Questions - Property purchase in Florida

How easy is it to apply for a mortgage?

Who can take out a mortgage?
Virtually anyone can apply for one of our mortgages providing you are 21 or over and are currently a British resident or home owner. We can also help if you're either employed or self employed.

What can I use the mortgage for?
Most people will use it to realise their dream of buying a holiday home in Florida. Others may choose to refinance an existing mortgage with a US lender, to reduce their outgoings and the additional piece of mind of dealing with a British lender with a Sterling mortgage.

How much can I borrow?
There isn't a straightforward answer to this question. The amount you can borrow depends upon the value of the property in Florida. You should however, think carefully about how much you can comfortably afford to pay each month.

We have guidelines on the maximum and minimum amounts we will lend, depending on the type of mortgage you choose. For each type of mortgage, we set maximum loan to value ratios-the ratio between the amount you want to borrow and the value of the property (or the purchase price if this is lower). These guidelines are outlined in the mortgages at a glance guide. We will also assess your ability to repay the mortgage from the information you provide us in the Application form and from our searches and enquiries.

Will you take into account, any rental income I receive from my holiday home in Florida, in assessing the amount you will lend me?
We may be able to consider a proportion of the rent you are likely to receive from renting out your property.

How do I apply?
Floridavillasforsale.com have teamed up with a number of specialised intermediaries. They will advise on the most appropriate product for you and on the whole process of buying your holiday home in Florida.

Do you require details of my/our income(s) before granting the mortgage?
Dependent on the proportion of the purchase price you are paying from your own resources, you can simply 'self certify' that you can afford the amount you want to borrow, without the lender seeking further confirmation of your income.

How much will it cost to arrange my mortgage?
The fees for arranging a mortgage vary from time to time.

Is there any exchange rate risk in taking out a Sterling mortgage?
The mortgage that we will offer you (subject to our normal checks) will be in Sterling and will be exchanged into dollars on a given day to assist you with the purchase of your Florida holiday home. To remove some of the uncertainties of currency fluctuations, we will guarantee the dollar/pound exchange rate on the date we issue your offer, for a period of 21 days. A fee will be payable for this facility.

How long will it take?
The good news is that we will let your intermediary know almost immediately, if we are prepared in principal, to lend you what you want, subject to the results of our enquiries. These enquiries usually involve checking the information you have sent us and carrying out a valuation (known in the US as an appraisal) of the property you have chosen. We may, at our discretion, also carry out a number of other checks such as confirming your income from your employers and taking references from your existing lender. This process will be completed as quickly as possible, at which point we will issue you with a formal offer of advance.

What happens if I don't complete the purchase of the property (close) on the agreed date?
If you wish to set a new date for the purchase of the property, a 're-draw' fee will be payable, to cover additional work we will have to undertake, to support the purchase of the property. Other fees may also be payable to the Title Company for the delay in purchase.

Can I rely on the valuation (appraisal) you have carried out on the property or do I need a more extensive Appraisal?
Before we can offer you a mortgage, we need to obtain an estimate of the property offered as security. However, you should bear in mind, that it is intended solely to tell us that we can lend the amount you have requested. It is not a detailed appraisal of the property and you must not rely on it to guarantee, either the property's overall value or its condition. You may therefore wish to arrange a more extensive report on the property.

Who can assist me with the purchase of my holiday home in Florida?
The process of buying a property in Florida is different from Britain. You will need a Title Company, whose job it is to check that the title of the property is ok and to handle all of the other documentation associated with your holiday home purchase. When they have confirmed everything is in order and all the necessary documents have been signed we will send the advance to them to complete the purchase. You will also need to use a Notary Public who is completely independent of the Bank and the Title Company to notarise all the necessary documents.

Over what period can I have my mortgage?
You can choose the term of your mortgage and this may be up to 25 years.

How do I repay my mortgage?
You may have some uncertainties about the process of buying a property in Florida for the first time but you can rest assured that the method of repaying your mortgage is familiar to you:

• Capital Repayment
  Your normal monthly payments to us will comprise two elements, the interest due to us on your mortgage and a payment towards reducing the mortgage itself. In the early years the payments are predominantly made up of interest, while in the later years more of the repayment goes towards repaying the capital. By the end of the term of the mortgage, provided all repayments are made on time, there is an absolute guarantee that the mortgage will be paid off.
• Interest Only
  The key feature of this option is that you do not normally repay any of the mortgage until the end of the term. You simply pay us all the interest due on your mortgage on a monthly basis. You will need to make your own arrangements to enable you to repay the mortgage from your own resources at the end of the mortgage term. This option gives you the freedom to decide how you will do this, whether it is by using savings, insurance policies, investments, an inheritance or even selling the property.

What interest rates apply?
Reassuringly they will be based on British rates, providing you with value for money mortgages. There are a number of ways in which interest may be charged.

If interest rates go up, can you still afford the payments?
The table below, which is provided for guidance, shows the amount you will pay each month, for every £10,000 you borrow on an Interest Only mortgage. You will see that the monthly payment varies significantly as interest rates change.

Do I need to arrange home insurance?
It is a condition of your mortgage that you will need to have your property insured for its full reinstatement value. This is the estimated total cost of rebuilding your home if it is completely destroyed. Our valuer (known as an appraiser in the US) will work out this cost when the property is being valued to make sure that it is a suitable security for the loan and we will let you know how much insurance cover you will need.

It is your responsibility to ensure that your property is adequately insured. Your intermediary can help to arrange Building Insurance cover for you (known as hazard insurance). The policy must be acceptable to us, and the policy must be noted with our interest in your home.

What happens once I have my mortgage?

How do I make my monthly payments?
We always collect our monthly payments on our mortgages using direct debit from your bank or building society in Britain. These payments will be collected in Sterling. We will provide you with a Direct Debit Instruction, which you will need to complete and sign, in order to instruct your bank or building society to honor our monthly requests for payment from your account. As the interest rate applicable to your mortgage changes, we will vary the amount we collect from your account. We will always tell you in advance what your new monthly payment will be and, apart from ensuring that there is enough money in your account, you will not have to take any action at all.

Can I pay my fixed rate mortgage off early?
Yes, you can. However, if you chose to repay during the fixed rate period, you will incur a redemption fee. Please refer to the mortgages at a glance guide.

Of course, if you are redeeming your mortgage to take out another mortgage with us, perhaps to move to a larger property, we may waive or reduce these fees. All our mortgages are portable, subject to status and appraisal.

Can I make additional payments?
Yes you can. On our Flexible Tracker product, you have the freedom of making additional payments when you like, which could save you thousands of pounds in interest charges. We calculate interest on a daily basis; therefore any extra payments that you make, over and above your your monthly mortgage repayment, will reduce the capital balance on your mortgage immediately.

What if I get into difficulties?
The amount that you can borrow will be calculated on the basis of your personal, financial circumstances at the time you apply. It is always possible that your circumstances may change and, as a result, you may run into problems keeping up your mortgage payments. If this happens, we will always offer a sympathetic ear and we will be pleased to give you personal help and advice. However, it is absolutely vital that you talk to us as soon as the problem arises. The earlier we start working together to solve your difficulty, the better.

What next?
If the thought of dealing with a lender that speaks your language in more ways than one, is appealing then contact your intermediary to find out how you can turn the dream of owning a holiday home in Florida into a reality.

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