How to Minimize Your 1st Time Home Buying Costs
If you are looking to buy your first home in Florida, you are picking a good time to buy and 2017 looks like another great year for low rates and flexible mortgage requirements. Prices are rising, mortgages are still low, and much of the damage done during the last recession to the housing market has evaporated. Even better, there are many options to get help for buying a home in Florida, as well as other parts of the country. You may be able to get down payment assistance, as well as enjoy very low interest rates and down payments, even if you have a low credit score.
Here are some of your options:
#1 Florida First Time Home Buyer Grant Program
Florida has some generous grant programs for some first time home buyers. You can get a grant of $5000 to $15,000, or, a zero percent 2nd mortgage to buy your first home. This is down payment assistance that can really help!
The state government has various programs; some of them do not have any particular qualifications to qualify as a first time home buyer. However, others will require that you did not own a principle residence, where you resided, for the past three years.
One of the programs on the above web page allows you to purchase a home in Florida with as little as $2500 down:
#2 House of Urban Development
The HUD website has a page dedicated to Florida first time home buyer resources. HUD does not run these programs; it is simply a resource page with many helpful links to many different home buyer assistance programs. It also has links to the individual counties in Florida with resources in each one for Florida homebuyers.
#3 Broward County FL First Time Home Buyer Program
Broward County is one of the most populous counties in the state, and it has a special loan partnership between the Housing Finance Authority of Broward County and various mortgage lenders in the area. First time home buyers can buy a home in Broward County at very low mortgage rates. Some of the features of this program include:
#4 Orange County Homebuyer Program
Orange County FL also offers a great Down Payment Assistance Program that will help certain homebuyers get down payment assistance for their first home. You also can get help with closing costs.
How much you can get in help will depend upon your income. The program has three different down payment options for people with very low, low or moderate income. Generally, you can get help from $10000 to $30000.
All applicants for the program have to complete a homebuyer's education program and must be able to get a first mortgage. All homes have to be located outside the city limits of Orlando FL.
#5 Osecola County Homebuyer Program
Like other Florida counties, Osecola County FL offers a first time home buyer assistance program. Their website does not list any criteria or the type of help that they offer. You do need to take a first time homebuyer class, which includes how to manage money, understanding credit, how to find a home, choosing a realtor, how to choose the right mortgage, and more.
#6 Florida Housing Mortgage Credit Certificate Program
This is a very helpful program that will help you to save money for every year you live in your new home. You may claim as much as 50% of your mortgage interest each year as a tax credit on your federal tax return. There is a cap of $2000 each year. But any amount beyond that may still be declared as a home mortgage interest deduction for federal tax purposes.
#7 Miami-Dade County First Time Home Buyer Program
If you want to buy a home in the Miami area, you are in luck. You can get help as a first time home buyer if you meet certain income criteria. The main program that they offer is working with mortgage lenders in the area to get you a very low interest mortgage loan for your second or third mortgage. This can help to greatly reduce your out of pocket costs for buying a home.
The Bottom Line
You have tons of great options in Florida to help you reduce your costs when you buy a home. Whether you need help with a down payment or getting a low interest rate, Florida can help you.
In the Florida market in 2017, we often have seen the housing market being slowed by too few homes being chased by too many investors and home buyers. Whether you are looking to buy a vacation home in Florida or considering purchasing an investment property in the State of Florida, there are many key factors to address before making a commitment. This causes the properties to go up in value, which is great for the owner but not so good for the buyer.
A property shortage in Florida can be bad for both home buyers and investment property buyers. If you want to succeed in buying Florida investment properties in 2017, we recommend that you keep the following secrets in mind that we highlight.
Generally, remember that if you lack experience, your chances of success in Florida real estate investing will be higher if you work with an experienced investor. He or she can help you to avoid some of the most common mistakes that bedevil so many new investors.
You can't get mortgage insurance for investment properties, so you will usually need a 20% down payment to get traditional mortgage financing. If you are able to put down more money, you will get a better rate.
Keep in mind that rates and costs are usually higher for investment properties because there is more risk for the bank.
The Florida rental market is strong, both for regular renters and vacation renters. So one option for financing properties you should think about is an FHA program. FHA mortgages are backed by the full faith and credit of the US government. So, more lenders are willing to lend on investment properties with FHA-backed loans. Research today's FHA rates from competitive approved lenders online.
The rates on these loans are very competitive, if not as low as owner occupied properties. Also, you may be able to qualify for a down payment on your investment property as low as 3.5%.
If you are buying Florida investment properties, you could have to deal with major rain storms and even hurricanes every few years. Between those types of repairs and the regular rental repairs of leaky toilets and faucets, you will save money if you can fix things yourself.
Also have extra money in the bank for handle unexpected repairs, such as the roof if a major Florida storm blows through.
This is true for all rental properties, but you will see income variance in Florida if you are renting to vacationers. Some seasons you will have full occupancy, and others you may go two months with the property sitting empty. Even if the property is not making money, you will still have mortgage payments as well as insurance and property taxes to worry about.
Your property tax bill on Florida investment properties can be substantial, so make sure that you have enough money put away to pay the taxes every quarter.
Many people get involved in Florida real estate by buying fixer uppers for a low cost and bank on fixing it up. The problem here can be that many investors are not skilled at fixing properties. You can end up with a house that you spent far too much to fix. You should work with a good Florida real estate agent who invests in properties. He or she can help you to find an under market value Florida deal that needs less repair, hopefully.
If you are a new Florida investor, you should probably start with a small project and get your feet wet – before you buy a big property with a lot of apartments. Many beginning Florida investors like to buy a duplex, live in one side of it, and rent out the other side. After you gain experience, you may be able to start buying more, larger properties.
If you are considering getting into Florida investment property, make sure that you understand that it is often more of a full time project. If you think you can own several Florida investment properties and keep your day job, you may find this not to be the case, if you are going to handle the houses or apartments yourself.
If you are experienced and buy the property under market value and get it repaired affordably, you may be able to afford property management. A good property manager will be able to collect rent for you and keep the property in good repair.
We also advise that you work closely with an experienced real estate agent and investor to find good Florida investment properties. Last, partner up with a good mortgage broker who has good loan products available for landlords.
If you do all of these things, you should be able to succeed in Florida real estate investing.
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