments over a long period of time. Even though the monthly payments will be lower, you will end up paying far more money in the long run with a 30-year mortgage than a 15-year one.  Discuss with your mortgage professional the various term options such as 20 or 25 year mortgages if the payment on a 15 year loan is too steep. Another option is an adjustable rate loan, which can save a borrower thousands of dollars over the life of the loan.  However, if you are risk-averse and would rather have a steady payment, aim for a fixed-cost conventional loan mortgage. This will ensure that your mortgage rate will not inflate over the course of your payment schedule.

Tip #3: Find Your Dream Home

Buying a house is a long-term commitment, so it is imperative to find a place that checks off as many of your important desires as possible. Be cognizant of the location, neighborhood, local schools, and other factors that are major components of your life, not just the home itself. As the famous real estate saying goes, the three most important parts of a property are its location, location, and location.

Tip #4: Ask the Following Questions

When you’re in the market for your home, you’ll undoubtedly have questions, concerns, and no shortage of emotions. It’s no secret that purchasing a home is one of the largest financial decisions you’ll make, and of course, you don’t want to make a mistake. Therefore, it is natural to have questions regarding buying your first home, and the concerns you feel are completely natural.

Here are some of the most common questions we receive in regards to purchasing a first home, along with answers that should help ease your mind during the process.

Am I ready for homeownership?

Though there are no concrete signs that you are ready to take the plunge into homeownership, there are clues you can look out for to give you an idea. A home is a long-term investment, so being in an area that you enjoy and plan to stay in for a while is important. Being financially secure enough to take on the extra burden of home ownership is something that cannot be ignored.

Why should I buy instead of renting?

Real estate markets are ever-changing, and if you can afford it, buying a home is a much more effective investment than renting. When you buy a home, you build equity since you’re paying off the debt on your home rather than putting money in a landlord’s pockets.

How much do I need for a down payment?

Down payment amounts vary depending on the type of loan. FHA loans allow you to put as little as 3.5% down. Conventional loans are typically 5% down, although in certain cases you can put 3% down. VA and USDA offer 0% down loans and are excellent options if you qualify.

What Is PMI?

PMI, or private mortgage insurance, is a means for lenders to protect themselves if a buyer defaults on their loan. PMI is paid each month in addition to their principal to help reimburse a lender if they default. This fee is typically rolled into your monthly mortgage payment until about 20% of the loan is paid off, at which point the PMI may be canceled, as long as you have not missed any payments.

  • Are there first-time buyer programs that can help me get into a home?

Yes, there are several state grants for new home buyers that can assist with down payments, closing costs, and other home purchase related expenses. Each program has their own qualifying criteria and it is important to keep those requirements in mind when deciding on which program is right for your needs.

  • State Housing Initiatives Program (SHIP)

In the state of Florida, SHIP is available in every county. While each county offers a different version, they all provide first-time home buyers with some form of down payment and closing cost assistance. They also typically require that new home buyers complete a homeownership counseling course. For more details on SHIP, check with your county governments or speak with a mortgage company approved to work with SHIP.

  • Florida Housing Bond Programs

The Florida Housing Finance Corporation offers down payment and closing cost assistance (through approved mortgage companies) for first-time homebuyers who meet certain income and credit score requirements. The assistance can take the form of a repayable second mortgage in some instances or a forgivable grant in others.

Let Us Help You Get in Your First Home

At Butler Mortgage, we understand that buying your first home can seem like a daunting task. Thankfully, our experts are here to help. For over 25 years, we have worked with first-time buyers wanting to own a home in Central Florida. We will do everything possible to make your home buying experience as painless as possible, so you can spend less time worrying, and more time enjoying your home.

Call us today at 407-931-3800 with any questions or fill out our free consultation form online to get started on finding the right home loan solution for you.

Factors that Affect Mortgage Rates?

Factors that Affect Mortgage Rates

You want to get your mortgage rate as low as possible. With the constant market changes, however, it’s important to understand exactly what determines it. Below are a few key factors that help influence your mortgage rate. 

Credit Score and Other Finances

Your personal finances might be one of the most important things affecting your mortgage rate. Your lender will investigate your risk of default and calculate your debt-to-income ratio. The most important one they’ll look at is your credit score. Consumers with higher scores will have lower rates than those with low credit scores.

Down Payment

A larger down payment typically results in a lower interest rate. It also lowers the risk to the lender that you will default.

Home Loans

Several factors of your loan, including the amount, type and term, all play into your mortgage rate. Extremely small or large loans may have higher rates. The duration you have to pay your loan, or term, will also help. Short-term loans have lower rates, but the monthly payment may be higher. 

Type of Interest Rate

Interest rates can either be fixed, which means they don’t change, or adjustable, which will change after a set period based on the market. Adjustable rates will initially offer a lower rate, but they are a bit more unpredictable in that they could hike up depending on how the market behaves.

Secure Your Mortgage Rate with Butler Mortgage

To navigate the housing market and secure the mortgage rate you need, rely on the mortgage professionals at Butler Mortgage. We’ve been working with buyers in the Central Florida area for more than 25 years. Let us help find the right loan solution for you by calling 407-931-3800 or by filling out our free consultation form online. 

Definitive Guide to Mortgage Terminology?

Definitive Guide to Mortgage Terminology

Going over your mortgage can sometimes feel like reading a foreign language. Indeed, the industry is full of acronyms and terms which may not be easy to understand the first time around. Below are some of the most common terminologies you’ll hear in relation to your mortgage.

Common Mortgage Terms

  • Discount Points Discount points are a one-time, tax-deductible fee that borrowers purchase to lower their interest on monthly payments. Paying discount points can be a smart move if you plan on keeping your home for more than four years, or so. Ask your Loan Officer to do a break-even analysis to determine if it is wise for you to pay this fee.
  • Loan-to-Value (LTV) This ratio is the amount of the mortgage loan divided by the home’s value.
  • Private Mortgage Insurance (PMI) Paying a monthly PMI payment guarantees that a lender will not lose their investment if a borrower stops making payments. PMI is typically only required when the LTV is more than 80%.
  • Closing Costs Closing costs include payments such as appraisal and survey fees, title insurance fees, recording fees, and other amounts related to closing a mortgage. All fees, except the appraisal fee, are paid at closing along with the necessary down payment.
  • Conventional Loan A conventional loan is any mortgage not guaranteed or insured by a government program. However, such loans utilize guidelines established by the quasi-governmental agencies Fannie Mae and Freddie Mac.
  • Title Insurance – Title insurance protects the ownership of the property and is used when a lender uses the property as collateral for the mortgage to ensure the home is free of any liens.
  • Escrow – An escrow account is maintained by lenders to collect additional money for taxes and hazard insurance on the home.
  • Hazard Insurance Hazard insurance is synonymous with homeowner’s insurance and describes all the coverages under those policies, including fire, theft and other damages.
  • Annual Percentage Rate (APR) APR is a way of calculating the cost of a loan when certain closing costs are taken into account. It was designed to simplify the process of comparing one lender’s interest rate to the next, but sadly it causes more confusion in most cases.
  • Debt-to-Income Ratio This ratio is when your monthly mortgage payments plus any other financeable debt are compared to monthly income to determine risk.
  • Fixed-Rate Mortgage This common type of mortgage has a set rate and term that does not change throughout its duration.
  • VA Loan This loan is guaranteed by the Department of Veterans Affairs, or VA.
  • PITI These are the four main elements of a mortgage payment: principal, interest, taxes and insurance, or PITI.

Turn to Butler Mortgage for Superior Service

Rely on the professionals at Butler Mortgage to help you through the closing process and navigate through all the jargon. For over 25 years, Butler Mortgage has worked with both first-time and seasoned buyers in Central Florida. Let us help you find the right loan solution for you by calling us at 407-931-3800, or filling out our free consultation form online.

What Is Fannie Mae and Freddie Mac?

What Is Fannie Mae and Freddie Mac?

Fannie Mae and Freddie Mac are operations sponsored by Congress that are crucial to the mortgage industry. These private-owned corporations buy mortgages from lenders and sell to investors. This helps provide stability, liquidity and affordability to the market. Essentially, they set the standard for home loans in the United States. Here is more information about Fannie Mae and Freddie Mac and how they can help you with your mortgage. 

What Are the Differences Between Fannie Mae and Freddie Mac?

Fannie Mae and Freddie Mac are nicknames for the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, respectively. 

While Fannie Mae and Freddie Mac provide similar services, there are a few differences between the two. For example, Fannie Mae typically purchases from commercial banks, and Freddie Mac typically purchases from smaller institutions. There are different borrower and loan program requirements as well. 

The two operations also serve different purposes. Fannie Mae is much older than Freddie Mac and was originally established to give more loan funds when mortgages ran out during the Great Depression. Freddie Mac was chartered in 1970 to expand secondary mortgages. 

What Are Some Fannie Mae and Freddie Mac Programs?

Both enterprises offer programs to buyers with low or moderate income. Some of the most popular Fannie Mae and Freddie Mac programs include:

1. HomeReady

This Fannie Mae program allows buyers to purchase or refinance their homes with just a 3% down payment. Buyers need a credit score of at least 620 to qualify, and private mortgage insurance is required until equity increases.

2. HomeStyle Renovation and HomeStyle Energy

Run by Fannie Mae, these two programs allow homeowners to borrow money to make renovations. HomeStyle Energy loans must be used to improve your home’s structure or energy efficiency, and it can be combined with renovation loans.

3. HomePossible

This Freddie Mac program helps buyers who earn less than 80% of the area’s median income. Similar to HomeReady, the down payment can be as small as 3% and can come from a variety of sources.

Your Central Florida Mortgage Experts

Whether you’re looking into one of these programs or want to buy your home another way, Butler Mortgage is here to help. We’ve worked with both seasoned and first-time homebuyers in Central Florida for more than 25 years. If you need help owning a home, fill out our free consultation form or call us at 407-931-3800 to start your mortgage journey.

How to Improve Home Resale Value?

How to Improve Home Resale Value

There are several projects homeowners can take on to increase both their property’s value and enjoyment. Here are a few modifications you can make to improve your home’s resale value. 

Add New Appliances

Technology is constantly evolving. Many homeowners now use smart devices for both convenience and increased security. Some examples of smart devices for your home include smart locks, cameras, doorbells, garage door openers, thermostats, and smoke and carbon dioxide detectors. If you’re thinking about updating your entertainment system, there are also smart lighting and sound systems that can easily be installed to make your living space more attractive.

Landscape Your Yard

A well-landscaped exterior can increase your property’s curb appeal and resale value by anywhere from 5-15%. Minor changes, such as planting trees and gardens or adding outdoor lighting, will impress buyers who like to spend time outside. Larger changes like firepits, patios, and decks are also appealing and provide a big return at a minimal cost. While pools may be a major investment, they can also boost your home’s resale value. 

Increase Your Square Footage

Adding extra rooms to your house is a big investment that could take lots of time and construction. However, it can also provide major value to your home. Creating a garage or adding an extra living space will boost your home’s value significantly. More rooms will be beneficial to buyers looking for plenty of space. 

Renovate Your Home

Updating your home’s interior design is often the easiest way to improve your home’s resale value. To add value, there are several minor renovations that can be done in your home’s kitchen and bathroom, including repainting, replacing light fixtures, or updating appliances like faucets and sinks. While these changes are mostly cosmetic, it’s a great way to modernize an old home and make it feel like new to potential buyers. 

Fund Your Home Improvements with Renovation Loans

Regardless of which project you choose, there are several financial assistance options available to homeowners looking to remodel. Butler Mortgage offers several loans to help you fund your renovations, including:

  • CHOICERenovation loans
  • HomeStyle Renovation loans
  • Cash out refinance loans

Butler Mortgage has worked with buyers in the Central Florida area for more than 25 years. Let us help you find the right loan solution by filling out our free online consultation form or calling 407-931-3800.

Mortgage Tax Deductions for Homeowners

Mortgage Tax Deductions for Homeowners
Tax deductions can help by lowering the amount of taxable income you have to pay on.

Tax deductions can help by lowering the amount of taxable income you have to pay on. If you’re a homeowner with a mortgage, a mortgage interest deduction could similarly benefit you. Here are some ways to navigate mortgage tax deductions when filing your tax return. The information contained below should not be construed as tax advice. It is general guidance only and should always be confirmed with your tax professional.

What Is a Mortgage Interest Deduction?

A mortgage interest deduction is an itemized tax incentive to help homeowners reduce their tax burden or increase their refund. This deducts interest paid on any loan used to build, purchase, or improve your home from income taxes. You can also sometimes claim this deduction on mortgages for second homes or vacation homes, as long as it’s within limits. This amount is reported each year by your mortgage company on the Form 1098.

How Do Mortgage Interest Deductions Work?

Mortgage interest deductions depend on when the mortgage began, how much it is, and how the mortgage is used. The deduction can only be taken if it’s a secured debt, meaning you’ve pledged your home as collateral.

Once you’ve met qualifications, you’ll know how much mortgage interest is paid by reviewing Form 1098 and reporting it on line eight of the Schedule A form, which is a list of various deductions, including medical bills, taxes, and charitable donations. If you have a rental property, you can deduct that interest as well by reporting it on the Schedule E with supplemental income. Usually, homeowners can deduct the entire mortgage interest paid amount.

What’s Included in a Mortgage Tax Deduction?

Mortgage tax deductions can cover a variety of mortgages. All of the following qualify as a mortgage tax deduction:

? Interest on primary or secondary mortgages

? Mortgages on home equity loans

? Mortgage insurance premiums

? Prepaid or discount points

What’s Not Included in a Mortgage Tax Deduction?

While mortgage income taxes are a deductible expense, there are several aspects of home ownership that are not. Here is what you can’t include as a mortgage tax deduction.

? Homeowners insurance and premiums

? Principal payments

? Deposits or down payments

? Utilities and domestic services

? Title insurance

Your Central Florida Mortgage Experts

If you’re looking into buying a Central Florida home, consider financing through Butler Mortgage. We’ve worked with both first-time and seasoned buyers for more than 25 years to help them own their dream property. To find the right loan solution for you, call us at 407-931-3800 or fill out our free consultation form online.

What Homeowners Can Expect AFTER Closing

What Homeowners Can Expect AFTER Closing
Your loan officer will ensure all your financial statements are accurate and the necessary paperwork is ready for closing.

Closing on your home is an exciting time that is the culmination and celebration of months of hard work. However, home ownership doesn’t end at the closing table. Here are a few things for homeowners to expect in their first year post-closing.

What to Expect on Closing Day

On the day of closing, your loan officer will be working around the clock to make sure everything is in order. They’ll ensure all your financial statements are accurate and the necessary paperwork is ready. Once you sign, the paperwork is double-checked. Your title company then transfers the money and you officially own a new home.

What to Expect in the First Month After Closing

Once you move in, your insurance and mortgage companies will begin to reach out. Your title company prepares an insurance policy and sends it to you within 30 days of closing. This policy protects you in case there is something wrong in your title. Additionally, you should receive the details of your mortgage within the first month. This information will be in a first payment letter, which is typically due one month after you close.

Other Post-Closing Events to Expect

There is still a long list of to-dos to complete once you make your first mortgage payment, especially in the first months of the year. If your new home is your primary residence, file a homestead exemption to receive a tax break.

Tax season runs February through April, and it’s a busy time of year. There are several mortgage tax breaks you can take advantage of, including a mortgage interest deduction. Your escrow account, which holds funds related to property taxes, will send you its yearly analysis around February.

Finally, your county will send its yearly property assessment (in Florida it is called a TRIM notice) in August. If you feel like it’s too high, you may want to consider contesting it.

Refinancing

Keep an eye on the economy and make sure to contact your Loan Officer if you notice that interest rates have improved. You may be able to save on your monthly payments by refinancing your loan. Even if rates are the same or higher, you may still benefit by taking cash out for home repairs, a daughter’s wedding, college expenses, or other debt consolidation.

Enjoy Homeownership with Butler Mortgage

Buying a home can be an exciting and intimidating process. If you’re a first-time homeowner in Central Florida, consider financing through Butler Mortgage. Our mortgage experts have worked with both first-time and seasoned homeowners in Central Florida for more than 25 years. Let us help you find the right loan solution for you by calling 407-931-3800 or by filling out our free consultation form online.

What You Need to Know About Mortgage Default

Mortgage Default document

Even if you’re a financially savvy individual, life can always throw you a serious curveball. Layoffs, unexpected illnesses, losing a loved one: there are any number of life events that can lead to financial uncertainty. If such unfortunate circumstances have befallen your household, then it can be difficult for you to cover all of your bills, including your mortgage payment.

When you begin to miss mortgage payments, you risk defaulting on your mortgage. Worst case scenario, this can result in the loss of your house. While this can be an incredibly stressful event, there are ways you can plan to prevent a mortgage default. Here is what you need to know about mortgage default.

What Is Mortgage Default?

When the borrower on a home loan fails to consistently make their monthly principal and interest payments, mortgage default occurs. The negative consequences can be serious for the borrower.

Not only could you possibly lose your home and have your credit score significantly damaged, but there can be especially damaging long-term repercussions: mortgage default can increase your interest rate across any other debts, and seriously challenge your ability to get any future loans.

3 Ways to Avoid Mortgage Default

Mortgage default doesn’t happen instantly. While the prospect of a mortgage default can be stressful, there are several steps you can take to avoid it.

  1. Contact your lender. As soon as you know you’ll be unable to make a monthly payment, contact your lender immediately. The sooner you do this, the higher your chances of avoiding a mortgage default. Explain your situation, as many lenders are willing to work on solutions with their borrowers. Among these options is mortgage forbearance, which allows a reduction or pause in payments (which you will still need to repay).
  2. Contact the Department of Housing and Urban Development (HUD).  If a forbearance isn’t offered to you, there are HUD counselors who can discuss possible options and mortgage default solutions. There may be a state or federal program available to assist you, as well.
  3. Inquire about a refinance. Should you qualify, a refinance can help you avoid defaulting on your mortgage. The refinance can act as a “reset” to a longer term with a lower monthly payment, which is more manageable for your budget.

Contact the Mortgage Professionals at Butler Mortgage

If you are worried about changing financial circumstances and concerned that you will not be able to make your mortgage payment,  contact the professionals at Butler Mortgage. They will help you navigate the process and see what options are available to get you back on track, such as securing a new loan at a desirable mortgage rate.

For over 25 years, Butler Mortgage has worked with both first-time and seasoned buyers wanting to own a home in Central Florida. Let us help you find the right loan solution that fits your budgetary needs by calling 407-931-3800 or by filling out our free consultation form online.

Guide to VA Loans

Close-up shot of a VA loan

Millions of Americans are eligible for home financing with a VA home loan. If you’ve served, or are currently serving, in the U.S. Army, Navy, Marine Corps, Air Force or Coast Guard, your nation thanks you by offering a myriad of veterans’ benefits, one of which is a VA loan which provides access to government-sponsored mortgages for purchasing homes or refinancing existing loans.

What Is a VA Loan?

A Veterans Affairs (VA) loan is a home financing loan backed by the Department of Veterans Affairs for eligible veterans, active military members, surviving spouses, and other applicants to use when purchasing a new home or refinancing an existing mortgage.

How to Qualify for a VA Loan

Basic requirements to qualify for a VA loan include:

  • Meeting the minimum qualifications for credit and income that private lenders require.
  • Holding a legitimate Certificate of Eligibility (COE) as the result of your service.
  • Being the unmarried surviving spouse of a veteran who died, is missing in action, or who is a prisoner of war.
  • Being the surviving spouse of a completely disabled veteran.
  • Paying your previous VA loan in full or another veteran purchaser agrees to assume the responsibility for the remainder of the loan.

VA Loans Benefits

As long as the applicant meets the terms of the VA loan, it remains one of the most economical financing arrangements available in the real estate market today. Here are some of the benefits of a VA home loan:

  • No down payment – VA loans do not typically require you to provide a down payment, unlike traditional loans that can require a minimum down payment of up to 20%.
  • Lower interest rates – While interest rates on VA loans fluctuate with market conditions, they average among the lowest of any type of mortgage loan—typically a quarter of a percent lower than conventional interest rates.
  • No prepayment penalties – With a VA loan, you are free to pay your loan off early with no financial penalty.
  • Loan program versatility – In addition to purchasing a home or condominium in an approved location, veterans can use the loan program to build new homes, improve pre-existing homes with energy-efficient renovations, or purchase pre-built homes
  • Foreclosure avoidance advocacy – The VA loan program provides VA staff members who advocate on behalf of homeowners to find alternatives to foreclosure.
  • Potential help with closing costs – Sellers can pay all of a buyer’s loan-related closing costs and up to 4% in concessions, which is typically negotiated at the time of contract signing.
  • No private mortgage insurance – For traditional loans, where the down payment is less than 20%, the lender requires the borrower to purchase private mortgage insurance (PMI)—a monthly fee over and above your principal and interest payment. No monthly PMI is required for a VA home loan. Also, if the veteran is disabled, the up-front VA funding fee is completely waived.


Your Central Florida VA Loan Experts

If you have questions about your VA loan eligibility, speak with one of the VA loans specialists at Butler Mortgage.

Whether you’re looking for a VA loan for your first home, or you’re using your loan entitlement to purchase another home, our team of loan professionals will guide you through the optimal mortgage options for your finances. We also offer a free, VA loan pre-qualification screening for veterans.

For more information or to see if you pre-qualify for a VA loan, call Butler Mortgage today at 407-931-3800.