By Cheri F Rosen
As mortgage rates continue to increase with no ceiling in sight, both my voicemail and my inbox are exploding with questions and requests for clarity. With more than a decade of successful real estate property experiences and sales, I am rather familiar with myriad financing scenarios. Nevertheless, with such an outpouring of anxiety, I decided to engage my colleague, and mortgage expert, to address many of my readers’ questions and concerns.
After 30 years in the business, Chavi Kahan knows everything there is to know about financing a home. Chavi has not only worked in every aspect of the field, but had also owned her own highly successful mortgage brokerage for 14 years. As the owner of the NY based Odyssey Funding, Chavi found financing for thousands of clients in over a dozen different states. I first learned of Chavi’s expertise years ago as her name popped up on an ever-increasing amount of my New York Buyers’ paperwork. Even though many of my clients had written a “cash offer,” they often were financing behind the scenes. This was a very common practice since sellers always welcome a “cash deal” and with lower mortgage rates, buyers could put their money to better use elsewhere. Before moving to Florida, Chavi represented many Northeasterners making the move South. Now that she has purchased her own gorgeous home near Anshei Emunah in Delray Beach (more about that in a future issue) Chavi has become my go to for all financing issues, as she has truly become a Florida expert.
Cheri: Which type of financing do your customers tend to get?
Chavi: Clients have literally thousands of choices. Many think it is Conventional, FHA, or VA and that’s it! That’s not the case at all. Homebridge Financial offers absolutely every product available and since every person and property is unique, it is important to be aware of every option. Since each client and situation is different, by knowing all the options, I can become creative and tailor a loan to the client, rather than fitting the client to the three or four loans that a bank, or inexperienced loan officer might present. For instance; a buyer may be entitled to countless programs that are available in Florida but not in other states.
Cheri: What unique loans does Florida offer that one might not be aware of?
Chavi: Florida has many grant programs, but The Florida Hometown Heroes program in particular is an amazing option for buyers in many different careers. Once imagined for veterans, police officers, and firefighters, it now allows, doctors, nurses, EMTs, paramedics, therapists, teachers, and so many others the amazing benefit of a second mortgage at 0%!
Buying a property in a CRA district is also a Florida incentive program. With this plan, a buyer can purchase a property in an area determined to qualify as CRA and receive rewards such as lower financing rates and decreased down payment requirements.
Cheri: Some buyers of mine tend to seek owner financing since they may not have access to tax returns to indicate their financial status. But, owner financing tends to be very costly. Do you know of other options?
Chavi: Of course, there are many other nontraditional paths to financing: One may qualify with just a 1099, or bank statements, or even liquid assets. Put simply, if you have no income but have millions of dollars, we will give you access to millions of dollars!
Cheri: People with bad credit naturally assume that they cannot get financing. Is that correct?
Chavi: Not at all. You may not be eligible for the same rate as conventional financing, but again, there are literally thousands of avenues to pursue.
Cheri: What about first time homebuyers? They can get financing by just putting down a 3% down payment correct?
Chavi: Yes, but let’s be clear about what “first time” actually means in order to qualify. It does NOT mean first time in their life. If they have not owned a home in the past three years, they are actually considered a “first time homebuyer” and are eligible for that program.
Cheri: Some buyers are conflicted as to whether to settle on a less than perfect purchase now before rates get even higher, or to hope that the financing percentage doesn’t go too crazy before they find the home of their dreams, or even purchase new construction that could take a year to build. What would you advise?
Chavi: I actually offer a special program wherein a buyer can lock in a rate today and not close on a home for 360 days! This product, known as “Lock and Shop” is available even if you have not yet identified the property that you will purchase! It is designed for conventional loans, but as of 2023 the limits for a conventional (as opposed to Jumbo) loan have been increased to $715,000. We can also underwrite and approve your financing with a firm commitment prior to identifying a property you want to purchase, which is almost as good as a cash offer and allows you to jump into an opportunity that requires a quick closing.
Cheri: Last question Chavi; do you think that now is a good time to purchase a home in South Florida, considering the rapidly increasing mortgage rates?
Chavi: Absolutely. Property is an asset that appreciates over time. It’s practically impossible to save money at the same pace that a property’s value can increase. We are in a highly inflationary time, mortgage payments remain stable and fixed, while rent payments increase. Why increase your landlord’s equity and payoff your landlord’s mortgage, when you can be building your own equity? Investment property opportunities are fantastic now, especially due to the high rents, and because some previously potential buyers have been priced out of the market. For whatever reason a purchase may be in your plans, if rates drop in the future, you can always refinance and take advantage of the lower rates. Current rates are still considered low from a long-term perspective, even though we’ve gotten spoiled by the extremely low rates the past few years
Chavi Kahan is happy to answer all your questions concerning financing a home in Florida, or pretty much anywhere else. Chavi can be reached at firstname.lastname@example.org or 917-613-3819.
Cheri F Rosen, of Lang Realty, has been a realtor in South Florida since moving to Boca Raton over a decade ago. You can learn more about real estate in South Florida by calling Cheri at 561-221-2233 or visiting Cheri’s website: southfloridacondosandhouses.com or just Google the words Orthodox Boca. Cheri’s website is the top search result.