When Florida Mortgage Searching, Consider All Costs

Whether you’re refinancing a Florida mortgage or getting a new one, you want to pay careful attention to all the costs.
It’s imperative you don’t just focus on the initial interest rate that a Florida mortgage broker or lender might quote you.

What are the fees? Is this an adjustable-rate product that could lead to even higher mortgage payments in just few years? What is the cost - if any - of paying it off early?

Kathy Ann Williams, housing coordinator for Oakland County’s Community and Home Improvement Division in Michigan, tells homeowners to pay attention to the APR, which measures the true cost of the home loan.

She was counseling one homeowner who had three mortgage quotes. The quoted interest rates ranged from 6-6.25 percent. Fairly similar.

But when you looked closely at the paperwork, she said, one mortgage had an APR of 6.32 percent and another had one of 6.8 percent. The third mortgage lender offered an APR of 11.3 percent.

When you’re in the market for a Florida home mortgage, you can’t afford to make this kind of mistake and end up with a loan you don’t fully grasp - and worse yet, can’t pay.

Another cost: Watch out for a prepayment penalty.

Many borrowers don’t know that you might be charged an extra fee if you prepay the Florida mortgage. Some housing counselors have seen prepayment penalties that are 3.75 percent of the loan in the first few years of the mortgage.

That would amount to about $3,750 if you prepaid $100,000 on your Florida home loan in the first few years.

It’s your money, and your home. Be smart.

SOURCE: Detroit Free Press