Here's a few things to know about buying real estate in Miami and the Ft. Lauderdale Metro areas. 

Talk to a mortgage broker now.  He or she will help you figure out the maximum price that you can afford.  You can also try a home buyer's calculator.  

Futhermore, you are free to choose any lender you like, however in order for the purchase process to stay on track it is prudent to work with a lender/s that the realtor refers you to in oder to avoid most potential financing obsticales that may occur.

1. If you have never bought real estate before, you can take money out of your IRA without a penalty!  Check with the IRS for more information at www.irs.gov

2. As a homeowner, the interest you pay on your mortgage interest and real estate taxes is tax deductible.  Use the chart below to find out which loan program best suits your needs.
   

3. Use the chart below to help you determine what type of mortgage best suits your needs. Rember the determining factor is how long will you own the respective property for.
   

4. 30 YEAR FIXED RATE MORTGAGE	plan to live in property more than 10 years like total payment stability	Interest rate & monthly payment remain the same for 30 years
   10/1 YEAR ADJUSTABLE RATE MORTGAGE	plan to live in property more than 10 years like initial payment stability, can accept later changes OR plan to move within 10 years want loan to remain in force in case plans change	Interest rate & monthly payment remain the same for 10 years Starting the 11th year, interest rate adjusted every year, so payment is subject to change every year for remainder of loan
   7/23 (2-Step) or '30 due in 7' MORTGAGE	plan to live in property more than 10 years can tolerate one payment adjustment OR plan to move within 7 years want to remain in force in case plans change	Interest rate & monthly payment remain the same for 7 years Conversion option: On the 8th year, interest rate adjusted to reflect prevailing interest rates, resulting payment will remain the same for remainder of loan
   7/1 YEAR ADJUSTABLE RATE MORTGAGE	plan to live in property more than 7 years like initial payment stability, can accept later changes OR plan to move within 7 years want loan to remain in force in case plans change	Interest rate & monthly payment remain the same for 7 years Starting the 8th year, interest rate adjusted every year, so payment is subject to change every year for remainder of the loan
   7 YEAR BALLOON MORTGAGE	plan to live in property more than 7 years are willing to refinance at prevailing market rates OR plan to move within 7 years like payment stability	Interest rate & monthly payment remain the same for 7 years At the end of 7 years, loan is due in full. Borrower must refinance into new loan at prevailing interest rates
   5/25 (2-Step) or '30 due in 5' MORTGAGE	plan to live in property more than 5 years can tolerate one payment adjustment OR plan to move within 5 years want loan to remain in force in case of plans change	Interest rate & monthly payment remain the same for 5 years Conversion option: On the 6th year, interest rate adjusted to reflect prevailing interest rates, resulting payment will remain the same for remainder of loan
   5/5 & 5/1 YEAR ADJUSTABLE RATE MORTGAGES	plan to live in property more than 5 years like initial payment stability, can accept later changes OR plan to move within 5 years want loan to remain in force in case plans change	Interest rate & monthly payment remain the same for 5 years Starting the 6th year, interest rate adjusted every 5 years (for 5/5 ARM) and every year (for 5/1 ARM)
   5 YEAR BALLOON MORTGAGE	plan to live in property more than 5 years are willing to refinance at prevailing market rates OR plan to move within 5 years like payment stability	Interest rate & monthly payment remain the same for 5 years At the end of 5 years, loan is due in full. Borrower must refinance into new loan at prevailing interest rates
   3/3 & 3/1 YEAR ADJUSTABLE RATE MORTGAGES	plan to live in property more than 3 years like initial payment stability, can accept later changes OR plan to move within 3 years want loan to remain in force in case plans change	Interest rate & monthly payment remain the same for 3 years Starting 4th year, interest rate adjusted every 3 years (for 3/3 ARM) and every year (for 3/1 ARM)
   1 YEAR ADJUSTABLE RATE MORTGAGES	want to take advantage of lowest rate possible are willing to accept yearly payment changes OR cannot qualify at higher rate programs	Interest rate adjusted every year, so monthly payment is subject to change every year for entire 30 year loan term

    

   Credit scores and perceived risk levels of how Lenders categorize you:

   Credit Bureau Scores range from 300 to 900 points, the higher the score the lower the risk of default.

   Credit Score Scale:

   Excellent:                        720-850

   Very Good:                  700-719

   Acceptable:                 675-699

   Uncertain:                   620-674

   High Risk:                   560-619

   Extremely High Risk:     500-559

Therefore the higher the risk you are based on your credit score, the more interest and upfront points the lender may charge to justify loaning you the money.

Facts and Fallacies about your Credit Score

Fallacy: My score will drop if I apply for new credit. Fact: If it does, it probably won't drop much. If you apply for several credit cards within a short period of time, multiple requests for your credit report information (called "inquiries") will appear on your report. Looking for new credit can equate with higher risk, credit scores are not affected by multiple inquiries from auto or mortgage lenders within a FOURTEEN DAY period of time. Typically, these are treated as ONE inquiry and will have little impact on the credit score. Fallacy: My score determines whether or not I get credit. Fact: Lenders use a number of facts to make credit decisions, including your FICO score. Lenders look at information such as the amount of debt you can reasonably handle given your income, your employment history, and your credit history. Based on their perception of this information, as well as their specific underwriting policies, lenders may extend credit to you although your score is low, or decline your request for credit although your score is high. Fallacy: A poor score will haunt me forever. Fact: Just the opposite is true. A score is a "snapshot" of your risk at a particular point in time. It changes as new information is added to your bank and credit bureau files. Scores change gradually as you change the way you handle credit. For example, past credit problems impact your score less as time passes. Lenders request a current score when you submit a credit application, so they have the most recent information available. Therefore by taking the time to improve your score, you can qualify for more favorable interest rates. Fallacy: Credit scoring is unfair to minorities. Fact: Scoring considers only credit-related information. Factors like gender, race, nationality and marital status are not included. In fact, the Equal Credit Opportunity Act (ECOA) prohibits lenders from considering this type of information when issuing credit. Independent research has been done to make sure that credit scoring is not unfair to minorities or people with little credit history. Scoring has proven to be an accurate and consistent measure of repayment for all people who have some credit history. In other words, at a given score, non-minority and minority applicants are equally likely to pay as agreed. Fallacy: Credit scoring infringes on my privacy. Fact: Credit scoring evaluates the same information lenders already look at - the credit bureau report, credit application and/or your bank file. A score is simply a numeric summary of that information. Lenders using scoring sometimes ask for less information - fewer questions on the application form,for example.

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