What is the greatest minimum mortgage amount that a mortgage company can impose on a mortgage loan?

494.0067 Requirements of mortgage lenders.—

(1) A mortgage lender that makes mortgage loans on real estate in this state shall transact business from a principal place of business. Each principal place of business and each branch office shall be operated under the full charge, control, and supervision of the licensee pursuant to this part.

(2) A license issued under this part is not transferable or assignable.

(3) A mortgage lender shall report, on a form prescribed by rule of the commission, any change in the information contained in any initial application form, or any amendment thereto, within 30 days after the change is effective.

(4) A mortgage lender shall report any changes in the principal loan originator, any addition or subtraction of a control person, or any change in the form of business organization by written amendment in such form and at such time that the commission specifies by rule. Any addition of a control person who has not previously filed a Uniform Mortgage Biographical Statement & Consent Form, MU2, or has not previously complied with the fingerprinting and credit report requirements of s. 494.00611 is subject to the provisions of this section. If, after the addition of a control person, the office determines that the licensee does not continue to meet licensure requirements, the office may bring administrative action in accordance with s. 494.00255 to enforce this section.

(5) Each mortgage lender shall report in a form prescribed by rule of the commission any indictment, information, charge, conviction, or plea of guilty or nolo contendere, regardless of adjudication, to any felony or any crime or administrative violation that involves fraud, dishonesty, breach of trust, money laundering, or any other act of moral turpitude, in any jurisdiction, by the licensee or any principal officer, director, or ultimate equitable owner of 10 percent or more of the licensed corporation, within 30 business days after the indictment, information, charge, conviction, or final administrative action.

(6) Each mortgage lender shall report any action in bankruptcy, voluntary or involuntary, to the office, within 30 business days after the action is instituted.

(7) Each mortgage lender shall designate a registered agent in this state for service of process.

(8) A mortgage lender may close loans in its own name but may not service the loan for more than 6 months unless the lender has a servicing endorsement. Only a mortgage lender who continuously maintains a net worth of at least $250,000 may obtain a servicing endorsement.

(9) A mortgage lender must report to the office the failure to meet the applicable net worth requirements of s. 494.00611 within 2 days after the mortgage lender’s knowledge of such failure or after the mortgage lender should have known of such failure.

(10) Each mortgage lender shall submit to the registry reports of condition which are in a form and which contain such information as the registry may require. The commission may adopt rules prescribing the time by which a mortgage lender must file a report of condition. For purposes of this section, the report of condition is synonymous with the registry’s Mortgage Call Report.

History.—ss. 38, 50, ch. 91-245; s. 4, ch. 91-429; ss. 23, 24, ch. 99-213; s. 9, ch. 2001-228; s. 542, ch. 2003-261; s. 20, ch. 2006-213; s. 10, ch. 2007-182; s. 51, ch. 2009-241; s. 4, ch. 2010-67; s. 10, ch. 2011-71; s. 49, ch. 2014-91.

Whether you’re a first-time homebuyer or a repeat buyer, you may have questions about the mortgage process. The good news is that your loan officer can answer your concerns and point you in the right direction. But even when mortgage advisors are informative, your limited experience can result in costly mistakes.

The more you understand about mortgages, the easier it’ll be to get through the lending process without surprises or disappointments.

Here are five of the biggest mortgage mistakes to avoid.

Forgetting to Check Your Credit

Some borrowers don’t think about their credit until after they’re denied financing for a mortgage. A rejected application can be devastating, especially if you’ve already found the perfect home. Understand, however, that your credit plays an important role in the qualifying process. To get a mortgage, you need a minimum credit score of 620 for a conventional loan, and a minimum score between 500 and 580 for an FHA home loan.

Before meeting with a lender, pull your credit score and credit report from AnnualCreditReport.com (or order your report directly from the credit bureaus). Look at each item on your report and make a note of inaccurate information.

You can’t remove legitimate negative items from your report, but you can dispute errors and unfamiliar activities. If you have a low credit score, make a concerted effort to pay off debt and pay your bills on time. Payment history and amount owed makeup 35% and 30% of your credit score, respectively.

Spending the Maximum on a Property

Borrowers are allowed to spend between 28% and 31% of their gross monthly income on a monthly mortgage payment (and 36% to 43% of their gross monthly income on total monthly debt payments). Mortgage payments include principal, interest, property taxes, homeowner’s insurance, mortgage insurance, and sometimes, association fees.

After a lender reviews your application, income, and credit score, the bank then determines the maximum you can afford to spend on a property. Some homebuyers become overly excited after receiving their pre-approval amount and they begin searching for properties at the top of their budget. However, spending the maximum you can afford on a property is risky because the bank might approve you for more than you can “realistically” afford.

Keep in mind that your credit report doesn’t list all of your monthly financial obligations. It includes payments you’re making on loans and credit cards. But it doesn’t include the amounts you pay for other expenses, such as car insurance, life insurance, health insurance, groceries, utilities, etc. Therefore, if any of your regular monthly expenses are high, you’ll benefit from a cheaper home loan payment.

Shopping for properties under budget reduces the likelihood of being house poor, and it allows wiggle room to financially prepare for routine home repairs and maintenance. If you spend all your money on a house payment and bills, you may lack resources to build an emergency fund for unexpected expenses.

Messing Up a Pre-Approval

Lenders issue pre-approvals after reviewing a borrower’s application, credit report, and supporting documentation like bank statements, tax returns and paycheck stubs. But a pre-approval doesn’t guarantee a loan. If you make poor decisions between the time of getting pre-approved and closing, you can potentially mess up your loan.

It takes about 30 to 45 days to close on a mortgage loan. During this time, your financial and employment situation shouldn’t change. If you quit your job, become self-employed, or acquire additional debt, your lender may determine that you no longer qualify for financing and cancel the loan.

To avoid a closing nightmare, don’t make any drastic changes to your income, employment or credit until after closing. The bank will re-check your credit history and re-verify your employment and salary with your employer one or two days before closing.

Forgetting to Lock Your Rate

Your mortgage pre-approval also includes information on the interest rate you’ll pay, but this rate is only an estimate. Since mortgage rates can fluctuate on a daily basis, the rate you’re quoted today might differ from the rate you receive once you’re ready to close on the home loan. To protect yourself from rising rates, don’t forget to ask your lender about locking your rate once you have a signed purchase agreement.

A rate lock—which is typically good for up to 30, 45 or 60 days—is when a lender promises to give you a mortgage at a certain interest rate regardless of whether market rates increase before your scheduled closing.

Be aware that some mortgage lenders charge a locking fee—either a flat fee or a percentage of the loan balance. Depending on your lender, you may have the option of a rate lock with a float-down option. In this case, if mortgage rates decrease during your lock period, you can take advantage of the lower rate.

Not Saving a Down Payment

In the early to mid-2000s, mortgage lenders allowed home loans with zero down. Unless you qualify for a VA or a USDA home loan, this is rarely the case today. Many lenders require a minimum down payment between 3.5% and 5%. In addition to a down payment, you’re also responsible for closing costs, which can be as high as 5% of the purchase price. So if you’re thinking about purchasing a home, don’t underestimate how much you’ll need to complete a purchase.

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