Frequently Asked Questions

Mortgages - The Buying Process

What is a closing?
Closing" is the date when the buyer, seller, and lender, or their agents, agree to meet and legally transfer the property and disperse all the funds, or reference the property.

What are closing costs?
"Closing costs" are the costs associated with the transfer of property. They may be costs such as discount points, appraisal fees, title search fees, insurance charges, survey charges, mortgage brokers fees, and state filing fees. Typical costs amount to approximately 2% and 3% of the mortgage amount.

What happens at closing?
The seller, buyer, and lender, or their agents, meet and legally transfer the property, and associated funds, between parties.

How often do I have to make mortgage payments?
Depending on the lender you choose, payments will be monthly, bi-weekly, or weekly.

What is foreclosure?
"Foreclosure" is a legal action undertaken by a lender to sell a mortgaged property, in order to pay a defaulted borrower's debt.

Can I get out of my mortgage if I choose?
Most mortgages allow you to pay off the mortgage early. Some mortgages do have a prepayment penalty, but most do not. Ask your mortgage broker about the program you've applied for.

What is "Fannie Mae", "Freddie Mac", and "Ginnie Mae"?
Fannie Mae is the term for the Federal National Mortgage Association. This is an institution incorporated by congress to buy and sell conventional, FHA insured and VA guaranteed mortgages. Freddie Mac is the term for the Federal Home Loan Mortgage Corporation, an agency that purchases mortgages from insured savings institutions and HUD approved mortgage bankers. Ginnie Mae is the term for the Government National Mortgage Association. They supply residential mortgages that are insured through the FHA or are guaranteed by the VA.

What is the difference between fixed mortgages and an adjustable rate mortgage?
Fixed rate mortgages offer an interest rate that remains fixed for the entire term of the loan. An adjustable rate mortgage (ARM) is a loan in which the interest rate changes to reflect the current interest rates. Adjustable rate mortgages may change rates according to the rate set at your closing. Ask your mortgage broker for the options right for you.

What does A.P.R. stand for?
This stands for Annual Percentage Rate. This amount also reflects the annual cost of the mortgage, taking into account the points paid and other costs incurred for the credit extended to the borrower. The A.P.R. is helpful in comparing the costs of different loan packages.

What happens if I am late or miss a mortgage payment?
Typically, a late payment fee will be assessed, and must be paid. Of course, interest will continue to accumulate. If the borrower stops making payments, this will result in a defaulted mortgage, and foreclosure of the property.

Why use a mortgage broker?
When utilizing the services of a professional mortgage broker, you have a representative who has your best interests in mind. Brokers are not tied to selling you a specific lender's loan program. A mortgage broker acts as your representative in opening the doors to a multitude of lenders. By assessing various lender's programs, interest rates, loan fees, underwriting guidelines and credit requirements, the mortgage broker will recommend which lender and specific loan program best suits your needs.

How much money can I qualify for?
Typical mortgage requirements say that if you have an average debt load, you can obtain a mortgage between two and three times your annual income.

What if I have credit problems?
You will need to explain the circumstances of the credit problem. If you no longer have the problem and have kept current with your obligations for a period of one year or more, most lenders will accept your mortgage application.

What is private mortgage insurance?
Private mortgage insurance may allow you to purchase a home for as little as 5% down payment, even if you do not qualify for a FHA-insured or VA-guaranteed loan. Such coverage requires a monthly insurance fee to be paid.

What is the difference between a conventional loan and a FHA loan?
A conventional loan requires you to place a down payment of between 5% and 20% of the selling price of the home. FHA (Federal Housing Administration) loans are guaranteed by the Housing and Urban Development (HUD) and you can buy a home with as little as 2.5% down payment.

What is a convertible mortgage?
When you have a convertible mortgage, it allows you to change from the initial ARM mortgage to a fixed rate mortgage. This option usually requires an extra fee.

What is amortization?
Amortization is the division of principal and total interest charges into equal payments that will result in the complete payment of the debt by the end of a fixed period of time.

What is a cap?
A cap is a limit that is placed on an ARM mortgage. It may limit the maximum loan rate amount, or the maximum amount the loan rate may increase per term, for example, a one year ARM changes once a year.

What does it mean to lock-in?
When you "lock-in", your lender will guarantee the interest rate on your mortgage for a limited period, regardless of the current market rates. This option usually is done for a fee. If you are concerned that rates may rise before your closing date you may want to "lock-in".

What is P.I.T.I.?
This stands for the components of your regular home payment, "Principal, Interest, Taxes, and Insurance".

What is an appraisal?
This is an estimate of the value of the property you intend to buy or refinance.

Here we address common questions a new home buyer may have. We make ourselves available to assist you, should you have any additional questions. Before considering the purchase of a home, you must determine the purpose of the home. Will it be only a holiday home? If so, you may want to rent your property when it is not being used by your family, friends or yourself. How important is that rental income? Will it be used purely to generate income?

YOUR FIRST DECISION
Before considering the purchase of a home, you must determine the purpose of the home. Will it be only a holiday home? If so, will you rent out the property when it is not being used by your family, friends or yourself. How important is that rental income?

RENTAL RESTRICTION
Questions have been raised about rental restrictions imposed within the Disney area. Three counties have different sets of rules. Orange County did, some time ago, bring in regulations forbidding rentals of less than 30 days. This does not mean that a property owner cannot rent their house; only that each rental must be for a minimum of 30 days. However, the number of rental agreements in any year could not be more than 12 at the most and so a property in Orange County may not be the best place to maximize rental income.

Osceola County now has rental restrictions in place. However, the position is very different from Orange County. Authorities have created exceptions and exclusions to protect the large number of investors who have already purchased houses in the county and the large number who continue to do so.

Consequently and without going too deeply into what are fairly complex provisions, many developments have effectively been excluded from the restrictions rendering them communities from which short-term rental activities are allowed.

Polk County and Lake County are developing relatively fast. Therefore further investment is being encouraged.

It is essential that a prospective buyer obtain advice as to the suitability of the property / development and the use of which it is intended. Rental restrictions should be carefully evaluated and understood. We will gladly provide you with advise guiding you safely and expertly throughout your selection process.

DEPOSITS
The payment amount of the initial deposit will vary from builder to builder. Most will require a $1,000—$5,000 at contract stage. A deposit will enable you to write the contract, thus fixing the price and protecting your chosen "lot" or home from a price increase. A total of 10% based on the contract price will be required prior to construction.

BANK ACCOUNT
A U.S.Bank Account is desirable to facilitate the transfer of funds. We will be happy to introduce you to one of the major banks and assist you in opening a suitable account. An initial deposit of $50 should be adequate to open your account.

CLOSING AND RENTAL SETTING-UP CHARGES
Many are concerned about hidden extras and have heard stories about buyers being saddled with unexpected charges for closing costs long after it has become too late to withdraw from the purchase. Closing costs comprise of several elements, many of which are stamp duties payable on various documents but the biggest expense is usually applicable to the mortgage. Some builders will make a substantial contribution to closing costs. If a US mortgage is not required some builders will offer a cash discount. Finally, if the property is being managed and rented out, you will need additional money for escrow, lodging license, fire extinguisher and security bolts.

US VISAS
If you are an investor seeking to run a business in the United States, you will need to obtain the appropriate visa to do so. We will briefly explain these to you and we can arrange a meeting with our Immigration Attorney at your convenience to discuss all options in more detail.

RESALE
The availability of resale Property changes daily. We will be happy to include a tour of appropriate resale properties within your viewing program should this be of interest to you. Good resale Property will not generally be on the market long, and while there is always a possibility that a "bargain" may become available, a true bargain in a prime location can be difficult to find. The importance of buying in a "prime" sought after location is crucial if the property's resale value is to be optimized. There could well be a good reason why a particular resale is "cheap".

SPEC HOMES
Most builders will build one or more spec homes in anticipation of a buyer wishing to buy a house that is ready to occupy. This is a great way to see the finished product before completing the purchase. The inventory obviously varies on a regular basis, but we will be happy to show you the current availability.

FURNITURE PACKS
While you may like to furnish and equip your home yourself, this can be somewhat time-consuming and expensive. Most buyers opt for one of our "furniture and house ware" packages. We do not consider it necessary or indeed advisable to spend excessive sums on furniture, but equally we believe it could be false economy to buy furniture of inferior quality which may not stand up to the rigors of a rental property. Our furniture pack will equip your property with attractive, yet hard-wearing furnishings. Everything from a color TV, washing machine, fridge, lamps, ashtrays and toilet rolls are included. More expensive pack are available and most items can be customized or upgraded to suit your taste and budget. We also offer a free interior design service and will be happy to arrange a suitable time for you to meet with our interior designer.

FINANCIAL MORTGAGE INFORMATION
While Florida property purchases can often be financed from one's home country, US mortgages will frequently be more attractive and are readily available subject to approval. Advances of 75% of the cost (house, lot and pool) are relatively simple to obtain, 80% are not normally a problem although much more detailed financial information will be required. We will be happy to introduce you to various mortgage brokers with whom we are associated.

AFTER SALES SERVICE
We will:
1. Be available to answer all your questions and queries regarding mortgages, closing dates, rental, etc...
2. Send you photographs on a monthly basis to show you the progress of the construction of your property.
3. Carry out the "walk through" just prior to closing. This avoids the necessity of you having to returning to Florida to "close" the purchase. We will ensure that the house is completed, the color schemes are as ordered and all extras are installed.
4. Arrange for deposits to be paid on your behalf (provided that these funds have been established in an account) for all utility services
5. Co-ordinate the delivery of your furniture package and ensure that all items are in working order and that all packaging is removed from your home
6. Ensure that your property is continually ready to receive either your guests or yourselves.

COMMERCIAL AND BUSINESS OPPORTUNITIES
We have companies listed, small and large, in all types of industry. We provide a free confidential business analysis for businesses and commercial properties up to 25 million dollars.

COUNTIES FOR SHORT TERM RENTAL
Lake County: City of Clermont It’s a land of gently rolling hills and a thousand of glimmering lakes. It’s Florida’s true natural beauty. It’s small, friendly towns where southern hospitality rules the day. It’s a perfect getaway. It’s only a short drive from all the dazzling magic of Orlando. It’s a million miles from all the hassles. It’s lot of great things to do for all ages. It’s family fun where vacation dollars go further. It’s lake county the country side of Orlando.

Polk County: Cities of Davenport and Haines Small towns and neighbors of Disney World, placed just off the beaten path. Situated along US Highway 27, Davenport has remained largely unchanged by the impact of world-size tourism just to the north. The rolling hills of the Lake Wales Ridge, stretching south for about 100 miles from this point in northeast Polk, provide an idyllic setting for the town of Davenport.

The rapid expansion of the Disney complex just to the north, coupled with thousands of vacant acres of land formerly used for citrus production, have drawn dozens of new subdivisions and Golf Courses to the area all the way to Haines City.

Osceola County: City of Kissimmee City leaders, wanting to continue Kissimmee’s prosperous history, encouraged growth through the attraction of retirees into the area during the 1950’s. This effort stimulated growth of almost 60%. The next period of growth came in the 1970’s with the opening of Walt Disney World resort area and other tourist attractions. Since Walt Disney World’s debut in 1971, the population doubled from 7,500 to 15,000 in 1980. For the year 2000 an estimated 47,814 occupies 18.64 square miles of Kissimmee.

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