HOW RESIDENTIAL FINANCING WORKS IN MIAMI
Buying a home can seem intimidating, especially in today’s competitive real estate market. Fortunately, with the right legal guidance, many prospective homeowners can find and implement financing strategies that suit their circumstances and goals.
In many cases, it can be helpful to obtain a pre-approval letter before you actually start looking for a home. This document, issued by a lender, will outline your loan qualifications, or how much the lender is willing to let you borrow. A pre-approval letter demonstrates to sellers that you are serious about purchasing residential property and that you are eligible to make a legitimate offer.
Once you have a pre-approval letter, you can start searching for the ideal home within your budgetary range. After finding a property you are happy with, you can make an offer using the information contained in your pre-approval letter. If the seller is interested, you will initiate the closing process with a purchase and sale agreement and most likely need to place a significant sum in escrow.
Next, you will need to convince a reputable lending institution to facilitate a loan agreement. If you have a pre-approval letter, you will already have done much of the work of gathering an exhaustive level of documentation that illustrates your financial situation.
Not all financing options are created equally. The loan options available to you will depend on your specific financial circumstances. Our team can walk you through all available financing arrangements and help you make an informed decision that is consistent with your needs and goals.
Our Coral Gables residential and commercial financing and refinancing attorneys can assist you with reviewing and negotiating many types of residential loan agreements, including:
- Fixed-Rate Loans. These loans are frequently used for home purchases and involve a set interest rate. Homeowners will need to make fixed monthly payments over a period of 15 to 30 years.
- Adjustable-Rate Loans (ARMs). This type of loan allows homeowners to enjoy 5 to 10 years of fixed, low-interest rate payments. After the initial fixed period, the monthly payment will be adjusted annually to match current interest rates.
- Bridge Loans. This unique type of loan is intended for experienced homeowners that hope to purchase a new residential property before selling their old one. The loan combines the new and current mortgages until the previous home is sold, at which point its mortgage can be refinanced.
- FHA Loans. These loans are backed by the government and can facilitate a drastically reduced down payment. However, they come with several caveats, including mandatory mortgage insurance policies.
- VA Loans. Veterans of the United States Military can sometimes qualify for these loans when purchasing a qualifying primary residence. Advantages include no down payment and no requirement for mortgage insurance.
Numerous home financing assistance programs are available to many individuals and families in Miami and throughout South Florida. Specific programs are also available to first-time Florida homebuyers.
Once you have been approved for a mortgage loan and all other terms of the purchase and sale agreement have been met, you can proceed with closing the deal and obtaining ownership of the property. We can assist with all elements of the closing process.
Our firm can also assist with seller financing for residential real estate transactions. In seller financing, buyers and sellers privately negotiate a deal without the involvement of a bank or lender. This process can be more efficient and cost-effective, but the option is not always available. We can determine whether seller financing is a viable strategy in your situation and prepare the appropriate financing documents.
REFINANCING RESIDENTIAL REAL ESTATE IN MIAMI
When executed correctly, refinancing can help you access cash and save money. Whether you qualify for favorable refinancing will depend on how your creditworthiness has changed as well as current market conditions.
- Cash out equity. If you have substantial equity in the property, you can refinance to “cash out” some of those funds. This can be useful if you need liquidable assets to reorganize your finances.
- Broaden or shorten the loan term. Increasing the overall duration of your loan can potentially result in lower monthly payments. Decreasing the duration of your loan by several years or more can lower your interest rate, though you may need to pay more each month.
- Alter the loan’s rate type. Adjustable rates can drastically fluctuate in a turbulent market. Through refinancing, you may be able to switch to a fixed rate.
- Lower the loan’s interest rate and monthly payment amount. If your credit has considerably improved and/or the market has fluctuated since purchasing your home, you may be able to renegotiate and secure more favorable terms.
Refinancing is not right for everyone. Our team can evaluate your unique circumstances and work to understand your specific objectives. We can then review refinancing documentation and ensure the new terms protect your overall interests and are consistent with your goals.
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Given their inherent scale, commercial real estate transactions also generally rely on financing agreements. Many of the same principles of residential real estate financing apply: A commercial developer, business, or entrepreneur will need to demonstrate their creditworthiness and qualify for a loan. Commercial real estate financing is often even more complex, however, and additional due diligence is typically conducted on all sides of the transaction. For example, lenders will consider whether the planned use for the property is likely to produce the necessary revenue to support the loan.
Our Miami residential and commercial financing and refinancing lawyers can assist you with reviewing and negotiating many types of commercial financing options, including:
- Multi-family loans for multi-family rental properties
- Retail and office loans
- Vacant land loans for new development
- Construction loans for new builds and refurbishments
- Loans for development and investment properties
No matter your needs, our team at Perez Abello Law is ready to help you navigate financing agreements for any type of real estate property. We put our clients first and are committed to leveraging our skills and resources to help you achieve your objectives.