Buying a house can be an emotional experience. From painstakingly pinching pennies to saving for a down payment to anxiously deciding where you want to put down roots, it's no wonder the median age for first-time homebuyers has drifted up to 33. Buying a home is a big decision and likely the most expensive purchase you'll ever make.
Thankfully, by equipping yourself with an understanding of the home-buying process and partnering with a trusted realtor and lender, you can easily replace those feelings of worry with excitement as you take the plunge into homeownership.
Determining your budget is a great place to start before you begin falling in love with homes. In addition to the purchase price, you must account for property taxes, insurance and potential homeowner association fees. A mortgage calculator can help estimate your monthly mortgage payment to ensure you have enough additional budget to cover other must-haves, such as food, electricity and reliable transportation.
Consider your financial situation. It may seem like obvious advice but avoiding buying something you can't afford is crucial. Even though you might qualify for a larger mortgage, ensure you feel comfortable with those monthly payments over time.
Mortgage loans typically require a consistent income, a good credit score and a down payment. Your credit score tells the bank about your borrowing history and where you fall regarding lending risk. If you have a history of late payments, delinquent accounts and other negative marks on your credit report, work on improving your credit score before you apply for a mortgage.
As you plan, keep in mind that your mortgage isn't going to be your only expense. You'll need the down payment ready before you get your mortgage. Though a 20% down payment is standard to avoid private mortgage insurance (PMI), many lenders will approve financing with as little as 3% down on a home. Be sure to account for other costs related to home purchases, like closing costs, moving costs, home inspections and appraisals.
Florida offers homebuyers a vast array of home types, from condominiums and townhouses to single-family homes. Determining which type of home will meet your needs now and in the future will help ensure you're happy with your decision for the long term. Condos tend to come with a lower price tag and cover common area maintenance, but you'll have to pay a monthly fee and abide by the association rules.
Single-family homes give you more freedom and privacy but are usually more expensive. In addition, you're also responsible for all repairs and maintenance. Consider your priorities, what you want to get out of your home, the types of homes available in your market and the price.
Along with the type of home you're interested in, think about your must-haves. How many bedrooms and bathrooms do you need? Do you prefer new construction or a home with some history? Home preferences might also include choosing between pool or patio features. What's nice to have for some might be a necessity for others. Think about which features are most important to you in the long run and remember that you can always renovate or potentially build an addition.
Make a checklist of your must-haves, wants and the features you do not want. It can be especially helpful during your home search as you compare properties. Be mindful that the one detail you cannot change is location.
Proximity to your workplace, transportation options and the quality of public schools are often among the top considerations when purchasing a new home. Easy access to grocery stores, healthcare and entertainment options should also weigh into your decision.
Buying a home in Florida also means you're susceptible to severe weather. Research the location to see if you're at greater risk for hurricanes, flooding and other severe weather events. Some areas may require flood insurance. You can also compare the location you're interested in against the FEMA flood map.
Research the area of your potential home to determine how safe it is for your family. A thorough online search will uncover news stories and crime reports for areas you're considering. The Nextdoor app is another excellent resource to use in tandem with an online search.
Once you know the type of home you want, your desired features and where you want to put down roots, it's time to explore Florida mortgage lenders and gain mortgage pre-approval. Remember to consider the value of going local for your mortgage. Community banks often have dedicated mortgage loan officers who possess a deep understanding of the Florida realty markets and are a wealth of knowledge.
Once you select a lender, you should get pre-qualified for your mortgage. Your lender will also help you determine how much home you can afford based on self-reported financial information and help you choose a mortgage that meets your needs. When you apply for your home mortgage, your lender will issue a pre-approval letter, a more accurate look at how much home you can afford based on your credit, employment, income and other personal details.
The guidance of an expert realtor can't be understated, so choose wisely and do your research. Asking family and friends for a recommendation is a great place to start, as are online resources like realtor.com. Your realtor should have local experience and deep knowledge of the areas where you're considering buying. A good realtor will scour the market for homes that meet your needs in addition to guiding you through the negotiation and closing process. In Florida, all real estate agents are trained in fundamental real estate law, so they can support you as you navigate the paperwork and negotiation.
Look for open houses on homes you're interested in purchasing. Your realtor can assist you with finding open houses and booking private showings. This is a great way to gather data for the homes you're interested in and will be good practice for visiting other homes. Take your checklist of must-haves and wants. The sooner you discover issues or problems with the house, the better. Remember that some compromise may be necessary (your dream home may need some work to get there).
Asking questions during an open house gives you insights into whether a home is right for you. You'll want to know the home's history and the building materials used, such as concrete block, stucco, masonry or wood framing. Be sure to ask plenty of questions because a property inspection does not always uncover every defect.
Your realtor can help you make the best initial offer for a home and negotiate accordingly. Based on the asking price, neighborhood, and other factors, your realtor will help you present a smart offer within reason and timely to beat other interested parties.
If you've received advance approval for a home mortgage, you will want to stay within your approval limit when making an offer. It's best to give yourself some "wiggle room" if your initial request gets declined and you must return with a counteroffer. Many home sales go through several counteroffers before the buyers and sellers reach an agreement. Nailing down a deal for an offer can take time, so be patient as you work through this process.
When you invest money in your home, you'll want to protect your asset against the unexpected. Property damage can happen anytime. Homes can flood, roofs can suffer damage in a storm and fires can start in the blink of an eye. Purchasing adequate homeowners' coverage is very important. A homeowners insurance policy is reasonably affordable and can give you the peace of mind you need.
If you're taking out a mortgage in Florida, homeowners' insurance may be required, so make sure you speak with a licensed insurance agent about your options before closing the home. If you need help figuring out where to start, your mortgage lender or real estate agent can provide referrals.
After you and the seller agree on the price and complete all the inspections, you're ready to close on your first Florida home! The date you close on your new home is listed on the agreement of sale you signed. This is known as the closing date, and it's the day when you'll transfer the money for the home and take ownership of your new property. If you have any questions about your home purchase, you need to ask them before the closing date, so contact your real estate agent or lender immediately.
On closing day, be prepared to pay for any closing costs, which are fees charged by the title company, government, attorneys and anyone else who is owed money related to the transaction. Whether the closing costs are the buyer's or the seller's responsibility depends on the agreement you signed with the seller. Your real estate agent can tell you more about closing costs and should also provide an estimate of how much those closing costs will be.