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Housing Market in Florida

We'll discuss crucial elements such as interest rates, essential costs, loan types, and more, providing insights for potential homebuyers.

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A homebuyers learning about housing market in Florida

The Florida housing market in 2024 is experiencing steady growth.

Home prices are rising, although more slowly than in previous years. Cities like Miami and Tampa have higher median prices due to strong demand, while places like Cape Coral and Ocala are more affordable.

A homebuyer consulting with mortgage lender about home loan options in Florida

Loan Programs

An illustration depicting the concept of down payment assistance for first-time home buyers

Down Payment Assistance

Economic factors such as rising mortgage rates and inflation impact the market, but Florida's strong job market and population growth keep demand high. More homes are being put up for sale, and new construction is on the rise despite challenges like high building costs.

Florida continues to attract new residents, especially retirees and those looking for lower taxes, which supports ongoing housing demand. Overall, the market is expected to remain strong with gradual price increases and more balanced supply and demand.

Today's Mortgage Rates in Florida

As of 2024, mortgage rates in Florida are as follows:

30-Year Fixed-Rate Mortgage

The average rate is around 7.02% to 7.34%. This type of mortgage offers stability with consistent monthly payments over the long term, making it a popular choice for homebuyers who plan to stay in their homes for many years.

15-Year Fixed-Rate Mortgage

Rates for these mortgages range from approximately 6.28% to 6.75%. While the monthly payments are higher than those of a 30-year fixed-rate mortgage, the total interest paid over the life of the loan is significantly lower.

5/1 Adjustable-Rate Mortgage (ARM)

The average rate for a 5/1 ARM is about 7.50%. This mortgage starts with a lower fixed rate for the first five years, which adjusts annually based on market conditions. It can be a good option for those who plan to move or refinance before the adjustment period begins.

Costs to Expect When Buying a Home in Florida

When buying a home in Florida, here are the essential costs you should expect:

Florida-Specific Costs

  • Recording Fees: Around $318.
  • Title Service Fees: Approximately $842.
  • Doc Stamps on the Deed: $0.70 per $100 of the home's purchase price (except in Miami-Dade, where it’s $0.60 per $100).
  • Transfer Taxes: Typically 0.7% of the purchase price.
  • Flood Insurance: Necessary for homes in flood-prone areas, with costs varying significantly based on risk.

General Costs

  • Earnest Money Deposit: Typically 1-3% of the purchase price.
  • Down Payment: Usually 3.5-20% of the home price.
  • Home Inspection: Around $300 to $500.
  • Appraisal Fee: About $300 to $500.
  • Loan Origination Fees: Between 0.5% and 1.5% of the loan amount.
  • Homeowners Insurance: Approximately $1,200 to $2,000 per year.
  • Title Insurance: Roughly $5 per $1,000 of the home's value.
  • Property Taxes: Typically 0.8% to 1.2% of the home's value annually.

Compare Loan Types

When buying a home in Florida, it's important to understand the different types of mortgage loans available and how they compare:

FHA Loans

FHA loans are backed by the Federal Housing Administration and designed for low-to-moderate-income buyers. They require down payments as low as 3.5% and have easier credit requirements, with a minimum score of 580. However, they require mortgage insurance premiums (MIP) for the life of the loan.

VA Loans

VA loans are available to veterans and active-duty service members. They often require no down payment, have lower interest rates, and no mortgage insurance. They have more lenient credit requirements but require meeting service eligibility and paying a funding fee unless exempt.

Conventional Loans

Conventional loans, offered by private lenders, usually require down payments between 5-20% and generally need a minimum credit score of 620-640.

They have no private mortgage insurance (PMI) if the down payment is 20% or more. These loans typically have stricter credit and income requirements compared to FHA and VA loans.

USDA Loans

USDA loans, backed by the U.S. Department of Agriculture, are intended for rural and suburban homebuyers. They typically require no down payment and a minimum credit score of 640.

These loans have competitive interest rates with lower mortgage insurance premiums than FHA loans, but the property must be in an eligible rural area and there are income limits.

Florida Hometown Heroes Program

The Florida Hometown Heroes Program is for all full-time workers employed by Florida-based companies. It offers down payment and closing cost assistance, providing up to $35,000 or 5% of the first mortgage amount, whichever is lower.

The interest rates for this program are below market rates, and while the loan is not forgivable, repayment can be deferred under certain conditions.

Florida Tax Benefits for Homeowners

Florida offers several tax benefits to homeowners, helping to reduce the overall cost of homeownership.

Homestead Exemption

The Florida Homestead Exemption can reduce the taxable value of your primary residence by up to $50,000. This exemption applies to the first $25,000 of the property's value for all property taxes, including school district taxes, and an additional $25,000 for non-school taxes. Homeowners must apply for this exemption by March 1st of the year following the purchase of their home.

Save Our Homes (SOH) Assessment Limitation

Once you receive the Homestead Exemption, your property qualifies for the SOH assessment limitation. This benefit caps the annual increase in the assessed value of a homestead property at 3% or the change in the Consumer Price Index (CPI), whichever is lower, significantly reducing property tax liability over time.

Portability Transfer

Homeowners moving within Florida can transfer their SOH assessment cap from their old homestead to a new one, allowing them to maintain the tax benefits accrued over the years.The portability benefit can be transferred to a new homestead within three years of selling the previous one.

Senior Citizen Exemption

Seniors aged 65 and older may qualify for an additional exemption of up to $50,000 if they meet certain income requirements. This exemption applies to county or municipal taxes and varies by jurisdiction.

Veteran's Disability Exemption

Veterans with a VA-certified service-connected disability of 10% or greater are entitled to a $5,000 property tax exemption. Veterans who are 100% permanently and totally disabled due to service-related reasons may qualify for a full exemption from property taxes.

Exemption for Surviving Spouses of First Responders

The surviving spouse of a first responder who died in the line of duty may receive a total exemption on homestead property, which can greatly reduce their tax burden.

Widow/Widower Exemption

This exemption provides a $5,000 property tax reduction for widows and widowers who are permanent Florida residents.

Florida Mortgage Resources

If you're looking to buy a home in Florida, numerous resources are available to help with down payments and other costs. We've compiled some of the best grants and programs for first-time buyers in Florida to make your homeownership journey smoother.

The Florida Hometown Heroes Program is designed for a wide range of workers in Florida, including frontline community workers such as law enforcement officers, educators, firefighters, and healthcare professionals, as well as other essential workers.

It offers lower-than-market interest rates and provides down payment and closing cost assistance up to $35,000 or 5% of the first mortgage amount, whichever is lower.

One of the top down payment assistance programs is Florida Assist, which provides up to $7,500 in down payment assistance. This assistance is provided in the form of a deferred second mortgage with a 0% interest rate. Repayment is only required when you sell the home, refinance, or pay off the first mortgage.

Another valuable program is the HFA Preferred Grant, which offers 3%, 4%, or 5% of the home’s purchase price to help with down payments and closing costs. The grant does not need to be repaid, making it an excellent option for those needing financial assistance.

The Florida Homeownership Loan Program (FL HLP) provides up to $10,000 in down payment and closing cost assistance. This is a 15-year, 3% fixed-rate second mortgage, and it must be repaid in full if you sell, refinance, or transfer ownership of the home.

For more detailed information and to apply for these programs, contact us at MakeFloridaYourHome. We are here to help guide you through the process and ensure you take full advantage of all available resources.

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