When it comes to Florida home buying and more so with securing finances on your home purchase, there are laws put in place that may be different from other states.  By learning about the legal portion of securing a Florida mortgage, you will be protecting yourself as well as expediting your Florida home buying experience. 

For example, Florida has a law in place that regulates variable interest rates when purchasing real estate. What that means is if you have a large mortgage loan you are guaranteed a fixed interest rate.  There is another law in Florida that does not allow interest to be charged before the mortgage is recorded.

It is also a requirement in Florida for your agent to provide you with a Transfer Disclosure statement.  This is a document provided by the seller to state everything about the property, including a list of what is included in the price. The statement should be detailed and include not only what is being left in the house such as appliances but the current condition of the house and surrounding property as well as any hazards that may be present.

If this is your first Florida home, you could be eligible for a FHA loan, which could cover your down payment and closing cost too. Home buyers that are employed in the education field can be eligible for additional credits too. There are also mortgages available to qualified buyers that allow them to pay only the interest for the first five years of their loan.

Another little known Florida law states that when you are late with your mortgage payments and your lender decides to pursue foreclosure, you have to be notified prior to its happening.  It has been known where a counter suit to a foreclosure ended up with the lender owing the homeowner damages. So if you ever come to a time when you are going to be late on a payment, find out your legal rights.

Also in Florida it is illegal for a lender to charge points and fees that total more than 6% of the loan’s principal. Of the many laws that are in place for the protection of home buyers, there are also laws that protect borrowers from taking out a loan that they can’t afford to repay in some states. Congress is working to set that law up nationwide in the aftermath of the recent housing crisis.

So after you find that Florida house of your dreams, learn the laws regarding this purchase that protect you. The more you learn the better informed you will be about the legal process of a Florida mortgage. Not only will you be protecting your rights, but you’ll save money too.

Even though it seems like there are a million of them out there, it is not uncommon for there to be multiple offers on one REO or bank owned property.  In this situation, it is your responsibility to write an offer that makes the bank’s asset manager, the bank employee who handles real estate owned properties, happy and creates the least amount of work for the bank.  If you pull this off, you will increase your chances of beating out competing offers. 

Start out by showing them the money for the REO of your dreams; or at least the earnest deposit money.  When you submit your offer, make sure your deposit is at least 20% or more.  This is a requirement, but it definitely gets your application to the top of the pile.  It doesn’t even matter if your offer is the highest.  What matters is if you have the cash and finances to start helping the lender recoup their losses. 

Going right along with the money theme is your preapproval letter from the bank that owns the property.  Even if they aren’t requiring that you be pre-approved with them, do it anyway.  This demonstrates that you meet the bank’s financing guidelines and are able to get financing.  An added bonus is that in some cases you will be able to negotiate terms and rates when you stay in house for REO financing. 

Second factor is time.  Yep, it all comes down to time and money.  Your offer needs to include quick action from you on inspections, deposits and documentation.  The bank will recognize that you mean business if you fulfill your obligations quickly and accurately.  Respond to bank’s requests quickly.  A slow reaction could land your file back on the bottom of the pile for weeks.  Hire your own home inspector, but let the bank use all their own people for everything else.  This makes the asset managers job easier which in turn floats your offer closer to the top of the pile.

Finally, and this is all cosmetics and a little brown nosing, but it never hurts.  Make sure you sign all of your documents in dark ink and that your offer is complete and includes every document required for a REO offer.  Most documents are handled digitally now and a signature that doesn’t scan well is another trip to the bottom of the pile while the asset manager awaits a valid copy.  The same is true of missing documents or incomplete offers.  Make sure it is all there and don’t lose precious time by sending incomplete packets. 

And for brown nosing points, some say these don’t work at all, but we say it can’t hurt to try.  Show your empathy for the asset manager who handles somewhere in the ballpark of 400 plus offers a day.  Be thorough.  Be accurate.  Be diligent.  And be there when they need more from you.  But most of all, don’t bug them, let them come to you. 

Foreclosures can be excellent investments. Many real estate investors look at foreclosures before any other investment. However, a new investor may experience many problems along the way if they aren’t careful.  First time real estate investors need to educate themselves before diving in to the allure of foreclosures to avoid common first timer mistakes. 

The first common overlooked aspect of foreclosures is location, location, location! Even if purchasing foreclosures to flip for quick return, never assume below market prices on foreclosures will have a high profit when ready to sell. Look for foreclosures that are in the best location possible but the least attractive house. This will give you a better opportunity to get the highest resale value in the future.

When buying foreclosed properties you are buying them “as is”. You should never waive the home inspection, regardless how good the deal sounds.  More times than not, a foreclosure will have need repairs. With the logic that if the previous owner was having trouble making his payments, he most likely wasn’t able to keep repair and maintenance up either. A home inspection can find anything from leaking roofs, plumbing problems, mechanical or electrical issues, foundation problems and even mold or radon contamination not to mention termite infestation. This will help you as the buyer to know whether to expect large and expensive repair jobs.

After you have the home inspection completed, you will have a better idea how to negotiate the price on a foreclosed home. Considering the repairs that are needed you can come up with an offer price. Homes can depreciate quickly, even those just a few years old. Plan to budget a minimum of 10 percent of the price you paid for repairs. As you consider a foreclosure, consider the possible repairs so that you don’t over-invest in the property. Doing as much of the work your self will save you money.

In addition to the home inspection, a title search should be done as soon as possible.  You want to make sure there are no outstanding liens such as second mortgages, home equity loans or property taxes. Included in this search should be any fines or late fees as well. Make sure all these factors have been taken care of and the title is clear.

When purchasing a foreclosure, think of it as a long term investment not a quick flip investment. Houses are expected to decline in price in the future, so if you are looking for quick cash, a foreclosure is not the way for you to invest. Experienced investors that have financial resources and plenty of time are the right ones for long-term property investment that foreclosures can be.

Foreclosures can be a great investment if you do your research and homework. Or if purchasing for your own home and you can afford a fully amortized fixed-rate mortgage, consider purchasing a foreclosed property for a great deal.

Another extension gives you more time to buy.  If you have been thinking about buying that home and thought you missed a golden opportunity from the home buyers tax credit, give up the regret and act fast! The Senate has approved another extension to the Homebuyer Tax Credit until September 30, 2010.

In case you forgot just what the Homebuyer Tax Credit could mean for you, here is a quick refresher on this excellent opportunity for home ownership. 

Homebuyer Tax Credit-What is it?
The Homebuyer Tax Credit is a federal tax credit program that offers up to $8,000 to first-time home buyers and up to $6,500 for those who already own a home.

Are there restrictions?
The Homebuyer Tax Credit can only be used on a property that will be a primary residence for the purchaser and includes income requirements. A single taxpayer must earn less than $125,000, while married couples filing jointly may earn up to $225,000.

What is the new deadline?
You must close on your property by September 30, 2010.  The credit now applies to purchase made from January 1, 2009 through September 30, 2010. 

How do they calculate my credit?
The Home Buyer tax credit is equal to 10 percent of the home’s purchase price.

How do you claim the Homebuyer Tax Credit?
You claim the Homebuyer Tax Credit on your federal income taxes using Form 5405. Simply enter the end number from the completed Form 5405 and claim the amount on your 1040 income tax form. (It is line 67 on the 1040 income tax forms for 2009.)

What if you do not owe the full amount of the tax credit?
The Homebuyer Tax Credit is fully refundable, meaning that the credit will first be applied toward any amount that you owe on your federal income taxes. Any remaining amount will be sent to you as a check.

What do I have to buy?
Any home that would be used as your principal residence qualifies this includes an existing home or new construction (the date of first occupancy is used instead of the date of purchase completion in new construction).

Is there any way to take advantage of the credit now?
The US Department of Housing and Urban Development (HUD) allows homebuyers with FHA-insured mortgages to apply their Homebuyer Tax Credit toward their home purchase immediately, allowing them to use the extra money for down payment or closing costs. This is called “monetization” of the tax credit.