Michael Petruccelli asks; I know there are lots of types of mortgages - how do I know which one is best for me?

Michael Petruccelli says; You're right - there are many types of mortgages, and the more you know about them before you start, the better. Most people use a fixed-rate mortgage. In a fixed rate mortgage, your interest rate stays the same for the term of the mortgage, which normally is 30 years. The advantage of a fixed-rate mortgage is that you always know exactly how much your mortgage payment will be, and you can plan for it. Another kind of mortgage is an Adjustable Rate Mortgage (ARM). With this kind of mortgage, your interest rate and monthly payments usually start lower than a fixed rate mortgage. But your rate and payment can change either up or down, as often as once or twice a year. The adjustment is tied to a financial index, such as the U.S. Treasury Securities index. The advantage of an ARM is that you may be able to afford a more expensive home because your initial interest rate will be lower. There are several government mortgage programs,including the Veteran's Administration's programs and the Department of Agriculture's programs. Most people have heard of FHA mortgages. FHA doesn't actually make loans. Instead, it insures loans so that if buyers default for some reason, the lenders will get their money. This encourages lenders to give mortgages to people who might not otherwise qualify for a loan. Talk to your real estate broker about the various kinds of loans, before you begin shopping for a mortgage.

Michael Petruccelli asks; What do I need to take with me when I apply for a mortgage?

Michael Petruccelli says; Good question! If you have everything with you when you visit your lender, you'll save a good deal of time. You should have: 1) social security numbers for both your and your spouse, if both of you are applying for the loan; 2) copies of your checking and savings account statements for the past 6 months; 3) evidence of any other assets like bonds or stocks; 4) a recent paycheck stub detailing your earnings; 5) a list of all credit card accounts and the approximate monthly amounts owed on each; 6) a list of account numbers and balances due on outstanding loans, such as car loans; 7) copies of your last 2 years' income tax statements; and 8) the name and address of someone who can verify your employment. Depending on your lender, you may be asked for other information.

Michael Petruccelli asks; What will my mortgage cover?

Michael Petruccelli says; Most loans have 4 parts: principal: the repayment of the amount you actually borrowed; interest: payment to the lender for the money you've borrowed; homeowners insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders; and property taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year. Most loans are for 30 years, although 15 year loans are available, too. During the life of the loan, you'll pay far more in interest than you will in principal - sometimes two or three times more! Because of the way loans are structured, in the first years you'll be paying mostly interest in your monthly payments. In the final years, you'll be paying mostly principal.

Michael Petruccelli asks; When I find the home I want, how much should I offer?

Michael Petruccelli says: Your real estate broker can help you here. But there are several things you should consider: 1) Is the asking price in line with prices of similar homes in the area? 2) Is the home in good condition or will you have to spend a substantial amount of money making it the way you want it? You probably want to get a professional home inspection before you make your offer. Your real estate broker can help you arrange one. 3) How long has the home been on the market? If it's been for sale for awhile, the seller may be more eager to accept a lower offer. 4) How much mortgage will be required? Make sure you really can afford whatever offer you make. 5) How much do you really want the home? The closer you are to the asking price, the more likely your offer will be accepted. In some cases, you may even want to offer more than the asking price, if you know you are competing with others for the house.

Michael Petruccelli asks; What if my offer is rejected?

Michael Petruccelli says: They often are! But don't let that stop you. Now you begin negotiating. Your broker will help you. You may have to offer more money, but you may ask the seller to cover some or all of your closing costs or to make repairs that wouldn't normally be expected. Often, negotiations on a price go back and forth several times before a deal is made. Just remember - don't get so caught up in negotiations that you lose sight of what you really want and can afford!

Michael Petruccelli asks; What will happen at closing?

Michael Petruccelli says: Basically, you'll sit at a table with your broker, the broker for the seller, probably the seller, and a closing agent. The closing agent will have a stack of papers for you and the seller to sign. While he or she will give you a basic explanation of each paper, you may want to take the time to read each one and/or consult with your agent to make sure you know exactly what you're signing. After all, this is a large amount of money you're committing to pay for a lot of years! Before you go to closing, your lender is required to give you a booklet explaining the closing costs, a "good faith estimate" of how much cash you'll have to supply at closing, and a list of documents you'll need at closing. If you don't get those items, be sure to call your lender BEFORE you go to closing. Don't hesitate to ask questions.

Michael Petruccelli asks; What is a Hurricane Watch?

Michael Petruccelli says; Approx 48 hours ahead of a storm, forecasters will issue a Hurricane Watch. Watch for areas within the cone can expect hurricane conditions. Due to the fact that hurricanes can be erratic, everyone in that area must prepare as if the storm is headed directly for their home. If the storm changes path or speed, the time frame between a Watch and a Warning might be only 6 hours. During a Watch, the focus should be on preparing for the Warning.

Michael Petruccelli asks; What should you do to prepare just before or during a Hurricane Watch?

Michael Petruccelli says; Hurricane Watch Actions: 1) Fill your vehicle gas tank. 2) Get cash and secure papers and valuables. 3) Refill medications. 4) Fill containers and tubs with water, even if you evacuate - you may need the water when you return. 5) Secure yard equipment and furniture. 6) Shutter your windows. 7) Help neighbors with there preparations. 8) If your plans are to evacuate out of the local area, make final preparations to secure your home so you can leave as soon as an evacuation order is issued. 9) If you are registered for transportation to a public shelter, be sure you have everything you need in your "go bag".

Michael Petruccelli asks; What is a Hurricane Warning?

Michael Petruccelli says;A storm will be about 36 hours from impact when the Hurricane Warning is issued. Generally, Pinellas County Emergency Management will issue official evacuation orders, not long after the Warning. Whenever any evacuation order id issued, all mobile-and manufactured home residents must evacuate. For those not in a manufactured or mobile home, be sure to know your zone.

Michael Petruccelli asks; What are some tips for hurricane season? (part1)

Michael Petruccelli says; Here are some things you can do to prepare:

a) Organize an emergency supply kit and stock up on non-perishable food & water.

b) Create an evacuation plan, including ways to let family know you're safe after the storm.

c) Compile a list of emergency numbers, including family members, friends & neighbors.

Michael Petruccelli asks; What are some tips for hurricane season? (part2)

Michael Petruccelli says; Here are some more things you can do to prepare:

a) Make arrangements for your pets, especially if you may have to evacuate during a storm.

b) Plan home improvement projects that will make your home more resistant to storm damage.

c) Review your insurance policy to see if you're covered for storm-related damage.

d) Prepare an inventory of your belongings in case you need to file a claim.

Michael Petruccelli asks; What are the additional recommendations for child seat use from NHTSA?

Michael Petruccelli says;The following are the additional recommendation from NHTSA;

1) Always read child seat manufacturers' instructions and the vehicle owner's manual for important information on height and weight limits, and how to properly install the car seat using the seat belt or latch system.

2) Select a car seat based on your child's age and size, and choose a seat that fits your vehicle and use it every time.

3) Children in rear-facing car seats should never ride in front of an active passenger air bag.

Michael Petruccelli asks; What is a mortgage banker?

Michael Petruccelli says;  For a more complete discussion of mortgage banker, see "Types of Lenders." A mortgage banker is generally assumed to originate and fund their own loans, which are then sold on the secondary market, usually to Fannie Mae, Freddie Mac, or Ginnie Mae. However, firms rather loosely apply this term to themselves, whether they are true mortgage bankers or simply mortgage brokers or correspondents.

Michael Petruccelli asks; What is a mortgage?

Michael Petruccelli says;  A legal document that pledges a property to the lender as security for payment of a debt. Instead of mortgages, some states use First Trust Deeds.

Michael Petruccelli asks; What is a modification?

Michael Petruccelli says; Occasionally, a lender will agree to modify the terms of your mortgage without requiring you t refinance. If any changes are made, it is called a modification.

Michael Petruccelli asks; What is mortgage life and disability insurance?

Michael Petruccelli says; A type of term life insurance often bought by borrowers. The amount of coverage decreases as the principal balance declines. Some policies also cover the borrower in the event of disability. In the event that the borrower dies while the policy is in force, the debt is automatically satisfied by insurance proceeds. In the case of disability insurance, the insurance will make the mortgage payment for a specified amount of time during the disability. Be careful to read the terms of coverage, however, because often the coverage does not start immediately upon the disability, but after a specified period, sometime forty-five days.

Michael Petruccelli asks; What is mortgage insurance premium (MIP)?

Michael Petruccelli says; The amount paid by a mortgagor for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company.

Michael Petruccelli asks; What is mortgage insurance (MI)?

Michael Petruccelli says; Insurance that covers the lender against some of the losses incurred as a result of a default on a home loan. Often mistakenly referred to as PMI, which is actually the name of one of the larger mortgage insurers. Mortgage insurance is usually required in one form or another on all loans that have a loan-to-value higher than eighty percent. Mortgages above 80% LTV (loan-to-value) that call themselves "No MI" are usually a made at a higher interest rate. Instead of the borrower paying the mortgage insurance premiums directly, they pay a higher interest rate to the lender, which then pays the mortgage insurance themselves. Also, FHA loans and certain first-time home buyer programs require mortgage insurance regardless of the loan-to-value.

Michael Petruccelli asks; How much true warning do you get?

Michael Petruccelli says;   As the storm gets closer to land they start
creating a "5-day cone"  which shows the forecast path for the center of
the storm. If Pinellas County is with in the 5-day cone & you live
in Pinellas County then you need to begin your initial preparations.
This gives you time to board up your home. Contact out a of state
relative & let them know your hurricane plan & who you are using
as a hurricane contact point should your family get separated.

Michael Petruccelli asks; What benefits does that give us today?

Michael Petruccelli says; When storm systems first form they start predicting
projected paths using spaghetti models. Reflecting several different
possible projected paths. This gives all of us time to decided; what our
plan will be if you don't already have one & how to implement it in
a solid way.

Michael Petruccelli asks; 90 years ago how much warning did the residents & businesses have?

Michael Petruccelli says; While residents had minimal warning 90 years ago, weather
forecasters today start tracking storms and predicting their paths as
soon as they start to form.

Michael Petruccelli asks; When does hurricane season start?

Michael Petruccelli says; The season officially started on June 1 and will end on November 30. These dates conventionally delimit the period of each year when most tropical cyclones form in the Atlantic basin. At first everyone thinks they are prepared, but really are they? That is why shortly after the season starts we try to help with a reality check.

Michael Petruccelli asks; When was Pinellas County last hit directly by a hurricane?

Michael Petruccelli says; That was 90 years ago. The residents were surprised by the storm's ferocity, which pushed a 12 foot storm surge into Tampa Bay that cut Blind Pass, separating St. Pete Beach and  Treasure Island.

Michael Petruccelli asks; What are the names they will give to storms for 2011?

Michael Petruccelli says; 2011 U.S. storm names; Arlene, Bret, Cindy, Don, Emily, Franklin, Gert, Harvey, Irene, Jose, Katia,  Lee, Maria, Nate, Ophelia, Philippe, Rina, Sean, Tammy, Vince & Whitney.

Michael Petruccelli asks; What is a mortgagor?

Michael Petruccelli says; The borrower in a mortgage agreement.

Michael Petruccelli Real Estate: Michael Petruccelli asks; What are multidwelling u...

Michael Petruccelli Real Estate: Michael Petruccelli asks; What are multidwelling u...: "Michael Petruccelli says; Properties that provide separate housing units for more than one family, although they secure only a single mo..."

Michael Petruccelli asks; What are multidwelling units?

Michael Petruccelli says; Properties that provide separate housing units for more than one family, although they secure only a single mortgage.

Michael Petruccelli Real Estate: Michael Petruccelli asks; What is a negative amort...

Michael Petruccelli Real Estate: Michael Petruccelli asks; What is a negative amort...: "Michael Petruccelli says; Some adjustable rate mortgages allow the interest rate to fluctuate independently of a required minimum paymen..."

Michael Petruccelli asks; What is a negative amortization?

Michael Petruccelli says; Some adjustable rate mortgages allow the interest rate to fluctuate independently of a required minimum payment. If a borrower makes the minimum payment it may not cover all of the interest that would normally be due at the current interest rates. In essence, the borrower is deferring the interest payment, which is why this is called "deferred interest." The deferred interest is added to the balance of the loan and the loan balance grows larger instead of smaller, which is called negative amortization.

Michael Petruccelli asks; What are the American hot spots rated by Non-Americans.

Michael Petruccelli says; In fact 10 out of the 24 most popular American cities that have caught the eye of international homebuyers are in Florida.

Michael Petruccelli asks; What is a no-cost loan?

Michael Petruccelli says; Many lenders offer loans that you can obtain at "no cost." You should inquire whether this means there are no "lender" costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a "no-point" loan, the interest rate will be higher than if you obtain a loan that has costs associated with it.

Michael Petruccelli asks; What is a no cash-out refinance?

Michael Petruccelli says; A refinance transaction which is not intended to put cash in the hand of the borrower. Instead, the new balance is calculated to cover the balance due on the current loan and any costs associated with obtaining the new mortgage. Often referred to as a "rate and term refinance."

Michael Petruccelli asks; What is a note?

Michael Petruccelli says; A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

Michael Petruccelli asks; What is a note rate?

Michael Petruccelli says; The interest rate stated on a mortgage note.

Michael Petruccelli asks; What is a no-points loan?

Michael Petruccelli says; Almost all lenders offer loans at "no points." You will find the interest rate on a "no points" loan is approximately a quarter percent higher than on a loan where you pay one point.