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The Benefits of Freddie Mac’s CHOICERenovation Loan

The Freddie Mac’s CHOICERenovation Loan is a great solution for potential homeowners who are looking to buy a property that they must repair and renovate. Potential homeowners looking at “fixer-uppers” can really benefit from this loan that allows them to roll in the costs of renovations into their new mortgage. This saves time and money for a new homeowner and helps maintain and give selling potential to properties in need of repairs across the country.

The CHOICERenovation loan can also be used to repair properties that have been damaged from natural disasters when they include repairs that will prevent future damage. This loan is meant to help the aging housing supply across the country and expand buying opportunities for first-time homeowners.

Is This Loan Right for Me?

While the Freddie Mac CHOICERenovation loan is open to all eligible borrowers, there are certain people who can benefit from it more than others such as:

First time homebuyers looking to stretch their budget and expand their options to properties they would not normally consider because they could not afford to finance the repairs.
Buyers in rural communities where the home supply is less than its major city counterparts.
Aging homeowners who are looking to finance repairs while staying in their homes.
Homeowners who plan to keep their home for multiple generations and want to spend money customizing renovations tailored to their living style and preferences.

How CHOICERenovation Works

A borrower can finance repairs that cost up to 75% of their home’s value after renovation. A qualified lender can help borrowers narrow down these figures and customize estimates based on the properties the borrowers are interested in. The key is whatever figure you are aiming for, you must be credit worthy to qualify.

Freddie Mac’s CHOICERenovation loan uses the same debt-to-income ratios that most lender and mortgage programs are based upon. However, it expands your options as a homebuyer and should be considered when shopping around for your new property.

Your Choice for Superior Mortgage Lending

If you need assistance finding the right loan to help fund your home repairs, then contact Butler Mortgage. With over 25 years’ experience, the professionals at Butler Mortgage can help you find the best loan solution to satisfy your needs. To get started, call us today at 407-931-3800 or fill out our free consultation form online.

Factoring Property Taxes Into Your Mortgage

Like insurance, property taxes are often a forgotten part of a mortgage payment. Property taxes can go up as time goes on as the value of your home rises. Therefore, considering this aspect of your mortgage payment before you buy can help save you money and frustration when choosing your new dream home.

How Are Property Taxes Calculated?

There are two factors that determine how much you will pay in property taxes on your new home:

Your local county tax rate
Your property’s total assessed value

Multiplying your property’s assessed value rate by the county tax rate will provide you with your yearly tax payment.

How Do I Pay My Property Taxes?

Homeowners who take out a typical 30-year fixed rate mortgage will not usually pay the property taxes directly to the government, but rather will have an escrow account setup with their mortgage provider who will pay the taxes on their behalf. The reason for this is because the lender has a vested interest in your home and does not want the government placing a lien on their collateral.

Therefore, when you take out a mortgage, expect to have one consolidated bill from your mortgage provider that includes:

Mortgage (principal and interest)
Mortgage insurance (if applicable)
Property tax
Home insurance (flood insurance if applicable)

Since the total mortgage payment is made up of all of these amounts, potential homeowners must factor these bottom-line figures into how much house they can comfortably afford.

Tax Rates in Florida Vary

Hillsborough County, which includes Tampa is reported to have the highest median property tax for any county in Florida. However, Orlando, located in Orange County, has the highest medium median property taxes for a city in all of Florida. On average, the property tax rate in Florida is 1.1 percent of the assessed value, although that can fluctuate depending on where you live. Even more reason to not overlook the impact that taxes have on your property purchase.

Homestead Exemptions

If you are planning to make the home your primary residence, Florida allows you to obtain a $25,000 exemption, called a Homestead Exemption. This lowers the assessed valuation causing your property taxes to be reduced. You can apply for this exemption with your county after January 1st following the year in which you purchased the property.

Get the Best Rates at Butler Mortgage

Don’t let property taxes deter you from owning a home. Contact the mortgage professionals at Butler Mortgage. We have over 25 years’ experience working with buyers who want to own a home in the Central Florida area. Let us help find you the best loan solution for your needs by calling 407-931-3800 or by filling out our free consultation form online.

The Difference of Being Preapproved vs. Prequalified for a Mortgage

If you’re a first-time homebuyer, applying for a mortgage may seem overwhelming, or at the very least, foreign to you—especially when there are so many terms and conditions. For instance, many borrowers are confused about what it means to be preapproved for a mortgage as opposed to being prequalified. If you can relate, rest assured that you’re not alone. Here is some insight to help you understand the difference between each term and how they apply to you.

What Is a Preapproved Mortgage?

Mortgage preapproval means a lender has agreed to take a close look at your financial condition to determine whether you would meet all underwriting guidelines for a particular loan. You will be informed about interest rates and monthly payments when speaking to the lender, but first you must agree to having your credit report run, and provide proof of income (paystubs, W2’s, tax returns) and document assets (bank statements, retirement account statements, etc.).

If you are preapproved for a mortgage loan, you will receive a letter indicating the lender is interested in working with you. The letter contains the terms they are willing to provide, such as the loan amount, interest rate, and the length and specific type of mortgage loan. However, you are not obligated to work with this lender just because they sent a letter of preapproval.

The great thing about being preapproved is you can take the letter to your Realtor, who will share it with potential sellers. This makes your offer on a given property more valuable than one from a buyer who hasn’t been preapproved.

What Is a Prequalified Mortgage Loan?

Getting prequalified is a less formal way of seeing how much of a loan you can afford. A lender will ask specific questions such as how long you have worked at your current job, how much do you make, and how much of a down payment you would like to put on a house. They may or may not run your credit at this time. As you can see, a prequalification is simply based on the verbal information you provide to the lender. Since the information has not been verified for accuracy, the letter you receive upon being prequalified does not carry the same weight as a preapproval.

Regardless, prequalifications are important in the early stages of the home buying process as borrowers can find out if they are in the right ballpark for a specific home and can easily shop for the best loan terms without spending too much time with one lender.

The Major Difference Between Being Approved vs Prequalified

Preapproved home buyers can feel extremely confident that they will obtain a mortgage loan in order to purchase real estate. Prequalified buyers are not guaranteed to get approved for a loan, but if they provide accurate information and work with a reputable lender, their chances are very good. Also, having a credit score that is less than perfect should never deter someone from trying to get prequalified or preapproved for a loan. There are different loan types for customers with all types of credit.

Reliable Mortgage Professionals

For over 25 years, the professionals at Butler Mortgage have been making the process of securing a home loan an easy one for Central Florida borrowers. Whether you are a first-time or repeat homebuyer, we can sit down and work with you to find the best mortgage that suits your every need. Contact Butler Mortgage today at 407-931-3800 or fill out our free consultation form online to see if you can be preapproved or prequalified for a mortgage loan.

Can I Get a Mortgage After Bankruptcy?

While declaring bankruptcy can negatively impact your credit score in the short term, you may still qualify for a mortgage loan. However, it will take some time and effort. How long a bankruptcy keeps showing up on your credit report depends on the type of bankruptcy filed. Chapter 7 bankruptcies remain on credit reports for as long as 10 years while Chapter 13 bankruptcies remain on credit reports for seven years.

Mortgage Options for Bankruptcy Filers

Unless you are a veteran or have a large amount of money to put down on a home (30% or more), you won’t be able to obtain a mortgage approval immediately after bankruptcy. Additionally, which kind of loan program you pursue will dictate how long you must wait.

For example:

Fannie Mae and Freddie Mac (Conventional loans) will not accept mortgage applications from people who filed a chapter 7 bankruptcy until four years after discharge and two years after a chapter 13 was discharged.
Federal Housing Administration (FHA) loans may shorten your waiting period to one year if you filed a chapter 13 or were forced to file bankruptcy due to losing your job. However, the FHA will expect you to show that you have found steady employment following bankruptcy. You must still wait two years after a chapter 7.
Department of Veteran Affairs (VA) may give you a loan immediately after a chapter 13, but you will need to wait two years after a chapter 7 and provide evidence of re-established credit.

How to Improve Your Chances of Getting a Mortgage Loan after Bankruptcy

Keep your new credit record spotless. Pay all bills on time and avoid racking up credit card debt. Also, check your credit record often to ensure it is accurate.
Make a down payment. While down payments do not matter a great deal when applying for an FHA mortgage loan, applying with a decent down payment can only help your chances of getting approved for a mortgage after bankruptcy.
Be honest and transparent. Get ready to answer questions regarding the circumstances of your bankruptcy. Lenders will ask what happened to make you file for bankruptcy, if you have established new credit, and whether you are currently behind in any of your bills—including utility bills. You will also be asked to provide all paperwork and court orders related to your bankruptcy.

Helpful Central Florida Mortgage Lenders

For over 25 years, Butler Mortgage has helped both seasoned and first-time buyers achieve Central Florida homeownership. If you’ve gone through bankruptcy, we can work with you to find the best loan solution to fit your needs. For more information about obtaining a mortgage after bankruptcy, contact Butler Mortgage today by calling 407-931-3800 or by filling out our free consultation form online.

Is Fall a Good Time to Buy a Home?

Everyone has a different idea of what their ideal home looks like, but finding the best deal is something that any potential homebuyer can agree with. If you’re on the hunt for a great property price with some added bargaining power, check out our top reasons to buy during the fall.

End-of-Year Incentives

During the holidays and heading toward the end of the year, sellers may be more motivated to negotiate so that they can complete their sale and start a new year fresh. Just like buying a car at the end of the month, you can use the calendar to your advantage and negotiate a better deal. With more motivation to come up with cash and free up their holiday schedule, sellers are likely more willing to bend when it comes to price or closing costs assistance.

Less Competition

Buyers typically enter the housing market during spring and summer, often wanting to close on their purchase before the new school year starts. By waiting until fall, you’ll have less competition, meaning the chances of you getting into a bidding war with other buyers will be reduced. This allows you to spend more time weighing your options, evaluating each piece of property, and sorting your finances. Also, with less buyers in the market, real estate agents will have more time to find you the perfect piece of property in your price range.

Off-Season Bargains

Spring and summer are the busiest times of year for real estate, but that doesn’t mean they’re necessarily the best times to buy. In fact by waiting for fall to roll around, you might have even more buying power. Sellers with homes that have been up for sale will be eager to close the deal and even discount their homes, which gives you a better chance to bargain shop. Of course, there are still a ton of new homes that go up for sale in the fall season, which means you can have your pick from the most diverse property pool.

Year-Round Mortgage Professionals

If you think that fall might be the right time for you to start looking for a home, partner with the mortgage professionals at Butler Mortgage. We’ve helped first-time buyers and seasoned property owners navigate the market, regardless of the season. To get started on finding your perfect home loan solutions, fill out our online contact form or call 407-931-3800.

Why Rising Rent Prices Means It Is Time to Buy

According to a recent Freddie Mac report, Orlando is the fifth most rent-burdened metro area in the United States. As cities throughout Central Florida share drastic rises in rent, tenants are questioning whether they should renew their leases or jump into homeownership. If you’re contemplating an upgrade from a lease to a home loan, here are a few great reasons to make the switch.

Stop Paying Someone Else and Start Building Equity

Instead of being locked into a lease that increases year after year making it hard to get ahead, consider locking in a low mortgage rate and putting your monthly payment towards an actual investment. As you pay down your mortgage, you are essentially paying yourself by building equity in your home. In fact, home equity is the largest asset for a majority of Americans.

Take Advantage of Relaxed Mortgage Guidelines

There are countless mortgage options to suit first time or repeat buyers. The two agencies that support most of the mortgages in the United States, Freddie Mac and Fannie Mae, have relaxed their guidelines in recent years, allowing for higher debt to income ratios. Additionally, both Freddie Mac and Fannie Mae now allow applicants to finance even more of their purchase price, up to 97%, which makes it a great time to purchase a home with very little money out of pocket.

High Rents, But Low Rates

Supply and demand is driving rent prices into historical highs, but the opposite is happening with mortgage rates for various reasons. Rates are at a nearly historical low for loans of all terms. Take advantage of this now before rates start going back up. An increase in a mortgage rate of even 1% could cause you to pay hundreds of dollars more each month on your loan.

Get Started on Mortgage Applications

If you’re ready to outsmart Central Florida rent, partner with the mortgage professionals at Butler Mortgage. Our team can walk you through a series of mortgage solutions until you select an option that fits your finances. For more information on your mortgage decision, complete our free consultation form or call 407-931-3800.

Things to Consider When Buying an Investment Property

Taking a different route to the traditional payday isn’t easy, but it can be incredibly rewarding. If you’re ready to take on the role of landlord or want to start flipping the fixer-uppers in your city, here are the top things to consider when buying an investment property.

Steady Income

Investment property income isn’t the same as your usual bi-weekly paycheck. In fact, if you can’t manage to flip your property or sign tenants in a reasonable time frame, you could end up going weeks or even months without any cash flow. If you steadily rely on hourly or salaried wages, consider whether you can afford to take time away from those obligations and dedicate time to your investment.

Property Location

If you want to manage your own property, consider starting off with an investment property that isn’t too far from where you live. Also, if you have a particular type of tenant in mind, make sure that the area in which you intend to purchase has amenities or attributes from which the renters can benefit. For example, if you want to rent to a responsible, small family with stable income, search for properties with nearby schools in safe, clean neighborhoods.

Unexpected Expenses

Even if your property passed a pre-purchase inspection with flying colors, you may still run into some home hiccups once the keys are in your hands. For example, your fixer-upper can easily turn out to be a bigger project than you thought, or one of your larger appliances might give out on the newly signed tenants. Since these things can arise without warning, you need to have a savings cushion to help you weather such unexpected events.

Insurance Coverage

When shopping around for an insurance policy, consider whether you can afford to pay a little bit more each month for better coverage versus a low premium policy in which you will have to pay a larger sum in the event of an accident. Also, remember that when you’re purchasing a piece of property in an area prone to natural disaster damage, you might be facing higher insurance premiums for essential coverage. However, you should still shop around to find the best available rate for your financial situation and property plans.

Your Goals

Are you looking to turn an investment property into a full-time job? Are you looking for a stable source of additional long-term income? Whatever reason you decide to start investing in property, make sure to consider whether it is possible to satisfy your overall goals before making the purchase. For example, if you’re a risk-averse, first-time buyer, don’t start shopping for a home without understanding how it can fit into your one-, three-, or even five-year plan.

Mortgage Options

One of the most important things to consider when buying an investment property is how you plan to finance your purchase. Fortunately, you can find the right mortgage solution by teaming up with the professionals at Butler Mortgage who have been helping people finance primary homes, second homes, and investment properties for over 25 years. Our expert team will guide you through financing options to help you purchase your first investment property. Contact us online for a free consultation or call 407-931-3800.

FHA Revises Condo Requirements

FHA loans are one of the strongest financing options for first-time buyers, and condominiums are one of the most affordable and easily maintained property options—but FHA-backed condo loans have not always been an easily accessible mortgage solution. However, with new FHA updates from the Department of Housing and Urban Development (HUD), the condo approval process is about to change in a lot of ways.

Expanded Access

Under previous FHA guidelines, condo certifications only lasted for two years before developers or project owners required re-certification. Fortunately, the FHA will extend the condo certification window another year, giving project owners a three-year period before requiring re-certification. And when reapplying, developers will no longer have to resubmit a complete application; they’ll just need to upload the amended information.

Spot Approvals

According to the current FHA regulations, buyers are ineligible to obtain a single-unit FHA loan if the entire complex isn’t already FHA approved. With the new FHA amendments, spot approvals allow the FHA to approve single condo units within a community; however, the amount of units eligible for FHA insurance varies depending on the total units in the complex. For example, in unapproved projects with over 10 units, no more than 10% of units are eligible for an FHA loan. And in unapproved complexes with under 10 units, no more than two units are eligible for an FHA loan.

More Options

The new FHA guidelines are opening up a lot of incredible homeownership opportunities for first-time buyers, allowing them to easily finance in mixed-use developments and complexes with lower owner/occupant ratios. And now that more condo units will have the opportunity for approval, HUD projects that more condo projects will start appearing in development.

FHA Approval

Starting mid-October, condo financing may be more affordable and more available to countless buyers, which means now is the best time to get approved. If you want a head start on the condo market competition, partner with the mortgage professionals at Butler Mortgage. We can guide you through the approval process or help you find another financing option that best suits your situation. To learn more about the new FHA amendments or to find a different mortgage solution, complete our free consultation form or call 407-931-3800.

Understanding the Updated 2020 VA Loan Limits

Updated 2020 VA Loan Limits

There are multiple benefits available for veterans securing a VA loan and recent updates make VA mortgage loans an even better choice for some. To better prepare veteran borrowers for their next big purchase, let’s take a look at what the 2020 VA loan limit changes mean for upcoming applicants.

The 2020 VA Bill

Earlier this year, the Senate and the President approved the Blue Water Navy Vietnam Veterans Act to award veterans with higher benefits in healthcare and homeownership for 2020. The bill removed the previous loan limit of $484,350, allowing the Department of Veteran Affairs (VA) to support veteran borrowers seeking larger home loans.

VA loan limits represent the maximum zero-down amount that the VA can guarantee regarding good credit risk, but this does not represent the amount that a lender is guaranteed to approve. The final approval decision is still in the hands of mortgage lenders.

VA Loan Fees

As of January 1, 2020, veterans in nearly every county in the United States will be able to borrow at higher amounts—without making a down payment. However, removal of the loan limit comes at a small price to borrowers in the form of additional loan fees. Per the 2020 changes, the funding fee without a down payment is set at 2.30% for first-time users and 3.60% for subsequent users.

Spouses of veterans who died in active duty or suffered fatal disabilities from their service may be eligible to have these fees waived. Similarly, active-duty Purple Heart recipients will also be exempt from these fees, but there are other loan requirements that all veteran applicants must keep in mind. Regardless of the loan limits or applicable funding fees, borrowers must meet standard lender requirements regarding credit and income to qualify for VA mortgage loans.

VA Loans in Central Florida

Finding the right mortgage product to purchase or refinance a home can be difficult when the options and limitations are constantly changing. Fortunately, the loan experts at Butler Mortgage are here to help Central Florida citizens make the best borrowing decisions. Whether you’re looking for a VA loan or any other mortgage solution, our team of loan professionals will guide you through the optimal mortgage options for your finances. Call us today for a free consultation at 407-931-3800.

How to Qualify for a Mortgage When You’re Self-Employed

Anyone gearing up for a mortgage application is going to take some time to prepare their information, gather necessary documents, and comb through their credit reports. However, for those who write their own paychecks, the process can be a little trickier. With a few more hoops to jump through regarding income, credit, and borrowing in general, the lending process can easily deter any self-employed mortgage applicant. So, here’s our guide to qualifying for a mortgage when you’re your own boss.

Adequate Income

Although writing off expenses decreases your taxable income, it also decreases your provable income. Lenders don’t care about your gross earnings; they care about the number that you take home, which means you’ll have to prioritize whether you want to save more on taxes now or qualify for a home later. If you want your mortgage application to look its best, you’ll need to show that you have as much net income as possible, even if you’re going to pay a little more in taxes.

Necessary Documents

When applying for a mortgage, salaried workers must provide W-2’s and their personal tax returns for the past two years to show that they have both adequate and constant income. Self-employed borrowers must provide the same items as well as their business tax returns (all schedules) for the past two years. If they are a sole proprietor, the schedule C in their personal returns would be sufficient.

Lenders don’t deny applications for having too much proof of income, so save any business documents that you feel may be beneficial to your mortgage application.

Borrowing History

Credit plays a big part in mortgage qualifications whether you’re self-employed or not. Therefore, it’s essential that you work to lower your debts and improve your score as much as possible before you begin the home buying process. Since your financial history will be under a microscope when applying for a mortgage, you must examine each of your credit reports, avoid closing or opening any new accounts, and continue making timely payments on each of your existing ones.

Down Payment

As a self-employed borrower, you don’t have to put more money down to walk away with the same deal as a salaried applicant. However, most lenders are much more likely to approve loan requests when the applicant is willing to put down more money because it minimizes the likeliness of a mortgage default. Therefore, while you’re planning to purchase a home, consider saving up for a larger down payment to strengthen your application.

Proper Planning

Buying a home isn’t a spur of the moment decision, which is why you should start planning now. By teaming up with the professionals at Butler Mortgage, you can prepare for your purchase to be way ahead of the application game. Whether you’re self-employed or in a salaried position, our team of loan experts can guide you to the best decisions for your long-term purchase and financial future. Contact our team for a free consultation by calling 407-931-3800.