Buying a home anywhere in the United States can be challenging, but in Florida, it can be a particularly difficult process. Wondering why? Supply here is incredibly tight, and demand is on the increase because there are so many advantages to living in the state. That means one thing for potential homebuyers – a tough market in which to buy. What should you know before you start shopping for a home in this state? What do first time home buyers need to know as they explore the Florida real estate market? Here are a few tips you may want to keep in mind.
Loan Options Are Different
Financing a home purchase is always the most arduous part of the home buying process, and that’s as true in Florida as it is anywhere else. Fortunately, you’ll find help and resources in this state that you often won’t in other states. Florida Housing, initially created in 1980, helps to ensure that residents throughout the state have a number of different affordable options to make a purchase. While there are qualifications you’ll have to meet to take advantage of these programs, just having the option can be incredibly helpful for first-time home buyers. The Florida Homebuyers Program offers a number of different 30-year fixed-rate mortgage options through those lenders who choose to participate throughout the state. They also offer a Military Heroes program for veterans.
In addition to the Homebuyers Program, you can take advantage of the Down Payment Assistance Program. This option means you get both down payment and closing cost assistance in the form of a second mortgage. It’s simply tacked onto your other loan so you can afford to make your dream of homeownership happen.
The state has a Mortgage Certificate Program as well that works as a federal income tax credit to be used with a first mortgage. That means you’ll actually have the income you need to meet the various costs of homeownership.
Finally, Florida Housing offers a State Housing Initiative Partnership that ensures first-time homebuyers can overcome various financial challenges that often occur within certain communities in Florida.
To be eligible for any of these programs, though, the property you’re purchasing must be your primary residence, and it must be located in the state of Florida. You’ll need a credit score of 620 or higher and you do have to take a 6 to 8-hour buyer education course.
If these options don’t work out for you or you’re simply on the hunt for other options, keep in mind that there are a number of national first time home buyer products available to help people get the home of their dreams. FHA loans, for example, are ideal if your credit score is a bit low. FHA can grant you a loan if your credit score is as low as 580, they often offer low downpayment options like 3.5% of the purchase price. VA loans are also available for those who have served or currently serve in the military. Additionally, USDA loans may be an option for those looking to buy in parts of rural Florida.
No matter what type of loan you want to get, the key is to work with a lender to understand the credit score requirements, how much money you need in the bank, and the other requirements necessary to pre-qualify on a house.
The Market Moves Fast
Beyond understanding the finances involved in buying a home in Florida, you also need to understand just how quickly the market moves throughout the state. Pre-qualifying for a home loan is absolutely essential in this market because the median time from listing to contract is currently just 12 days. If you see a property you want in Florida, it’s imperative that you make an immediate bid on that property if you’re going to get what you want because the chances are good that the property won’t be around if you think about it for a few days. Often, that means having the financial documentation that you CAN really buy the home when you sign on the dotted line.
Weather Is a Factor
If you’ve never lived in Florida, you may not realize just how large of a factor weather plays, particularly during hurricane season. Some homes are more susceptible to flooding and hurricane damage than others, and that may mean that you have to not only prepare for storms differently than you might in other areas but also that you may need to take additional kinds of insurance out on your property. For example, a traditional homeowners’ insurance policy doesn’t typically cover floods, so you may need to add flood insurance if you’re in an area with the potential for flooding.
For most people, a home is the biggest purchase they’ll ever make, and if you’re buying a house in Florida from out of state or this is the first time you’ve ever bought a home in Florida, understanding what do first time home buyers need to know before you start shopping is a must. If you’re ready to start looking at homes, check out our current inventory or contact us today!