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All You Need to Know About Tampa Bay Mortgages

Tampa Bay, Florida, is rich in both culture and history. Famous for its gorgeous sunsets, the city offers everything from professional sports to museums to some of the most beautiful beaches in the world. Tampa Bay's major attractions include Busch Gardens Tampa Bay, The Florida Aquarium, and Lowry Park Zoo.

Known as the "Big Guava" to locals, Tampa has a bustling job market with finance, technology, and health care positions. This makes it an ideal place to call home—and an excellent area to consider when buying a house or refinancing your current mortgage.

What are the different types of mortgages in Tampa Bay?

Getting your mortgage in Tampa Bay is not something that should be done lightly. Many different mortgages have varying interest rates and fees, so it's essential to do your research before applying. Here are some of the most common types of mortgages in Tampa Bay:

Can I get a mortgage if I have bad credit?

If you have a lower credit score, it can be harder to get a mortgage. You may need to pay a larger down payment or higher interest rate than someone with good credit. However, help is available for people with bad credit—don't give up.

Some Tampa Bay mortgage lenders specialize in bad credit mortgages, making finding one who will work with your situation more manageable. These loans are typically more expensive than conventional mortgages because the lender assumes more risk. But they might be worth it if they let you buy a home when other options would leave you out in the cold.

Do Tampa Bay lenders check your bank account?

The simple answer is: yes, they do. But don't worry! It's not quite as invasive as you may think.

For the lender to work out what kind of mortgage deal you can get, they need to know how much money you have in your accounts and whether this money has been in there long enough that they can be sure it will still be there when they transfer the funds over to your new home's seller or developer.

So, if you've just won $100 million on a scratch card and want to buy a house with all cash, then it might take a while for the transaction to clear.

How much does my credit score matter?

If you have a good credit score, then it's likely that getting a mortgage won't be too difficult. However, if your credit score is low or bad, things might get more complicated, and lenders will probably want proof that you can afford the repayments on time each month before agreeing to lend you any money.

Is it hard to get a mortgage in Tampa Bay?

It depends on many factors, including your credit score, your credit history, the lender you work with, and the type of loan you want.

We recommend getting pre-approved for a mortgage first to know what kinds of homes you can afford at this time. Your pre-approval will last for several months and give you peace of mind while searching for your new home.

Are you thinking of making a move to the Tampa area?

How many homes can you own before you need a commercial mortgage?

If you're looking to get a Tampa Bay mortgage, here is the answer to one of the questions people often ask most: How many homes can you own before getting a commercial mortgage?

The good news is that there is no set number of homes, which means you need a commercial mortgage. But there are some general guidelines.

If you have four or fewer homes, that's not too bad. The bank should be able to handle it, especially if they're all in the same area or nearby each other.

If you have five to ten homes, things start becoming trickier. You'll probably want to look at commercial loans for your mortgages because they'll be easier.

But if you've got twenty houses in multiple locations and want to buy two more? It would be best to consult with several different lenders before deciding on your future purchases when it gets complicated!

Can I negotiate my mortgage rate?

After receiving a mortgage rate, it might not be the best choice for your situation. In other words, you may want to negotiate your mortgage rate.

There are many ways to negotiate a mortgage rate lower than your lender's offer. These include dealing directly with the bank or credit union providing the loan and looking into any special offers the lender may have for their current customers.

If you're looking to negotiate with a bank or credit union, start by calling them up and speaking with an agent about any special deals they may offer in exchange for new or existing customers opening accounts at their institution (these offers can include cash bonuses).

Then ask them if they will reduce your interest rate on your mortgage loan based on these factors: how long it has been since you opened an account there; whether or not this will be your first-time financing through them; whether any other incentives could be applied such as loyalty points earned through making regular monthly payments each month without fail.

Tampa Bay Mortgage Pre-Approval process

The pre-approval process is the only way to know precisely what you can afford and should be completed before you start shopping for a home.

A pre-approval does not obligate you to take out a mortgage from any lender and is simply a "good faith estimate" of your loan amount based on the information that you have provided.

You will complete an application and provide W2s, paystubs, bank statements, and relevant financial documents. Once the lender receives all of your documents, they will order an appraisal and title work if necessary.

They will run it through our automated underwriting system, verify your employment and review all documentation. They then issue a formal pre-approval letter detailing the loan terms, including down payment amount, interest rate, term of the loan, monthly payment amount, and closing costs.

Interest Rates for Tampa Bay Mortgage

Interest rates are an integral part of your Tampa Bay mortgage. They dictate the amount you pay for the loan (your monthly payment) and the amount of money you pay to borrow over time.

Typically, interest rates fall into two categories: fixed or adjustable. Fixed interest rates remain constant over the life of your loan, while adjustable interest rates change periodically—usually after a certain period, such as two to five years.

Tampa Bay Florida Downtown City Skyline

The factors that Tampa Bay Lenders Consider for Mortgage

Credit Score

Your credit score is between 300 and 850, which indicates the likelihood of you repaying your loan. Lenders base this on your payment history, length of credit history, the amount owed, credit mix, and new credit inquiries.

If you have excellent credit (720 or above), you'll get the best interest rates in a Tampa Bay mortgage and probably won't need mortgage insurance. Credit scores below 620 are a higher risk for lenders. The higher your score is above 620, the lower interest rates you'll be offered by banks.

You can check your credit score with any significant national bureaus: Equifax, TransUnion, or Experian. An excellent way to improve your score is to pay off any debt you currently owe. The more money you pay toward your debt each month instead of just paying interest fees, the less time it takes for you to become debt-free while also improving your score!

Debt to Income (DTI) Ratio

Your debt to income (DTI) ratio indicates the amount of debt you have compared to your income. The lower this number is, the better. Tampa Bay lenders have maximum DTI ratios that they will consider for a loan application, and your DTI should be below this level.

You can calculate your own DTI by dividing total monthly expenses by gross monthly income. For example, if you spend $2,000 per month on various bills and make $3,500 per month in gross pay, your DTI is 57%.

In Tampa Bay, we recommend keeping your DTI ratio below 36% at most.

Housing Expense Ratio

If you are looking to get a mortgage in Tampa Bay, your housing expense ratio is another factor that will affect your chances. This is the percentage of your monthly income used to pay your mortgage and any other recurring housing costs.

The formula for calculating this percentage is (Total Monthly Payments + Monthly Insurance Premiums + Monthly Property Taxes) ÷ Gross Monthly Income = Housing Expense Ratio.

A good housing expense ratio usually falls between 25% and 31%. If yours doesn't fall within this range, there are several ways you can improve it. Reduce total monthly payments, increase gross monthly income, or find a different home with lower insurance premiums and property taxes.

However, if you raise your gross monthly income by getting a second job or another source of income, beware. If you don't spend all of the extra cash flow on reducing total monthly payments (home loan principal), then you could end up paying thousands more over the lifetime of your mortgage!

Loan Programs

The two main types of mortgage loans are government and conventional. Private lenders such as banks, credit unions, and mortgage companies offer a conventional loan, while a government-insured loan is insured and backed by the federal government.

Each type of loan will have specific interest rates and down payment requirements. The program you choose will also determine your minimum credit score to qualify for the loan.

Mortgage Insurance (PMI)

If you borrow less than 80% of the purchase price, you may not be required to pay mortgage insurance (PMI). This is a significant saving for the life of your loan. If your down payment is 20% or more, PMI will not be a requirement for your loan.

However, if you borrow more than 80%, you will most likely be required to carry Private Mortgage Insurance until your loan balance reaches 70-80% of the original purchase price. This can take years to happen and adds hundreds to thousands of dollars a year to your payments for the life of the loan.

Down Payment & Reserve Fund Requirements

How much should you put down? Tampa Bay mortgage down payment is typically 20% of the total home price. If you want to buy a $200,000 house, you'll need to pay $40,000 upfront for a lower interest rate and other perks.

What's the difference between a down payment and a reserve fund?

A down payment is when you pay for part of the home upfront. A reserve fund is money that goes into an account to cover unexpected expenses or repairs in the future when something breaks or malfunctions in your house.

If something goes wrong after your Tampa Bay mortgage closes escrow and you're living in your new home, you'll have this fund.

What's the difference between a down payment and closing costs?

Closing costs are fees associated with getting a loan from a bank to purchase your new house (closing costs, on average, add up to 2-5% of the total cost of buying your home).

They might include title search fees (the fee charged by an attorney or title company for researching whether there are any issues with who owns the property) and attorney fees (the fee charged by an attorney for doing work related to transferring title).

Closing costs also include an appraisal fee (the charge imposed by an appraiser for assessing how much value your property has) and a credit report fee (a small amount paid by some lenders so they can check out your credit history).

Your lender will give you more information about these different charges before you close on Tampa Bay Mortgage.

Tampa Bay Mortgage and What the Future Holds

As more people relocate from other states and countries to Florida each year and Tampa Bay's economy continues expanding, forecasts show continued growth through 2022. Experts predict home values will increase significantly over the next 12 months.

If you are looking for a place that offers excellent weather year-round and plenty of career opportunities and entertainment options, you should look at what Tampa has to offer!

Find The Right Mortgage

For more than 20 years, Phil have been helping customers achieve their home purchase and refinance goals by providing them with invaluable resources and support.

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Phil Ganz

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