The Anna Maria Island Sun Newspaper

Vol. 11 No. 12 - December 22, 2010


Know your mortgage features

Knowledge is power. Whether you're negotiating for the purchase of a home or trying to outsmart your computer, it's best to be fully armed. The same with negotiating the maze of home financing and refinancing, tedious as it may be, it's essential to know the ins and outs.

Last week we discussed the advantages and disadvantages of refinancing your existing home mortgage based on the recent reduction in mortgage rates. If your decision is to go forward with a refinance or if you're considering the purchase of a home or second home before prices start to go up along with demand, time to get up to speed on mortgage financing.

Usually when making a property purchase, one of the first things to do is to determine the loan-to-value ratio. The LTV ratio is the mortgage amount expressed as a percent of the home's value. For example, if the purchase price or the appraised value of the property is $200,000 and your down payment or existing equity in the home is $40,000 (20 percent of the value); your loan amount will be $160,000 or 80 percent of the value making the LTV 80 percent.

The next major decision will be what types of mortgage best suits your needs. A fixed-rate mortgage is one where the interest rate remains the same over the entire term of the mortgage. Usually, these are either 30-year or 15-year terms, with 15-year terms having lower interest rates and a higher principal reduction. Adjustable rate mortgages have interest rates that change at scheduled dates to reflect market conditions with the initial rate generally lower than a fixed rate. With interest rates as low as they have been this year, adjustable rate mortgages are not as attractive as they were in the past, but may still be advantageous if the property you're purchasing is for a short period of time.

Another point that always creates stress in the minds of a buyer is whether or not to lock in a mortgage interest rate or let it float. If you lock in a rate at the time of application, that will be the mortgage rate at the time of closing regardless of what may happen in the marketplace. Normally, you can lock in for 30, 60 or 90 days. If you allow the rate to float, then, essentially, you're playing the market, which could result in either a higher or lower interest rate at the time of closing.

And if you've ever been confused when interest rates are quoted as both an interest rate and an annual percentage rate (APR), you're not alone. The interest rate is just that – the actual rate that the mortgage is amortized on. The annual percentage rate (APR) represents the interest rate as well as certain fees, points, closing costs and other expenses, even if these expenses are paid at application or before or at closing, stating what the loan is actually costing expressed in a percentage.

Finally don't let the term points confuse you either. Each point is equal to one percent of the mortgage amount. If you choose to pay a point or more at closing, it will lower your interest rate, which is called a rate buy-down. This decision should be base both on cash on hand and qualifying capabilities.

This information is just the tip of the iceberg when it comes to home financing. More information can be obtained on the Internet and on individual bank websites. However you do it, this holiday season give yourself the gift of knowledge in home financing. Don't repeat the mistakes of the past. Happy holidays!

Real Estate Transactions
Closed sales between Aug. 2 and Oct. 9, 2010

Anna Maria

721 North Shore Single family $1,100,000
512 Bayview Place Single family 800,000
216 Palm Ave. Single family 699,000
104 Maple Ave. Single family 667,500
309 S. Bay Blvd. Single family 425,000
780 Jacaranda Rd. Duplex 357,500
216 Archer Way Single family 332,500
204 Archer Way Single family 300,000
333 Tarpon St. Lot 300,000

Bradenton Beach

500 Bay Dr. S. Single family $965,200
2317 Ave. C #300 Condo 315,000
1325 Gulf Drive N. #165Condo 300,000
1325 Gulf Drive N. #166Condo 300,000
1325 Gulf Drive N. #164Condo 285,000
1325 Gulf Drive N. #161Condo 285,000
1325 Gulf Drive N. #264Condo 280,500
501 Gulf Drive N. #103Condo 240,000
1325 Gulf Drive N. #163Condo 239,800
501 Gulf Drive N. #305Condo 227,000
2211 Ave. C Single family 220,000
2311 Canasta Drive Single family 165,000
2412 Gulf Drive. N. #125Condo 160,000
2412 Gulf Drive N. #224Condo 155,000
2412 Gulf Drive N. #225Condo 155,000
1603 Gulf Drive N. #18Condo 150,000
1603 Gulf Drive N. #19Condo 150,000
117 Seventh St. N. #9 Condo 150,000
1603 Gulf Drive N. #33Condo 109,000
107 Sixth St. S. Single family 100,000
2503 Gulf Drive N. #302Condo 100,000
1603 Gulf Drive N. #34Condo 70,000


12909 42nd Terr. W. Single family $1,025,000
11900 Cortez Rd. W. RV resort
#10, #17, #28, #45 Multi-units 619,700
4224 Marina Ct. Condo 525,000
3860 Mariners Way #413Condo 274,900
12329 Baypointe Terr. Lot 140,000

Holmes Beach

528 72nd St. Single family $1,450,000
3212 Gulf Drive Single family 1,300,000
616 Hampshire Lane Single family 775,000
3009 Ave. F Duplex 763,500
403 80th St. Condo 595,000
203 76th St. Condo 584,500
525 74th St. Single family 550,000
612 North Point Drive Single family 525,000
303 61st St. #A Condo 510,000
209 69st St. Duplex 480,000
6200 Flotilla Drive #273 Condo 480,000
227 85th St. Single family 440,000
517 70th St. Single family 416,500
203 82 St. Condo 400,000
519 77th St. Single family 400,000
405 N. Harbor Drive Single family 400,000
614 Concord Lane Single family 399,900
506 74 St. Single family 390,000
405 74 St. Condo 375,000
3706 Gulf Drive. Single family 370,000
6250 Holmes Blvd. #70 Condo 355,000
6200 Flotilla Drive #274 Condo 365,000
322 64 St. Condo 350,000
207 55 St. Single family 305,000
4104 6 Ave. Condo 285,200
609 Emerald Lane Single family 285,000
2903 Ave. B Duplex 278,000
3703 5 Ave. #3 Condo 270,000
309 58 St. Duplex 270,000
3207 6 Ave. Single family 260,000
3803 East Bay Drive #2 Condo 260,000
6919 Holmes Blvd. Half duplex 250,000
2805 Gulf Drive Single family 249,000
3702 Sixth Ave. #4 Condo 230,000
504 Key Royale Drive Single family 223,000
2705 Ave. C Single family 200,900
2710 Ave. C Single family 160,000

Source: Manatee County Property Appraiser’s Office

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