When you think of Orlando, Florida, you might think of Disney World, Sea World and vacation. Orlando is also a great place to live. Not only does Orlando have great vacation options, it also is a thriving metropolitan area with low unemployment, good schools and near ideal weather.
Orland is one of the best buyer's housing markets in the country. The median price for homes is a very reasonable $250,000 and there is plenty of inventory for sale. That gives homebuyers the best opportunity to negotiate a good home price and a favorable mortgage package.
The market also favors current Orlando homeowners who want to refinance or take out a home equity loan. Interest rates are still low, and there are many products available to meet your particular refinance, mortgage or home equity loan needs.
Types of Loans
One option is a fixed rate mortgage. This loan has a set interest rate for the life of the loan. It is a good choice for anybody who is on a fixed income because the payments remain the same throughout the loan period. It is also a good choice if you are risk averse or if you believe interest rates will rise.
Another choice is the adjustable rate mortgage. With an ARM, the interest rates goes up or down depending on the market. Adjustable rate mortgages are a good choice if you think interest rates will go down. You may be able to finance a larger loan with an adjustable rate mortgage than with a fixed rate.
Combination or hybrid loans combine features of both an adjustable rate and fixed rate mortgage. There is usually an initial period where the interest rate is fixed at a low rate. At the end of that period, the loan converts to an adjustable rate mortgage. Some hybrid loans have a penalty for early payment. Hybrid loans are an excellent choice if you do not plan to stay in the home for a long time. If you anticipate that your income will rise, a hybrid loan may allow you to buy a "higher income" home now.
There are variations on each of these loans, such as interest-only loans or 100% financing. Both of these loans are a little riskier than a conventional loan because if property values fall, you could end up owning more than your home is worth. The Orlando housing market is very stable, and home values are less likely to fall here than anywhere else in the nation. If you have little money for a down payment, 100% financing can get you into your own home. Similarly, if you are just starting out and your income will rise, an interest-only loan can make it possible for you to buy a home now.
Refinancing or Home Equity Loans
Floridians who have equity in their homes have a financial asset they can put to work for them. You can liquidate the equity in your home either by getting a cash-out refinance loan or by taking out a home equity loan.
Cash out refinancing involves taking out a new mortgage and paying off the old one. You only have one payment. Often you can negotiate better loan terms than you had with your original mortgage and lower your payments and/or your repayment period. The disadvantage of cash out refinancing is that you no longer have any equity in your home, and the home is at risk if you have to default on the loan.
A home equity loan is a second mortgage. You keep your original mortgage, and add an additional loan against the equity. The advantages of a home equity loan are that you can pay off the loan and you'll have your home equity back, and that you can usually get a favorable interest rate. The disadvantage is that you have a second payment, so your total monthly mortgage costs are higher.
Whatever your mortgage needs, you can find reliable lenders in Orlando, Florida to help you. Fill out the form below, and a broker will contact you about your home mortgage needs.
