Did you know 1 out of 5 houses in Florida are in a special flood zone. Let’s say you have been working hard looking at all the houses in an area and you finally find the perfect one. Amazing front, beautiful paint, huge backyard everything you could ever want but shortly after putting in an offer the real estate agent tells you the house is in flood zone v. What does that mean? Is this going to cost you more money?

Here in Boca Raton flooding is a constant issue since we live so close to the beach and can get hit hard with hurricane rains. In this article, I will go over the different types of flood zones and how they can impact your home buying process. Along with some pros and cons of buying in a flood zone.

Flood Zone Letter Codes

There are different codes to distinguish the risk of flooding in the area. If you look at a list it goes on and on with a bunch of different letter combinations but here is the easy break down to understand what letters mean what. Looking at the first letter of the letter combination should tell you imminently if you are ina high risk, moderate, or minimal risk area.

Being in the high-risk zone requires you to have flood insurance with your mortgage since there is a 1-percent annual chance of flooding. Moderate risk areas have a 0.2-percent-annual-chance of flooding. Minimal risk areas are like moderate risk areas but are higher in elevation. To know which zone a house is in you can contact the zoning department of a city or go online to the FEMA website.

Pros and Cons Of Buying In A Flood Zone

It is important to note that flood zones change every year and just because your house is not in a flood zone means there are zero risks. A perfect example is when hurricane Harvey hit Houston and a lot of houses that were not in flood zones getting damaged with many homeowners not having flood insurance.

Flood Insurance And Mortgages

If you looking to buy a house in a flood zone A or V, aka the high-risk areas, and are trying to get a mortgage with Fannie Mae, Freddie Mac, FHA, USDA, or VA loan, basically any government-related lender, you are required to get flood insurance. The most conman program is The National Flood Insurance Program (NFIP) which was made by FEMA. This cost around $708 a year. You can go private but those rates vary and the policy has to be approved by the lender you are trying to get the mortgage with.

Buying In A Flood Zone

Before committing to buying the house take some time and speak with the current owner, real estate agent, or any friends and family you might have that live in a flood zone.

Speak with the homeowner and see how long they have been living there, what insurance do they have, and what storms or events cause any damage if any. Speak to your real estate agent they see so many houses per day that they have almost seen it all. They should be able to tell you based on location what risks are present and how often it might flood based on the bodies of water nearby. Lastly speaking with friends and families who live in flood zones to get their opinions if they think it’s a big risk or if they do not mind living in that area.

If you live in Boca Raton, or anywhere in Florida, you might be considering a cash-out refinance. Why not? rates are low, the property value is increasing and you can use the extra cash. For some, it is a great move and for some, it might not be. In this post, I will go over what cash-out refinance is and some pros and cons about them. If you are a Boca Raton homeowner who wants to learn more about cash-out refinance, click or call and we will be happy to discuss your options.

What Is A Cash Out Refinance?

For all my Boca Raton Floridians who already know what a cash-out refinance is I’m sorry but let me catch everyone else up to speed. In short, you have the existing mortgage that has you have been paying off the month by month and you have your house that has value. What you can do with a cash out refinance is borrow up to 80% of your home value into cash, pay off the first mortgage, and whatever is leftover you can keep.

Let’s go into the best scenario where a cash-out refinance in Boca Raton makes total sense. If you have been living in your home for over seven years and the value of your home has increased a good amount. At the same time, you were thinking about remodeling the kitchen but you don’t want to spend that money out of pocket. A cash-out refinance makes perfect sense. To read more about cash out refinance I suggest reading the Investopedia page about it, it goes very in-depth.

How To Know If My Boca Raton Home’s Value Increased?

At the end of the day, the bank will require an official appraisal to be done to determine the value of the home. There are some ways to give you an idea of the value of your home. Firstly how long ago did you buy it and for how much? This is a good starting point as it gives you a baseline value of your home. Secondly, check out appraisal estimate sites, these give you a good idea of what the range can be but it is important not to take these so seriously. We have a tool on our page powered by Zillow to help you out with this.

Lastly and the hardest method involves math. Keep an eye out for houses like yours in the area that sell and see what they are asking for and what they sell for, you can check on the county records, have a good list of similar properties you can take the average and found the current market rate for a house like yours.

Pros & Cons Of Cash Out Refinance

Pro:

• Availability of extra cash
• Can use the cash however you want
• Can Refinance into a lower rate

Cons:

• New terms ( potentially going back to 30 years)
• The monthly interest rate can increase
• Paying closing costs for the new loan can be 5%-6% of the loan amount

What To Do With Your Cash Out Refinance

With the money you get from your cash out you can really do whatever you want with it besides buying more property as that might not go well with the bank.The two best things we suggest doing with the cash from a cash out refinance is adding value to the home and debt consolidation.

Adding value to the house can increase the value for future sells and make your day to day living more comfortable in the house. A lot of the older Boca Raton houses are overdone for a makeover since they were built in the sixties or seventies. A new kitchen, hardwood floor, or a pool remodel can increase the value and make it much nicer to be in. Second, debt consolidation can be used if you have a large amount of student debt or credit card debt you want to pay off. Overall it is a great time to refinance.

Purchasing a home is a big step if you are not paying all cash you will need to go through the mortgage loan process. This involves a lot of phone calls and emails. Back and forth with a number of professionals that in the end help you get inside your dream home.

1. Find A Homes

This is where your journey begins. Finding the home you want to spend the next thirty plus years in. Note you do not need to stay in the home for that long you can sell it two years later and pay off the mortgage if you want. But you still need to find a home Zillow is a great tool for this. This involves looking into neighborhoods, schools, stores, parks, etc to find where and what you can afford. Here is where you make your budget and decide how much you want to put down on the house.

Everyone is different but if you can we recommend at least 20%. That will save you from extra monthly fees for MIP or PMI.

2. Find A Mortgage Broker

Find a mortgage broker this will help you get pre-approved and get the loan that will pay for the majority of the house. Guess what, we are a mortgage brokerage so if you looking for a mortgage broker in the Florida area call the number on the top of the page and we will be happy to help you. If not in the Florida area, ask friends, coworkers, or family for a suggestion on a good mortgage broker. You want a good one that understands the mortgage loan process and can get you good terms from a lender. Asking your real estate agent is also a good source since they might know a lot of professionals in the area.

3. Get Pre-Approved

This step is easy and kind of goes into step 2. Ones you have your mortgage broker and find a couple of houses you are interested in you can get pre-approved. This involves answering some basic questions about yourself. This does involve pulling your credit so be mindful of that. Ones you have your pre-approval letter this shows home sellers you qualify for a loan and are a serious buyer. Some home sellers will not talk to a buyer without a pre-approval so it helps you build ground with sellers.

4. Make An Offer

With your new pre-approval letter, you can start making offers on homes. This is where you go through the list of houses you found in step one that fits you and your budget and starts ranking them from best to worst. Then you can start putting in offers to buy the house. If the seller accepts you will start the sales contract. It is super important to read the sales contract and if you have any questions reach out to your mortgage broker, real estate agent, or family and friends on their opinion. The last thing you want is some toxic clause in a sales contract that bites you in the butt 2 months later.

5. Complete The Loan Application

You might have thought you finished the mortgage application at the pre-approval but that was just the start. Using that information along with the new information you provide to your mortgage broker you will fill out 1003. Things about your past and president’s job, liabilities, income, assets, family, and more will be documented and filled out in 1003. It doesn’t take long and some people say it the real start on the mortgage loan process. Here you will get a loan estimate which estimates your monthly payment and estimates how much closing cost is going to be.

6. Processing The Loan Application

Here the broker will use your 1003 and ask for necessary documentation to verify what you claimed on 1003. This varies for every borrower but some are constant like a copy of your driver’s license, bank statements, copy of the purchase contract, etc. This step can be long or short depending on the borrower and their organization.

7. Underwriting The Loan Application

This is the final stretch of the mortgage loan process. The mortgage broker sends the file and all the documents to a lender which reviews it and decides if it qualifies for their program. Many times the file can sit for weeks in underwriting and some additional documents may be asked to further verify the information. The mortgage broker is here to help explain the banking jargon and send the documents.

8. Close On Your Loan

The date is here, the date outlined in the sales contract from long ago is finally here. By now the underwriters should have approved you and you should have received the closing disclosures outlining everything on the cost and payments you will make. This disclosure is the last one so double check it for any errors before signing. On the day of closing you, seller, agents, brokers and other professionals will come together to sign the final documents to move ownership of the home to you. Congrats! you have completed the mortgage loan process.

Kosher restaurants in Boca Raton are not hard to come by. As the years go on more and more kosher restaurants open up in the Boca Raton area. Here is our list of kosher restaurants in Boca Raton if you are visiting town or looking for a new place. Boca Raton has a wide selection of kosher restaurants from pizza to Chinese and everyone’s favorite falafel and shawarma. Please check with the restaurants to make sure their kosher certification is still valid and up to date. A good tool is totallyJewishtravel. This list is in no specific order and updated last on 9/21/20. If we are missing your favorite Boca Raton kosher restaurant email us at ben@mjslending.com so we can add it to the list.

Jon’s Place

Chill & Grill Pita

Boca Grill

Orchids Garden

Jerusalem Grill

Grove Kosher Market

Aroma Market

Winn-Dixie

Menchie’s Frozen Yogurt

CEK Caterers

Ditmas Kitchen Boca

Pita Pan Bakery

Carvel

Cinnaholic

Chefness

Lox n Bagel

Maoz Vegetarian

Roadhouse Boca

Carmela’s

Rave Pizza & Sushi

An age-old question is which is better to buy vs rent a house in Florida. Both sides do have their pros and cons. If you are planning to move to the sunshine state here are some advantages and disadvantages of buying or renting a home. Everyone is different and everyone has different needs and abilities. This makes the answer more complicated but hopefully, this article can help you make a decision. Nether renting or buying is better they both have their strength it is just a matter of figuring out what works for you. If you do choose to buy here is a good post about the pre-approval process.

Should I Buy VS Rent A House

Firstly break down your needs and wants. This will help you narrow down if you fit in either the buying or renting category. Things to consider are

1. How long you plan to stay in the area: If you plan to stay in the same area for more than five or seven years you should buy it. Renting is more short term and if you are in the same home for those years all that rent money could have gone towards a mortgage.
2. Do you like stability or flexibility? Buying is a commitment and if you like flexibility then buying is not the way. Renting allows you to move in and depending on the contract move out quickly if you do not like it. Renting allows you to see more of the area from different neighborhoods.
3. What can you afford? Buying requires much more capital and credit than renting and is something not everyone can just do. Many times people start renting for two or so years than try to get a mortgage. This also ties into the first question on how long do you plan to stay in the area.
4. What is your roommate or family plans? Renting is a great way to also meet new people through roommates. But if you are planning to start a family, buying a home can give you room to grow and more stability. Again this ties into question one and time.

Takeaway: In short it is all about time a good rule is renting is short term and buying is long term when it comes to buy vs rent a house.

Pros And Cons Of Buying A House

Pros:

• Greater privacy, When buying you become the owner and the only allowed person on the property unlike renting.
• Long term investment, Property values generally increase over time and can be a good investment in some areas.
• Building equity, A house can be a huge aspect of equity.
• Room to grow, Owning a house allows you to make necessary renovations on the property as you see fit.
• Having Pets, Some rental properties do not allow pets of any kind.
• Stability, If you have a fixed mortgage you know what the payments will be.
• Building credit, As you pay your mortgage you are building credit.

Cons:

• HOA dues, depending on the neighborhood there might be HOA dues.
• Unexpected maintenance, Things can break unexpectedly and you need to pay for it.
• Lawn care, If you have HOA dues than there are lawn requirements on how your lawn must look.
• Less mobile, If you want to move you need to sell the house or find a tenant.
• Taxes and insurance, extra costs you need to pay for.

Pros And Cons Of Renting A House

Pros:

• Easy to move in, Renting a house is much easier than buying a house.
• Easy to move out, Depending on your contract you can stay as short or long as your landlord allows.
• No repair costs, It is not your property so you don’t need to do maintenance.
• No HOA dues, Again you do not own the property so you do not need to pay dues. Some rent might go towards that but it’s not your responsibility.
• Rent might be cheaper than a mortgage

Cons:

• No credit score improvements, You are not gaining credit from paying your rent each month.
• Rent might go up, the landlord can increase rent unexpectedly. Check out this article talking about raising rent prices.
• You can not change the property, You will need the owner’s permission.
• The property might feel dated, the owner might not make cosmetic repairs so the house can feel dated.

Buying A House In Boca Raton

Boca Raton is where our main office is located and where we do most of our business. If you are still not sure about if you should buy vs rent a house in Florida read our Boca Raton page where you can see the perks of living in Boca Raton.

An appraisal is an independent third party that looks at a home and gives a fair market value based on numerous factors about the property. Of course, these are professionals are taking time out of their day to come and look at a house for hours so how much does an appraisal cost? The short answer around $400. At such a high price some people ask are appraisals even necessary to buy a home? Housing wire did a great article about that found here asking the same question. At the end of the day, the appraisal is just another bill on the long list of closings costs.

Why Do I Need An Appraisal To Buy A Home

When a seller is putting his home up for sale they have an asking price which is what the seller believes the home is worth. While this can be accurate sometimes sellers get emotionally attached to the property and have a blind eye to what the real value is. This is where an appraisal comes in an independent party takes a look at the home and its features and using multiple tactics can figure our a fair market value depending on the area.

Also if you plan to get a mortgage for the property the lender is not going to take the sellers word on the value and want a professional for their opinion. It is important to know that the lender will only lend you the lesser of the two. For example, if the seller is asking $235,000 and the appraisal is $220,000 the lender is only going to lend you a max of $220,000 meaning the seller either needs to come down on their price or you need to bring the extra $15,000 out of pocket. Here is some news about appraisals being delayed by some banks so stay on top of your current buying situation.

FAQ About The Appraisal Cost

Who Pays The Appraisal Fee

Nine times out of ten the buyer pays the appraisal fee. While nothing is stopping the seller or lender from paying the cost and you can get credit that can pay off the appraisal cost but majority time the buyer pays.

When Do You Pay The Appraisal Fee

The appraisal fee can be paid on order but most times the fee is lumped into the closing cost. This is to not annoy the buyer since they are a lot of fees and costs when buying a home that troubling them every time a fee is incurred might be annoying.

Who Orders The Appraisal

The lender and the mortgage broker order the appraisal through a licensed and trusted party. Then they will send a licensed agent to the home to find fair market value.

How To Find An Estimate Before an Appraisal

There are a lot of good tools out there giving free home price estimates based on selling prices of homes nearby. Zillow is a popular one but it should be noted that these are not a licensed appraiser and can be wrong. So use them at your own discretion but they are still a great tool if you starting from nothing.

How Much Does an Appraisal Cost In Florida

Since it is an independent third party it is hard to put an exact dollar amount on the cost of an appraisal. Most times each lender has its own apprisal company they want the home to be appraised by. The appraisal usually costs somewhere between $350 -$500. This is for someone to come out and give a look at the property to determine its market value. Note the appraiser is not an inspector and will he might note physical damage he can not say for certain if the damage is putting the property at risk. It can lower the appraisal value of the home to have physical damage.

Closing costs are the cost of doing a real estate transaction. Lender, title, insurance, and mortgage broker, fees are included in closing costs and can be found in the closing disclosure. Generally closing costs can be around 3% to 6% of the sales price of the home. Closing costs are mostly the same for any state in the United States. In Florida, the three taxes that are in the closing costs are intangible tax, state tax, and deed tax. Before you worry about how much and who you might need to pay know that the lender is required to give you a loan estimate which includes in it the closing costs and their estimates.

Even when you are just shopping a rate you can ask the broker or lender for a copy of a fee sheet. They will tell you that it is just an estimate but this will give you a better idea of who and what you need to pay.

Types Of Closing Costs

Closing costs can be broken down into different categories. This is an example of what you might be included in closings cost and does not reflect what we here at MJS charge but is what is widely used. Depending on your loan product less or more cost might be incurred. Investopedia has a great article explaining some of these costs.

• Orientation Charges
  • Application fee
  • Underwriting fee
• Services You Cannot Shop For
  • Appraisal fee
  • Credit report fee
  • Flood determination fee
  • Flood monitoring fee
  • Tax monitoring fee
  • Tax status research fee
• Services You Can Shop For
  • Pest inspection fee
  • Survey Fee
  • Title-insurance binder
  • Title- lenders title policy
  • Title- settlement agent fee
  • Title search
• Taxes and Other Government Fees
  • Recording fees and other taxes
  • Transfer taxes
• Prepaids
  • Homeowners insurance premium
  • Mortgage insurance premium
  • Prepaid interest
  • Property taxes
• Initial Escrow Payment At Closing
  • Homeowner Insurance
  • Mortgage Insurance
  • Property tax
• Other

One thing to note is that this list is for a purchase of a home that can have some of the most closings costs associated with the transaction. Refinances on the other hand can have some of the least amounts of closing costs. Things like appraisals can be waived on a refinance since the borrower already lives in the home or depending on the lender they might already own the loan.

Who Pays Closing Costs?

While this might be a simple answer the borrower does, they are the ones buying the house. While yes the borrower does pay a good portion of the closing cost many times the seller or lender will pay some of the closing cost or offer credit to pay off some costs. If the home has some issues but the seller doesn’t want to spend time fixing them they might offer to pay some of the closing costs to offset the issues with the home. If the borrower wants to accept a slightly higher interest rate they can receive some credit to pay off the closing cost. Another strategy is to speak to your broker and see if you can include some closing cost in the loan. This might be risky because it raises your loan amount which might be hard in a close loan to value situation.

When Are Closing Costs Due

After receiving the closing disclosure from your lender outlining what is included in closing costs, closing costs are due the day of closing. They are due once you sign the loan documentation and commit to the loan. Then the money can be transferred via money wire or with a cashiers check. By closing day you should already be fully aware of what’s included in the closing costs and exactly how much it is.

If you are falling behind your mortgage payments or can’t afford your current mortgage for personal reasons you have two main options. Apart from foreclosure and bankruptcy, you can do a loan modification or a refinance. A loan modification is a change in loan terms on the current mortgage you have. If the market is right you can get a lower interest rate on the current mortgage to lower your monthly payments. Another way to lower your monthly payments is by extending your current mortgage a certain amount of years. For example, if you had a 30 year fixed it can then become a 40 year fixed. To get a loan modification you need to apply with your lender and hopefully, get accepted. One thing to note before you go running off to your lender is that these are made in settlement agreements and usually require legal representation.

Is It A Good Time To Refinance

As of writing, these rates are at the lowest they have been for a while. We are seeing a lot of rates below three percent. So if you got your mortgage three years ago with a four or five percent interest rate then it would be a great time to refinance. Refinancing is a great way of debt consolidation or lowering your monthly debt and the federal government recognizes many people have increasing debts so they have created programs to allow banks to offer lower rates. If the cost to refinance a mortgage and the savings are right it is a great time to refinance.

Overall we believe it is a great time to refinance your mortgage. Even if you might be seven or ten years already into a mortgage it can still make sense. Many people might not want to go back to another 30-year mortgage because they have spent so much time paying off their existing mortgage. While that does make sense going back to a 30-year mortgage might not be so bad for a couple of reasons. For one, you might sell the house sooner than you think. In that case, it doesn’t really matter how long you have left since you will be paying it off once you sell the house. Secondly many argue that since rates are low and the costs are low you can take the savings and put it in the stock market which can return higher interest than what you are paying now. This option is more complex and is not for everyone but shows that you should take advantage of cheap money.

Cost To Refinance A Mortgage

There are multiple payments that go into refinancing a mortgage. It can cost you from $3,000 to $6,000 to refinance depending on certain factors. Fees you will have to pay are title company’s fees, Florida (or any state) Fees, Credit report fees, escrows, bank fees, and more. We here at MJS do not charge clients application or origination fees but that might also be part of it. These are all the closing costs you will need to pay to get the new mortgage. It is the cost of moving paper essentially if these costs seem like a lot do not worry as there are ways to lower these costs. Here’s a great article about the current situation and where rates are going.

Ways To Lower Cost of Refinancing

1. Speak to your mortgage broker and see what lenders are offering. Many times lenders will offer credit to cover some of your closing costs if you join their bank.
2. The opposite of that is speak to the lender you are already at and many times they will waive bank fees and swap your escrows if you refinance with them.

Is The Cost To Refinance a Mortage Worth It?

Just because you are saving money each month does not mean the refinance is worth it. A good way to see if the refinance is worth the closing cost is if the money you spend at closing can be recouped from the payments in less than two years. For example, if you spend $4,650 to refinance your mortgage to a lower interest rate and save $215 it would take 21.6 months (4650/215) to recoup that money in monthly mortgage payments. It would be worth it since it takes you less than two years to break even on the refinance.

When shopping for a new home many sellers would want a buyer to have a mortgage pre-approval before even negotiating on the property. What is a pre-approval letter and what is the process to get one? A pre-approval is a letter from the lender saying this person given all the information qualifies for a mortgage with us. This shows the seller of a home that your a serious buyer who can get a mortgage for the property. Sellers won’t want to waste their time talking to a potential buyer just to find out they don’t qualify for a mortgage. A mortgage pre-approval process involves a lot of parts so you should only get one if your ready to put in an offer for a home. Give us a call or apply now to start your mortgage pre approval process.

Mortgage Pre-Approval Process Step By Step

1. Pick A Mortgage Broker And Lender

The first step is to pick which broker and lender you want to get a mortgage pre-approval from. While you can go through multiple mortgage brokers it might become a headache with all the emails and calls. Another thing to consider is they will do a hard credit pull on your credit which can hurt your credit so going through multiple mortgage brokers can be damaging to your credit.

2. Provide The Necessary Information

This is just the same as filling out a mortgage application. If you have a co-borrower they will also need to provide the information. Things to expect you will need to know and have handy are loun amount, borrower information(age, years of school, current address and contact information), employment information, income and expenses, assets and liabilities, and declarations. Note some might ask for more information and then you might receive a loan estimate alongside your mortgage pre-approval letter.

3. Credit Pull

Once you have given them the information they will ask permission to pull your credit. Note this is a hard pull on your credit so it can affect your score.

4. Required Documentation

When you go through the process of pre-approval just like a mortgage application they will ask for the necessary documentation to support what you said in the first part. Things like bank statements, pay stubs, tax returns, driver licenses, and more can be asked. Having these things handy or knowing how to access them before getting into a pre-approval process can make the process move a lot quicker.

5. The Pr-Approval Decision

Now with all the information you have give the mortgage broker they can now make a decision if you qualify for a pre-approval and send you a letter. With that letter, you can show home sellers or agents that you qualify for a mortgage. If you do not get approved they will send you a letter on why you were not approved. Note this is the general outline of a mortgage pre-approval process and some might do it differently depending on their preferences and state requirements.