You’ve decided to move to where the sun always shines, the great outdoors beckon, and income tax is non-existent. But before you pack your bags, plan your move by knowing everything that’s in store for you when buying a home in South Florida.
You’ll be surprised that living in South Florida has a unique set of requirements. Here’s what you can expect.
Down payment assistance programs
Government grants or second mortgages with delayed or forgiven payments are available. The Florida Assist Program offers up to $10,000 in the form of FHA (Federal Housing Administration), VA (Veterans Affairs) or USDA (United States Department of Agriculture) loans. This is equivalent to $7,500 conventional loans. The program also offers interest-free second mortgages to qualified participants. Meanwhile, the Florida Homeownership Loan Program offers a second mortgage of up to $10,000 for 15 years. It requires monthly payments. The HFA (Housing Finance Agency) Preferred/HFA Advantage program, on the other hand, is a loan program that allows low and moderate-income earners to own a home by lowering the down payment amount.
This important aspect of South Florida home ownership is based on the property’s value as dictated by the assessor’s office, excluding homestead exemption. You must buy the home before December 31st of the current year to qualify for homestead exemption on your primary residence. Homes in the city require slightly higher property taxes because they offer more amenities. Those in the county have lower property taxes. Here’s how to calculate your property taxes in Florida.
Private mortgage insurance (PMI)
You need this if you get a conventional loan. A PMI protects the lender from incurring loss if the buyer defaults on mortgage payments. PMI is usually mandatory if you give less than 20% down, or until your loan balance is equivalent to 80% of the purchase price. A PMI is also necessary if you’re refinancing with an equity of less than 20% of the home value. Payment is about 1% of your mortgage balance yearly. Rates vary according to your down payment and credit score. VA loans don’t require mortgage insurance. But you pay a loan funding fee that costs 1.4% to 3.6% of the purchase price upon closing.
Most homes in the area stay 75 days on the market. Seasonal changes usually come into the picture, however. History shows that the fastest sales occur in March, when houses stay on the market for 68 days. If you’re searching for a home at this time, you should be ready to move fast, because properties get sold faster than usual. On the other hand, you have more time to go house hunting in December, when homes stay seven days longer than the annual average.
Certain inspections are unique to the area. A law requires home sellers to reveal radon hazards. Although a radon test is not required, it’s better to have one for your own safety and peace of mind. This will also spare you from extra cost. The good news is that the government provides free radon test kits. The majority of VA (Veterans Affairs) and FHA (Federal Housing Administration) loan applications, on the other hand, needs termite and pest inspections before a buyer completes the purchase process. You also need inspections to check the roof, foundation, electrical system, HVAC (heating, ventilation, and air conditioning) system and plumbing.