Congratulations, you've finally found your dream home you think might be in your price range. But in South Florida, finding a home you actually like is almost always going to stretch your month budget.
Many of us jump into a mortgage without taking the proper steps and precautions, and before long, find ourselves sinking into a pit of debt. But if you spend a little extra time, you'll find you can save yourself a lot of stress, confusion and money!
Steve Prince, Team One Lending, says, "We're about to put you into the largest piece of debt you're ever going to carry. It's our job to manage that debt over the period of time."
Both Steve and his partner, Jason Biro, agree it's best for potential homeowner to take their time and really analyze what they want...
"They're not consulting with someone who really can take them down the road to accomplish what they really want to accomplish," explains Steve.
... And what they can afford.
Jason says, "You'd be surprised in what you can qualify for. We try to narrow it down to what you can afford. Basically, we can pre-qualify you for anything. But, at the end of the day, when you factor in taxes, mortgage and insurance, can your truly afford the payments that you are about to engage in?"
We've all seen the ads - interest only loans with one percent start rates - that's what Steve and Jason call teaser rates. And just like any tease, they don't stick around for long.
"After the period of three, six, 12 months, the rate adjusts to the fully amortize rate which includes the index and the margin. Make sure if they get into a teaser-type loan, they establish how long that teaser rate is going to be around for," informs Jason.
Steve adds, "A lot of the properties that are going belly up and people being pushed out of their homes are being blamed on the creative financing."
But the banks who offer those creative loans may not be the reason for the rise in foreclosures.
"The creative financing is being designed by some of the most brilliant people on Wall Street. Really, it's the people who are putting them into the creative financing is where the issue is," Steve concludes.
And that's why it's so important to sit down with a mortgage lender. Steve and Jason also say time is the biggest component in deciding the type of loan that's right for you - are you going to stay there until retirement or is this a home you are going to turnover fairly quickly?
And with any legal document, make sure you know all the terms and conditions before signing. If you don't, walk away. The rates that broker got you can be found elsewhere.