Take Advantage of Unique Perks from Builders; Cut Down on Florida Mortgage Payments
We’ve talked at length about the need for sellers to change strategies in order to make up for a lack of Florida home loan demand. With that in mind, here are three unique ways in which buyers can save money by taking advantage of seller and/or builder incentives:
1. Improve Your Florida Mortgage
Buyers are getting incentives for taking out mortgages, says Anthony Hsieh, president of LendingTree.com. For example, 20% of home builders are using “buy-down” programs, in which they buy down your Florida home mortgage by two percentage points in year one and one point in year two.
This could be a great deal, but remain wary. Some trendy mortgage offers are similar to certain credit cards, replete with teaser Florida home loan rates attached that soon get hiked up. These are cheaper in the early years than what you might qualify for, but they escalate quickly.
“Buyers have to be very careful not to be swept off their feet to take the wrong product,” says Hsieh. “You don’t want to get blinded into the wrong mortgage.”
The key to knowing whether the loan being offered to you is a good deal or a bummer is to run the numbers on a few scenarios, says Keith Gumbinger of HSH.com, a publisher of mortgage information. You want to know what your actual payment will be not just in years one and two, but for as many years as you’re planning to live in the house.
2. Look for Alternative Cuts
The buyer’s market has created a market for something that’s not usually on the list of negotiable factors in the sale of a home: title insurance. That is changing thanks to Titleinsurance.com.
Consumers go to the site, fill in information about their transaction and get a handful of quotes from title insurers in the county. The service is nonbinding and free to consumers. Revenue comes from title insurers who pay, essentially, for leads.
How much money you will save depends on the competition in your area, but with title insurance averaging less than 0.5% of your Florida home loan- but sometimes costing as much as 1.5% - the gap can be a couple thousand dollars or more.
3. Grill Your Broker
In order to help move inventory, more than a third of today’s home builders have increased their use of brokers over a year ago, often paying them higher-than-average commissions.
“Owners and builders are inviting us to cocktail parties, and they’re giving bonuses and increased commissions,” says Diane Saatchi of the Corcoran Group.
Most buyers don’t realize that their Florida mortgage broker is getting an incentive, and there’s no legal obligation to tell them. “But you can flat out ask a broker, ‘Are you getting an incentive?’ Then the broker has to tell,” says Saatchi.
Therefore, if a broker is getting an extra 2%, you may wanna take his/her words with a grain of financial salt. Be aware of what all parties have to gain from this transation.
You’ll also know that the seller is desperate, so ask for a lower price. These days you just might get it.
