Florida is one of the hottest real estate markets on the Atlantic coast, and if buying first home in Florida, you have to understand the market before you make a purchase. While much of the standard real estate advice holds as true in this state as it does in any other, the process of buying a house in Florida is somewhat different, but following these steps can help make it happen for you.
Step 1: Think About Financing First
Before you do anything else, you’ll want to get the financing for your new home in place. Most people take out a mortgage to pay for their new home, and that requires finding the right lender to meet your needs. Before you chat with a lender, you may want to think about the financial requirements necessary to buy a home. Your credit score matters to lenders. You’ll want a credit score of at least 620 to qualify for the standard mortgages available. That said, there are some low credit score loans that can be obtained, but often you’ll pay more in the long run for these loans, so if your credit score is too low, it’s best to start working to raise it immediately.
Outside of your credit score, there are other factors lenders consider. Your debt-to-income ratio is one of them. Typically you want to spend less than 36% of your total earnings each month on debt, and that should include your mortgage payment. If you’re currently spending more than that right now on your debts, it may be best to pay some of those off before you start looking for mortgages.
Additionally, you’ll want to have some cash in reserve before you talk to a lender. You typically need a downpayment of at least twenty percent to buy a home, and you’ll have to pay two to five percent of the home’s overall purchase price in closing costs. So if the value of a home is around $250,000, that translates to about $5,000 in closing costs.
Once you know you have your finances in order, the next step is to talk to a lender. He or she will help you set a budget for your new home and pre-qualify you for a mortgage so you can begin the shopping process.
Step 2: Begin Mapping Out What You Need in a Home
As you begin thinking about buying first home in Florida, you’ll want to consider what you actually want in a home. Start with the bigger picture. What does your dream home look like? How many bedrooms does it have? Is office space included? Do you want an open floor plan? What about the yard? What should it look like? Do you want a pool (consider this one carefully given the Florida climate)? Once you have a solid list of what you want in a dream home, work backward. Begin categorizing your list into wants and needs. For example, you may want four bedrooms, but you need three bedrooms. You may want a three-car garage, but it may not be a necessity.
As you shape your list, think about the future, too. What will change about your family? What might change about your job situation? Will you have to move to a different side of town? Will you need to work remotely three days a week?
Once you have a solid list in hand, it’s time to take the next step.
Step 3: Think About Location
There’s an old saying that location is everything in real estate, and it holds true even in Florida. The location of your home matters more than you think for a few reasons. Initially, you’ll want to consider where your home is located for the sake of convenience. How easy is it to get to work? To get the kids to school? Beyond that, though, think about the amenities you want most. Do you have a favorite place to eat? A favorite park where the kids like to play? Do you prefer to be within walking distance of groceries, coffee shops, or other spaces? Access to amenities counts, but so too does a space with a good mix of residential streets, green spaces, and commercial corridors. That often means that the area is thriving, so home values should remain steady or continue to increase.
Don’t forget to consider weather in your home shopping process. Weather events like hurricanes may affect the price of houses in certain areas, and the potential for flooding isn’t always covered by standard homeowners’ insurance policies, so be sure to understand whether you’ll need to take out additional insurance on any home within a certain space.
You’ll also want to learn more about the Homeowners’ Association (HOA) in each neighborhood. Some HOAs are stricter than others, and there may be deed restrictions involved within the neighborhood you choose.
Step 4: Start Shopping
After all the prep work you’ve done, shopping is actually the easiest step. Don’t overlook the possibility of building your own home within this process. Sometimes existing homes simply don’t fit the bill, and creating a customized space for you may be the right option too.
If you’re looking into buying first home in Florida, then check out our current inventory! Give us a call, stop by one of our model homes, or just peruse our site.