Florida is a great place to look for affordable housing, but this doesn’t mean that your homeownership process will be easier. Unlike in the rest of the country, if you are a first-time homebuyer in Florida, navigating the process, especially the documents preparation and finances can be overwhelming. Moreover, it’s worth noting that because of tight supply and high demand it’s challenging to buy a first home at a deep discount. Although there are plenty of affordable offers on houses on real estate websites, keep in mind that the state also provides you with home-buying assistance and loan offers through its financial aid programs.
If you are ready to buy a home in Florida, then this guide will come in handy as it includes a broad overview of steps you can take to make your home buying journey a little easier. Here, you’ll find what to expect and how to proceed before committing to a first-time home purchase as you can find your best home at https://ofirio.com/ in seconds.
Step 1 – Create a Down Payment
You’ll need a down payment of 20% of the total purchase price to qualify for a mortgage. Florida first-time homebuyers have access to down payment assistance programs that can help them pay for part of their down payment. The Federal Housing Administration’s (FHA) 203(k) is the most well-known program. However, it’s worth noting that there are plenty of other options, such as the VA’s, USDA’s VistA, or USDA’s VA Loan program. Besides, first-time homebuyers can also get down payment assistance through local home-buying resources, such as banks or real estate agents.
In some cases, you can even put down less than 20% of the total purchase price and still get a home loan with low monthly payments. Moreover, first-time homebuyers are also eligible to use the state’s 10-year special loan program to save money on their down payment. These loans can be used to purchase homes that require either 5% or 10% down.
Step 2 – Check Credit Score
Since most people are required to have a 20% down payment, lenders will want to know your credit score to decide if you’re qualified for a loan. Lenders don’t want to take a chance on a borrower who might default on a loan. Florida home-buying assistance doesn’t require you to be totally debt-free, so that many first-time homebuyers can use payday or title loans to help with the down payment. However, lenders usually won’t approve a loan with any kind of consumer debt, even if it’s to pay for a down payment. A low credit score can also cost you a lot of money if you end up defaulting on a loan. According to Experian, a 1% drop in a borrower’s credit score is associated with a nearly 7% increase in foreclosure filings.
Step 3 – Get Pre-Approval
Many lenders offer homebuyer’s programs to simplify a house search. Of course, some lenders may require a pre-approval letter before giving you the chance to make an offer. However, if you have already found a home you like, ask the home seller if they will let you place an offer without a pre-approval letter from a lender. This will provide you with the required down payment assistance and allow you to submit your loan application immediately.
Step 4 – Find a Property
Finding a home you’ll love is a lot easier when you have someone who can narrow your search to your target neighborhoods. You may not be able to afford a property with every essential amenity you can’t imagine your life without, but you’ll be able to spend more money to renovate your new home and have a lower cost of living.
So, interview several real estate agents to find the right one who specializes in your preferable neighbourhood and who will become your main ally on your go to a dream home. Don’t try to take the home search process alone as having a guide sharing information and proper resources will help you avoid expensive mistakes.
Step 5 – Check Financing
A lender will need to review your personal finances to make sure you’re eligible to make a payment for a property. You’ll need to show them a pay stub and a recent W2 form that shows you’re earning enough money to qualify for a mortgage. It’s also helpful if you have a checking account statement and an active savings account.
Most lenders will also check your credit score and credit report, so make sure to pay your bills on time and show them your credit card statement and history. What’s more, lenders will also consider any judgments or liens on your credit report.
Step 6 – Get a Home Inspection
You might think that you’ll be able to get a home with a shoddy inspection if you’re paying a lower price. However, you may face lots of hidden problems that can lead to unexpected costs. So, it’s important to be familiar with a home’s construction to fully understand any issues you may have and how to fix them at a reasonable price. It would be helpful to ask your real estate agent if there are any contractors they recommend for your home inspection. Besides, you can ask the seller to pay for the service to ensure you get a full home inspection as many sellers are willing to help if it makes it easier for you to buy the home.
Final Say
First-time homebuyers are on a new adventure that will become a priceless experience if they follow these few simple tips. We hope that this guide has given you some insight into the process of first-time home-buying in Florida and will help you on your path to the right decision.