Author: erick.merced

How To Get Your Home Ready for Renters

How To Get Your Home Ready for Renters
Home For Rent Sign in Front of Beautiful American Home

Purchasing a rental property can be a great investment; however, there is a lot that must be done to properly prepare a space for renters. As a rental property owner, you should apply the following tips to get your home ready for renters. 

Invest in a Professional Cleaning

Before you welcome potential tenants to even view your rental home, be sure to give the premises a deep cleaning comprised of more than just your usual routine. A thorough, top-to-bottom cleaning should include:

  1. Cleaning and steaming the carpets to remove stains
  2. Changing the air filter and cleaning air ducts to remove dust and allergens
  3. Scrubbing tile floors, bathtubs, showers, toilets, sinks, baseboards, and molding until they shine 
  4. Pressure washing exterior walls, windows, sidewalks, and driveway to remove dirt and grime

If you don’t have the equipment to complete such tasks, you may want to consider hiring a professional cleaning company to ensure each job is properly done. 

Perform an Inspection

Be sure to give your property a comprehensive inspection to ensure that everything looks its best and functions properly. While a professional inspection should be conducted before renters move in, you will want to personally check each of the following items and areas of your home to ensure they are in good shape and don’t require repair, replacement, or renovation: 

  1. Appliances 
  2. Ceilings
  3. Doors
  4. Floors
  5. Roofing
  6. Interior and exterior walls
  7. Windows 
  8. Toilets, baths, showers
  9. Various utilities (electrical, HVAC, plumbing, hot water heater) 

If you notice that any of these areas have cracks, mold, water damage, or are compromised in any way, be sure to make the proper repairs before renting out your property. 

Review Your Rental Property Mortgage

Remember to review your mortgage before advertising your rental property. Depending on your mortgage type, you may need to notify your mortgage company of your plans before renting out your property. If you need help understanding your mortgage, the experts at Butler Mortgage are here to help. 

Your Central Florida Mortgage Professionals

When you need assistance with your mortgage, contact Butler Mortgage. We have been serving both first-time and seasoned home buyers in the Central Florida area for over 25 years and have the experience and expertise necessary to answer your questions regarding your loan contract. For more information on our excellent services or to sign up for a free consultation, fill out our online form or call us today at 407-931-3800. 

What Is a Real Estate Purchase Agreement?

Buying or selling a home is a major milestone to meet and be proud of, but the process can feel overwhelming if you’re unsure how to navigate through the legal components, such as signing a real estate purchase agreement. Also known as a real estate sales or purchase contract and a home or house purchase agreement, the real estate purchase agreement is a contract that is signed when home property is transferred from one person to another. 

What Makes a Real Estate Purchase Agreement?

Every buying or selling contract is different. However, since the purpose of a real estate purchase agreement is to outline the details of a home transaction, the following are typically outlined:

  1. Information about the buyer and seller
  2. Details on the property, including fixtures or appliances in the sale 
  3. Specifics on pricing, closing cost responsibility, and borrower financing 

What To Know Before Signing a Real Estate Purchase Agreement

While the above outlines are relatively clear, other components of the agreement may seem more complicated, especially for first-time buyers or sellers. Before you sign the contract, know the following: 

  • Contingencies: The following conditions must be met before a sale is made.
    • Financing contingencies: Tells the seller how the buyer will obtain financing and protects the buyer if they can’t secure a mortgage
    • Inspection contingency: Calls for a professional inspector to assess the home and lets the buyer leave without penalty if they aren’t satisfied with assessment
    • Appraisal contingency: Explains that the home needs to appraise at or higher than the sales price
    • Home sale contingency: Included when this new home purchase will only be possible when the buyer sells their current home 
  • Earnest money deposit: Also known as a good faith or escrow deposit, earnest money deposits let sellers know that buyers are serious about purchasing a home. Since it’s typically held in escrow and credited toward the down payment or closing costs, the deposit can also protect the seller if the buyer backs out. 
  • Closing costs: These are fees that are paid at the end of the buying process, which can include agent commission, appraisal and inspection fees, taxes, lenders fees and insurance. 

Lastly, the buyer will propose an offer price within the contract, which can be negotiated between the buyer and seller. Once both parties agree and sign off on the contents of the contract, they will be considered “under contract.” 

Butler Mortgage Will Support You in the Process

If you need help understanding real estate purchase agreements, our experts are here to support you. At Butler Mortgage, our mortgage professionals can match you with affordable home financing loans at desirable rates so you can complete the Central Florida home buying process. 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.

How To Sell a Home That Needs Repairs

Anyone placing their house on the market will want to ensure their home is in the best condition possible. However, those who need to sell a house quickly may have unresolved home repairs that they either don’t have the time or money to address. They may worry that such issues will scare off potential buyers and jeopardize their opportunity to sell. Fortunately, for homeowners concerned about trying to sell a home that needs repairs, there are a few options.

Sell Your Home That Needs Repairs as-Is

Selling a house as-is allows you to be upfront and honest with potential buyers about the condition of your house. When you sell a house as-is, you don’t spend any money on any of the needed repairs, but you will likely have to accept a lower asking price. On the upside, houses being sold as-is are often very attractive to investors and flippers. 

Focus on Completing Minor Repairs

If you don’t have a lot of time but you are willing to do some repairs, consider focusing on a few minor, cosmetic fixes. These repairs are typically low-cost and don’t take a lot of time. Completing them will ultimately improve the general curb appeal of your house and can help you maintain a higher asking price.

Going for the Big-Ticket Repairs and Upgrades

Most potential buyers are okay with having to do a few small fixes themselves. However, they are likely more concerned about and less willing to inherit expensive, big-ticket repairs and upgrades. If you have the time to take care of some larger repairs and are willing to spend the money, consider investing in the following recommended areas:

  1. Roof replacement
  2. Foundational damage repair
  3. Mold remediation
  4. HVAC upgrade
  5. New hot water heater

If you are making these repairs in order to sell your home, consider contacting a local bank for a second mortgage or home equity line of credit (HELOC) to help you pay for the repairs. If you are not thinking about selling your home and are having difficulty financing any of these desired repairs or home upgrades, consider contacting the professionals at Butler Mortgage for help. 

Your Trusted Home Lending Experts

The professionals at Butler Mortgage can help match you with affordable loans at desirable rates that can finance your home improvements. For the past 25 years, Butler Mortgage has been serving the Central Florida community by working with both first-time and experienced home buyers in helping them own homes in the area. If you are looking for help finding the right loan solution for you, fill out our online form for a free consultation or call us today at 407-931-3800. 

Things to Know When Refinancing

  • Things to Know When Refinancing

Refinancing: The process of replacing an existing loan with a new one. When homeowners refinance, they repeat the mortgage process they completed when they first purchased their home, but instead of buying a new home, they get a new loan. If you’re a homeowner considering refinancing, below are key tips to consider. 

Why Refinance? 

When refinancing, your new loan can come with financial incentives, including lowered interest rates, lower payments, and home equity access. If you’re looking into refinancing your home, first decide which options best help your circumstance. Consider the following questions:

  • What will the repayment period look like? Would a longer or slower mortgage term work best for me? 
  • Will taking on lowered interest rates reduce overall interest costs?
  • Which refinancing options are best for me to build home equity? 
  • What are my cash-out refinancing options? Will they help me pay for other life expenses?
  • Do I want to remove someone else’s name from the loan through refinancing? 
  • Do I have real estate taxes or homeowners insurance I want to pay off? Will refinancing help with those payments? 

What Will the Refinancing Process Look Like?

After you’ve analyzed your refinancing options, you’ll find that the next steps in the process are similar to when you first bought your home, minus the real estate agent and down payment costs. In fact, because there’s less paperwork and people involved, the refinancing process may seem even easier than your home buying process. 

First, you’ll fill out an application that requires the same information you provided when buying your home, which may include income, employment, and credit score verification. From there, your refinance closing may take from 2-4 weeks. Along the way, you may need to fill out additional information, depending on the needs of your lender. You should also expect to pay some closing costs at closing, unless you decide to have such costs rolled into your new loan amount.

What Help Is Available? 

Even if you are familiar with financing a home, how long your refinance takes depends on the experience and efficiency of your lender. For over 25 years, the professionals at Butler Mortgage have been helping Central Florida homeowners through the homebuying and home refinancing process by matching them with affordable loans at desirable rates. Let us help you take the first steps towards refinancing your home by calling 407-931-3800 or by filling out our free consultation form online.

Important Homebuying Lingo You Should Know

Important Homebuying Lingo You Should Know

Navigating the homebuying world can be tricky, even if it isn’t your first time dealing with a mortgage. There may be lots of acronyms and jargon that get thrown around during the process, but what do any of them mean? To avoid confusion and help you buy a home like a seasoned pro, here is a handy guide explaining some important homebuying lingo that you should know.

Homebuying Acronyms to Know

  • APR: Annual Percentage Rate. This is the interest rate you pay on a loan annually.
  • ARM: Adjustable Rate Mortgage. An ARM is a type of mortgage with an interest rate that can either be increased or decreased, depending on certain factors. An ARM often starts with low interest rates, then is adjusted based on the standard financial index set from either the Federal Reserve or the London Interbank Offered Rate.
  • CD: Closing Disclosure. This is a form provided to you by your lender at least three days before closing. It outlines the final terms and cost of your mortgage. This form is extremely important and must be thoroughly examined to make sure you’re aware of every condition before closing.
  • DTI Ratio: Debt-to-Income Ratio. Lenders look at this to see the percentage of your monthly gross income paid toward your monthly debt payments.
  • FICO and BEACON SCORES: FICO scores were first developed by the Fair Isaac Corporation for Experian, one of the three main credit bureaus, while Beacon was developed specifically for Equifax. The third credit bureau, TransUnion, also has their own scoring model. These scores are used to determine a homebuyer’s credit risk. Typically, a mortgage company looks at all three scores and uses the middle one.
  • FHA: Federal Housing Administration. The FHA is a government agency that offers assistance by insuring loans so lenders can get better deals. They also set standards for construction and underwriting.
  • LE: Loan Estimate. This is a document provided to you at the beginning of the loan process. It shows a breakdown of your estimated costs including interest rate, loan amount, and closing fees.
  • LOX: Letter of Explanation. While not always necessary, a LOX can be used by you to explain anything in your financial or employment documents that may be concerning. This often includes unusual activity in credit reports or bank statements.
  • LTV Ratio: Loan-to-Value Ratio. The LTV ratio compares the loan amount to the market value of the asset. Lenders look at this to determine the risk factor for taking on a loan.
  • PITI: Principal, Interest, Taxes, and Insurance. All four of these factors come together to equal your monthly mortgage payment.
  • PMI / MIP: Private Mortgage Insurance (or Mortgage Insurance Premium for FHA loans). This is a type of insurance used to protect the lender if mortgage payments aren’t made. PMI is typically required if your down payment is less than 20% of the purchase price, while MIP is required for all FHA loans.
  • POC: Paid Outside of Closing. POC’s are any payments that are typically paid before closing, such as the appraisal fee.

Get to Know the Experts at Butler Mortgage

With over 25 years of experience, Butler Mortgage has worked alongside many Central Floridians — from first-time purchasers to seasoned homebuyers — to achieve the dream of owning a home. And we’d be happy to assist you in securing financing for your dream home. To find out more about our services, call us today at 407-931-3800 or fill out our free consultation form online.

Understanding the Right of Rescission

Understanding the Right of Rescission?

When purchasing a home, the homebuyer can expect the transaction to be finalized at the time of settlement, or once both parties have executed all documents and the lender issues a funding authorization. However, for certain transactions, most notably refinances, the loan is not officially funded until the borrower’s right of rescission has passed. The right of rescission allows a homeowner to cancel a refinance of their primary residence, a home equity loan, or a home equity line of credit AFTER the loan has closed — but they only have a short window to do so. In fact, the homeowner has until midnight of the third business day after closing to cancel. 

How the Right of Rescission Is Determined

The rescission period begins the day you receive your notice to rescind (or right to cancel), which is one of the documents you will sign at closing. The customer then has three business days to re-evaluate what they just signed and must notify the settlement agent if they choose to cancel the transaction. Most, but not all, lenders consider Saturday to be a business day. Sundays and the following 10 federal holidays are not considered business days.

  1. New Year’s Day
  2. Martin Luther King Jr. Day
  3. Presidents Day
  4. Memorial Day
  5. Independence Day
  6. Labor Day
  7. Columbus Day
  8. Veterans Day
  9. Thanksgiving Day
  10. Christmas Day

Many customers who refinance their homes do so to take out cash equity to pay for home repairs, college expenses, a wedding, or to consolidate debt. If you expect to get the money immediately upon closing, it is important you understand this federally mandated delay in the funding process.

Contact the Experts at Butler Mortgage

Whether you need help understanding the rescission process or just need information about refinancing or buying a home, the team at Butler Mortgage is happy to help. At Butler Mortgage, we’ve worked with Central Florida homeowners for over 25 years — and we can help you get the loan that works best for your financial situation. If you’re interested in a free consultation, call us at 407-931-3800 or complete our free consultation form on our website.

What Is an Appraisal Contingency?

What Is an Appraisal Contingency?

Once you find your dream home, there are quite a few financial details you’ll need to take care of. Today, we’re going to help you get one step closer to financing by demystifying the appraisal contingency. 

What Is an Appraisal Contingency? 

An appraisal is a process that determines the fair market value of a home, and a contingency is a condition that has to be met before something can proceed forward. Therefore, an appraisal contingency is a condition that is set into place so that if the home you are interested in doesn’t appraise for the amount you intend to pay, the offer does not proceed forward and you can walk away with your deposit. 

What Does an Appraisal Contingency Do?

The most important function of an appraisal contingency is that it protects you financially. First and foremost, it allows you to receive back a deposit if new information determined by the appraisal process makes it so that you no longer want to participate in the sale. If you don’t have a contingency in this situation, you lose your deposit money. 

A buyer and seller can negotiate just about any type of contingency when executing a contract, but these are the three most common types: 

  1. Appraisal Contingency – As explained above, an appraisal contingency includes the process of getting the home appraised. If the appraisal value comes back lower than originally assumed, this gives you leverage to try and negotiate the price down. 
  2. Financial Contingency – This type of contingency protects you as a prospective homeowner in case funding is not able to be attained for your mortgage. With the protection of a financial contingency, you don’t have to worry about being locked into the sale until you get an approval letter from your mortgage company. 
  3. Inspection Contingency – An inspection contingency is all about home inspections. It protects homeowners from being locked into a sale unless the prospective home passes any and all inspections, which may include foundation, roof, HVAC, mold, and pest. 

Real estate agents usually recommend that you include a combination of contingencies when you become serious about purchasing a prospective home. 

What Are the Benefits of an Appraisal Contingency? 

So, what are the advantages contingencies provide for a prospective homeowner? Other than protecting you from being locked into a purchase, the most important benefit is that contingencies prevent you from overpaying for a home. Contingencies of all kinds can bring to your attention potential cost discrepancies, and these can be used as leverage when you want to negotiate for a lower price. 

Your Appraisal Experts

Working through the financial part of purchasing a home can be stressful. Fortunately, the mortgage professionals at Butler Mortgage can help you complete the home buying process by matching you with a loan that finances your dream home at an affordable rate. With over 25 years of experience, our mortgage experts have worked with both new and experienced buyers looking to own a home in Central Florida. Whether you are searching for homes in and around Orlando, or anywhere in the state of Florida, let us help you find a loan solution that’s just right for you. To schedule your free consultation, call us today at 407-931-3800 or fill out the free consultation form online. 

What Costs Do I Face as a Home Seller?

What Costs Do I Face as a Home Seller?

Homeowners understand the time, energy, and costs that go into buying a home, but when it comes time to sell their home, they may not be as prepared. Whether it’s making repairs and upgrades to increase a home’s value, or taxes that need to be paid, there are potential costs that homeowners must realize when selling a home. 

Home Repair Costs

Before putting your house on the market, there may be some repairs that need to be made. Patching holes in the walls, painting, replacing faulty appliances, and making sure there are no leaky showers and faucets will make your home more attractive to a buyer. If you aren’t up for making repairs, there is always the option of crediting your buyers with money to make the repairs themselves. 

Taxes 

There are two types of taxes that homeowners may have to pay when selling their home.

 

  •   are often paid annually and will be prorated for the amount of time you have owned the home. Therefore, if you sell your house on July 1st, you will be responsible for taxes from January 1 through June 30, while the buyer of the home will be responsible for the rest of the year. 

 

 

  • Capital Gains Taxes are calculated after you sell your home and make a profit. You may be able to exclude $250,000 if you file your taxes individually or $500,000 if you file with a spouse. Make sure to consult with a tax professional if you anticipate a large gain from the sale of your home.  

 

Real Estate Agent Fees 

Real estate agent commission fees are usually 6% of your selling price. While there are discount brokers out there, remember that, just like with other aspects of life, you get what you pay for. Trusting a local, professional real estate professional usually pays off by getting good representation and potentially a higher price for your home. 

Closing Costs 

Common closing costs include title insurance, transfer taxes, homeowner’s association fees, and property taxes owed for the amount of time you lived in the home. Buyers may be asked to pay for some of them, but it is likely that as a seller you will have to contribute to the costs. 

Butler Mortgage Can Help 

The process of transitioning between homes can become costly and overwhelming. Thankfully, Butler Mortgage has been working for over 25 years to make the home buying and selling process more comfortable and seamless for all parties involved. Let us help you through your journey by calling 407-931-3800 or by filling out our free consultation form online.

6 Questions to Ask Your Mortgage Lender

6 Questions to Ask Your Mortgage Lender

Purchasing a home may seem like an intimidating process, especially if you are a first-time buyer. To ease the stress of buying a home, ask your mortgage lender these six questions: 

  • How Do I Determine My Homebuying Budget? 

Before setting your sights on a house, you need to know what you can afford. When setting a homebuying budget, it’s important to have a seasoned mortgage lender review your finances including your assets, credit, income, and existing debt. Once your financial evaluation is complete, your lender can determine which loan and rate best fits your needs. More importantly, a good lender will help you determine not only what you qualify for, but what payment amount fits within your comfort level. The lender’s goal is to make sure you obtain the house of your dreams while ensuring you do not stay up at night worrying about high payments.

  • What Is the Interest Rate? 

Mortgage interest rates can vary based on your credit score, down payment, and the location of the home you are purchasing. Be sure to work with your mortgage lender to find the lowest rate for your particular mortgage program. 

  • Which Loan Should I Choose? 

There are a variety of different loans available to homebuyers. Which loan is best for you largely depends on your specific financial situation. Common loan types that you may qualify for include: 

  1. Conventional mortgages (fixed or adjustable)

  2. FHA loans 

  3. USDA loans 

  4. VA loans 

Your mortgage lender will consider your loan qualifications and discuss with you each respective loan’s terms and interest rate before matching you with a loan that best suits your needs. 

  • What Credit Score Is Needed to Qualify for a Loan? 

Credit scores measure the likelihood of your ability to repay your loan. While different loans require different credit scores, the higher your credit score, the better your chances of loan approval. Conversely, if you have a lower credit score, your loan options may be limited. A credit score of 700 or above is considered good for loan approval; however, if you are well below that number, there may still be plenty of loan options available to you. When determining your loan options, your mortgage lender will factor in your credit score and discuss which programs you qualify for.

  • How Much Should I Put Down for a Down Payment? 

The amount you need for a down payment can vary depending on which loan you’re taking out. Despite popular belief, not all loans require a 20% down payment. With certain government loans, it’s possible to put as low as 0 – 3% down on a home. Your mortgage lender will be able to assist you in determining how much you need for a down payment.  

  • What Is a Rate Lock? 

It’s not uncommon for interest rates to adjust during the process of buying a home. A rate lock allows you to keep the same interest rate throughout the home buying process, regardless of changes in the market. If you currently have a low interest rate, you can ask your mortgage lender to lock your rate, so you don’t have to worry about spikes in the market. 

Butler Mortgage: The Right Answer to Your Loan Questions

For over 25 years, Butler Mortgage has been working hard to find the best loan programs for both new and experienced home buyers in Central Florida. We can help answer all of your questions and determine the best loan for you. Call us today at 407-931-3800 to schedule your free consultation.  

What Factors Determine Home Loan Rates?

What Factors Determine Home Loan Rates?

Buying a home is an exciting milestone in anyone’s life. As a homeowner, you are free to decorate your home as you wish and are no longer tied to any rental obligations. However, when it comes to financing a home, there are many factors at play that can affect the interest rate you obtain on a loan. While there are many determinants, here are three factors that can impact home loan rates.

  1. Loan Program

There are numerous mortgage loan programs such as Conventional, FHA, VA, and USDA loans. Depending on investor’s appetites for specific loans, rates can rise or fall throughout the year. There are times when Conventional interest rates are more attractive than FHA rates, but that scenario is flipped at other times. Things like the stock market, consumer confidence, housing starts, and even unforeseen events like the pandemic all play an integral role in the interest rates affecting homebuyers and refinancers.

  1. Property Type and Occupancy

The type of property you intend to purchase can have an impact on interest rates. For example, the rates for mobile homes or condos may be higher than for single family, detached homes. Whether you plan to live in the home as your primary residence or not can also affect your rate. The rates for rental properties can be significantly higher than rates for primary residences since they are seen as a higher risk class. Second homes (or vacation homes) typically have the same rates as for primary residences, but require a higher down payment.

  1. Credit Scores

Credit scores can also affect the price you pay for loan rates. Lenders pay close attention to your credit history and your credit scores are a good indication of whether you will repay your loan or not. If they believe, based on your credit history, that you can pay your loans, they will be able to obtain lower loan rates for you. If you feel as if your credit score is low, there are several ways to improve this. Consult with your lender to find ways to boost your scores before locking in an interest rate.

Lock in at a Low Rate

Although these are just a few factors, there are other variables that can affect loan rates. One solution that will limit uncertainty is to lock your rates while they are low. Once you have a contract for a new home or decide to refinance your existing loan, speak with your lender about locking right away.

Right now, we are experiencing historically low rates. If you are looking to buy a home or refinance your existing one, rely on the experienced professionals at Butler Mortgage. With over 25 years helping buyers finance homes, we can help you find the right loan solution for your needs. To learn more, call us today at 407-931-3800 or fill out our free consultation form online.