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Buying a Home in Florida
Florida is an ideal destination for those who are planning a dream retirement or those looking for a fresh start, with its favorable climate, cultural diversity and 1,100 miles of white sandy beaches.
If you are in the market for a property in Florida, here are some basics you need to know.
Closing Costs and Mortgage Payments
For all purchasers using a mortgage, there are closing costs to be paid. These are costs incurred when completing the purchase of a home in Florida. It's important for buyers to know what your closing costs and mortgage payments are going to be when you start to look for a home in Florida and get pre-qualified.
At the beginning of the loan process there is a fee for the credit report and appraisal, usually they are approximately $300 to $500. As the loan completes there are other expenses to be paid, such as the mortgage set-up fee, legal costs associated with the purchase and registration of the property, title insurance, and various pre-paid items, such as 12 months household insurance and association fee. As a guide, purchasers should allow around 5%-6% of the Florida property's total purchase price to cover all closing costs. This figure drops to around 1.5% if you buy your property for cash, as most of the costs are associated with the US mortgage.
We’ve prepared an estimation of the buyer’s estimated closing costs based on a $200,000 purchase of a low-rise condominium, with an 80%, 30 yr., 6.5% fixed rate amortized loan, as a primary resident and a credit score of 680+. The below listed fees are typical costs when purchasing a home in Florida counties.
Down payment: $40.000
Down Payment is your total down payment per your contract
Closing Costs: $4.000
Total upfront costs to close your loan. This is the total of your loan origination fee, points paid and other closing costs, such as:
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Most of the above mentioned fees are considered buyer's nonrecurring closing costs. Some of the fees are fixed while others are negotiable.
When you figured out how much you can afford to spend, you’re ready to start house-hunting in earnest! Read the step-by-step instructions below to get started.
The 5 Steps to Home Ownership in Florida
Get Pre-Approved » Shop for a Home » Make an offer » Get a Loan » Close the Deal
Get Pre-Approved
Getting pre-approved gives you an estimate of how much you can borrow and puts you in a better position to buy. To get pre-approved for a loan, you need to know your:
- Cash available for a down payment
- Cash available for closing costs
- Current income
- Job status
- Estimated assets
- Estimated debts
Shop for a Home
Decide whether or not you want to work with an agent. If you work with an agent, make sure they know your priorities. If you look on your own, you can get real estate listings online, as well as through local newspapers, home-sale magazines and real estate offices.
When you find a home that interests you, research the neighborhood. Use the Internet to learn more about the area. Go on your own at different times of the day, and talk to neighbors and local businesses to get a feel for what it's like to live there.
Do your research to find out about:
- Current market conditions.
- Prices of comparable homes sold in the area recently.
- Current value of the home.
Make an Offer
Present your offer and a letter of prequalification for financing to the seller yourself or through your agent. Now, your Real Estate Agent will guide you to determine how large a deposit you want to make along with your offer. Earnest money deposit in an offer to buy a home in Florida is a deposit made by the potential home buyer to show that he or she is serious about buying the house. It will be placed in escrow until the contract is either cancelled or signed by both parties.
If you want to show the seller you are serious, you will want the earnest money deposit to be large.
Get a loan
A lender actually makes the loan. A broker acts as a go-between for a buyer and a lender. Don't hesitate to ask friends or associates for recommendations. Ask the lender or broker for references if you need more input.
A lender will ask for your financial records, including pay stubs for the last 30 days and three months of bank statements. You may also have to answer tough questions about your financial history. Be prepared: gather your financial documents ahead of time.
Interest rates tend to fluctuate. Follow interest rate news and if rates are low, you may ask your lender to lock-in, or commit to that rate, that day. Just make sure the lock-in period includes the day you close on the house and doesn't incur extra charges.
Close the Deal
You'll be signing lots of papers, including:
- The settlement statement
- Title insurance
- The sales contract
- The down payment and closing costs
- Homeowners' insurance
- The title or deed to the property
During this period, you'll get an appraisal, title search and exam, home inspection and homeowners insurance. If all goes well, you'll sign the paperwork and the keys are yours!
Enjoy all your new home has to offer!
You've done a lot of research, decision making and waiting by the time you reach this point.
Now it's time to enjoy your new home!
Fizber.com gathers information from a variety of sources. Occasionally, this information may be incorrect or outdated. Please report to us inaccurate data found on the website. When reporting an error, try to be as clear and detailed as possible.