What Are the Requirements To Buy a Home in Florida?

July 23, 2024

When you buy a house, you may spend a long time looking for the perfect deal, but even then, finding your dream house is only the start of the process. All the parties involved in the property purchase must be ready to follow a series of steps, and mutual cooperation can go a long way to ensure a stress-free experience.

Real estate transactions are regulated to protect everyone's best interests, including buyers, sellers, lenders, escrow companies, and other services involved in the process. Today, we'll go over the specific things you need to do if you want to buy a house in Florida.

A Look Into Real Estate Financing

You'll find that many of the requirements potential buyers need to fulfill are linked to their ability to make the right deposits on time.

When we talk about financing in real estate, we refer to the funds that will cover the purchase price and the closing costs. A real estate purchase represents a big investment, so it's important to have a clear plan of action. Some buyers can pay out of pocket, either in cash or through savings accounts. Still, the majority of buyers take a mortgage loan and all the contractual terms attached to it.

Requirements to Buy a House in Florida

• The right credit score: This will be defined by the type of mortgage you choose and its credit requirements. In most cases, the client's credit score must be above 620-640 to be eligible for a property purchase, but you may find different requirements across different counties.
  
  You may be able to get a mortgage deal without a credit history, but you still need to present a year's worth of rent and utility receipts to show a stable financial status.

The most common mortgage plans for future Florida homeowners are:


• Conventional Mortgages: Provided by private lenders like banks, credit unions, or mortgage companies. They usually require a credit score of 620 or higher and remain the most popular mortgage option in Florida.


• FHA Mortgages: Government-backed loans from the Federal Housing Administration (FHA). They offer more leeway on the borrower's credit score, but more restricting terms for a score of 580 or lower.


• USDA Mortgages: A government-backed loan for the purchase of homes in rural areas. Their minimum credit score is 640, but they don't often require downpayment.


• VA Mortgages: Loans reserved for current and past members of the U.S. military. The borrower's credit score must be of 580-620.


• Initial payments: The first costs you'll need to cover after deciding on a house will be the downpayment for the mortgage loan and the earnest money after signing the escrow agreement.
  
  The former is meant to offset the loan amount and the latter is a percentage of the property price that you pay at the beginning as a show of good faith.


• Closing costs: In most cases, the closing costs amount to 2%-5% of the purchase price. Sometimes, buyers and sellers agree to split the amount beforehand, but buyers are usually the ones in charge of covering these costs in Florida real estate transactions.
  
  Closing costs include appraisal fees, title search fees, recording fees, and other escrow services delivered during the transaction. If the house is under insurance, the seller will pay for the coverage until the closing date, and the buyer will pay for the policy from then on. The same rule applies to the payment of property taxes.

Other Requirements

Of course, there are many other steps between the opening of the escrow account and the title transfer. After the contract is signed, the title and other property records need to be reviewed, and you may need to visit the house more than once following the initial appraisal.

There are also specific requirements that are set aside for first-time buyers. On top of having good credit, buyers may be subjected to an income and purchase price limit.

As the buyer, you need to follow the process closely, setting time aside for negotiations and property inspections. If there are issues to address on the property title, you and your real estate agent have to keep tabs on things and ensure that you have a clear title before the closing date.

Early planning can help you find the perfect title and escrow company to help you from start to finish. This goes hand in hand with the need to hire a service to manage the escrow account and a lawyer to help you meet all the requirements in the contract.

Buying a House Doesn't Have To Be a Chore

There are simple ways to save yourself a lot of stress on the road to closing. First, make sure to set a budget before you start perusing rental listings. This not only includes a price bracket for the purchase, but also all the escrow costs, insurance, and taxes.

Doing due diligence is a must, and an escrow company with the best technical resources can be the perfect ally.

At Key Title & Escrow, you'll find the support you need to breeze through your real estate transaction. It might feel like an uphill battle at times, but our specialists are ready to ensure that you don't lose sleep while getting through each step of the process. We provide the latest technology and up-to-date knowledge of the local market to meet any request with a fast response.

If you want to secure Florida's leading title and escrow services, feel free to call (305) 235-4571 or toll-free at (800) 547-0006. You can also send us a message via the contact form on this page to share your questions with our specialists. We're always happy to assist you!