However, if you’ve never bought a house before—or if you’re new to the Florida real estate market—navigating the home buying process can be intimidating.

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broker expert

Jerry

is here to answer all your questions about buying a house in Florida! In this homebuyer’s guide, we’ll run through the steps to buying a house with a special eye to the things that every Florida homeowner needs to know.

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Figure out your finances

The first and most crucial step in buying a house in Florida is evaluating your financial situation. Until you understand your credit score, debt-to-income (DTI) ratio, and all the payments and fees involved in buying a house, you can’t start an effective house hunt—much less put in an offer or close on a property.

So don’t open Zillow just yet—instead, sit down with a calculator, bank statements, and other financial records to calculate what kind of house you can afford in Florida.

Check your credit score

Your credit score might just be the most important number associated with the homebuying process. Check your credit score before you do anything else.

In general, you should have a credit score of 620 or higher to buy a house in Florida, especially if you plan to take out a conventional mortgage to finance the purchase.

If your credit score is below 620, you have a few options.

You can try to build your credit in order to qualify for a better mortgage. If you’re also saving up for a down payment, this might be the best option. However, you can still qualify for a mortgage with a lower credit score.

The Federal Housing Administration (FHA) and Veterans Administration (VA) offer mortgages for homebuyers with credit scores as low as 523 and 500, respectively. Keep in mind, though, that a VA mortgage is only available to veterans and active service members.

Calculate your debt-to-income (DTI) ratio

Another important financial figure is your debt-to-income ratio, or DTI. To calculate your DTI, add up your monthly payments and divide them by your pre-tax income. Payments that count towards your DTI include:

Rent or house payments

Car payments

Credit car payments

Student loan payments

Alimony or child support

If your DTI is above 50%, you’ll have a hard time buying a house in Florida. Aim for a DTI at or below 36%, especially if you want a conventional mortgage.

Determine your down payment

A major part of determining what kind of house you can afford is deciding how big a down payment you can make. Like most home-buying decisions, this depends in part on what kind of mortgage you expect to get. A conventional mortgage typically required a down payment of at least 20%.

If you’re not able to make a 20% down payment, an Federal Housing Administration (FHA) loan or Veterans Administration (VA) home loan may be the more affordable option. Here’s the difference:

FHA loan: A mortgage insured by the Federal Housing Administration for low- and moderate-income homebuyers (especially first-time homeowners)

VA home loan: A mortgage insured by the Veterans Administration for servicemembers, veterans, and eligible surviving spouses

With an FHA mortgage, you can make a down payment as low as 3.5% if your credit score is good enough (usually around 580). If you qualify for a VA loan, you may be able to make no down payment at all! VA loans also offer competitively low interest rates and lower closing costs.

Prepare for closing costs and other fees

You’ve probably heard the phrase “closing costs” before, but how much should you really be prepared to pay upfront along with your down payment?

Closing costs typically amount to 3-6% of the home’s total value. According to

Zillow’s Home Value Index,

the average home value in Florida is $334,882—meaning that closing costs could come out to as much as $10,046!

What does that total include? In general, your closing costs will cover the following:

Home appraisal (required by most lenders) fee

Credit report fee

Home inspection fee

Mortgage origination fee

Earnest money (i.e., a good-faith deposit that will go towards your down payment)

Mortgage insurance

Property taxes

Homeowners insurance

In Florida, property taxes average about 0.98%, but the exact amount varies by county. For instance, Palm Beach and Orange County’s property tax rates are 1.03% and 1.04% respectively, but rates in the Panhandle dip as low as 55% and 57% in Walton and Washington Counties.

There’s good news, though, even if you’re looking at houses in one of the more expensive counties: Florida’s Homestead Exemption law allows homebuyers to claim a $50,000 exemption on property taxes.

MORE: How to make a counteroffer after a home inspection

Key Takeaway: Check the property tax rate in the county where you’re hoping to buy a house before you begin.

Look for homeowners insurance

Homeowners insurance won’t just factor into your closing costs—it’s a major expense you’ll need to maintain long after you close. The average cost of homeowners insurance in the US is $1,387 per year or $115 per month. In Florida, the cost can be higher, since you may need to buy flood insurance in addition to your regular homeowners policy.

Don’t just buy the first homeowners insurance policy you see. Compare rates from at least three different insurance companies to find the lowest rate (hint: you can usually find the lowest rate from your car insurance company).

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MORE:

Does home insurance cover flooded basements?

Key Takeaway: Evaluating your finances is a non-negotiable first step to buying a house in Florida. Calculate your credit score, DTI, and savings for a down payment and closing costs before you move any farther.

Get preapproved for a mortgage

Don’t start looking for houses yet—your next step is to prequalify for a mortgage. Not only does this put you on a strong financial footing going into negotiations, many sellers won’t even show their property until you provide a preapproval letter.

Here’s how to get preapproved for a mortgage:

Provide the lender with your Social Security number

Create a list of all banking information, employment history, assets, and debts

Fill out a mortgage application

The preapproval process is fairly straightforward, but don’t start until you’re sure you’re ready to buy! Your lender will use the information you provide to verify your DTI and ability to pay for the loan, and they’ll perform a hard credit check. If you apply for preapproval before you’re financially ready, that credit check could damage your score and make it harder to get approved in the future.

How to pick the right mortgage in Florida

When it comes to picking a mortgage, your main considerations should be mortgage term and interest rate. The two most common mortgage terms are 30 years and 15 years.

The longer mortgage term comes with lower monthly payments, but you’ll have a higher interest rate (around 3.5% on average). On the other hand, a 15-year mortgage can have an interest rate as low as 2.5% or lower, but you’ll make higher monthly payments in exchange for that low rate. Compare your loan options from a few lenders before making the decision.

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Look for a house

We’ve finally reached the exciting part! Once you’ve studied your financial situation and prequalified for a mortgage, you’re ready to begin the house hunt.

Pick your city or neighborhood

Look for a city that meets your needs and interests in terms of cost of living, culture, and climate. Cape Coral, Tampa, Jacksonville, and Miami are all hot real estate markets at the moment.

If you already have your heart set on one city in particular, study the housing market in different neighborhoods and consider what’s important to you: do you want a house near good schools, or a property with easy access to bars and nightlife? Look at local crime rates and take the cost of

car insurance

into consideration.

Many Florida homes are located in deed-restricted communities, where you may need to follow regulations and pay extra fees set by a homeowners’ association (HOA). If you’d rather avoid those costs and restrictions, make sure that you’re looking for houses that aren’t in deed-restricted communities.

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Buyer’s market vs. seller’s market

Knowing whether you’re looking at a buyer’s market or a seller’s market can help you shop smart when it comes to real estate.

In a buyer’s market, supply outweighs demand, and you may be able to negotiate a lower price

You’re in a seller’s market if there are more prospective buyers than houses on the market

Here’s a quick way to determine whether your chosen area is a buyer’s market or a seller’s market: check recent home sales and compare the asking price to the final price. If the asking price is consistently lower than what buyers ended up paying, it’s a seller’s market.

Time on the market is another good indicator: in a seller’s market, houses go quickly, but they can linger for weeks or months in a buyer’s market.

As of the final quarter of 2021, most cities in Florida are seller’s markets. This means that once you find a house you’re interested in, it’s best to put in an offer promptly to avoid missing out on the sale. However, markets can shift quickly! Do your research when you begin your house search.

Find a real estate agent

Buying a house can feel like a full-time job—and that’s because it is for real estate professionals! Hiring a real estate agent isn’t a requirement to buy a house in Florida, but it can be extremely helpful, especially if you’re living out of state.

Look for an agent with extensive experience in the community you’re looking at. Clear and prompt communication is also crucial when it comes to picking a real estate agent—don’t work with someone who doesn’t return your calls!

Make an offer

Once you’ve found the house of your dreams, it’s time to make an offer! A real estate agent can help you fill out all the paperwork and calculate the best offer based on the market. If you’ve done all your homework, you should be ready to make all the necessary payments and move forward with your new life as a homeowner!

MORE:

How to choose the right kind of home insurance for you

How to save on homeowners insurance

We get it—insurance isn’t the first thing on anyone’s mind when buying a house, and it’s definitely not the most exciting part of the process. But you’ll need to buy

homeowners insurance

to protect your new property.

Luckily, the insurance shopping process is quick and easy when you’ve got

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FAQs

How much money do I need to buy a house in Florida?

The exact amount will vary depending on where you’re buying, how big a down payment you can make, and what kind of mortgage you qualify for. With average Florida home values around $344,882, it’s wise to start with at least $27,000 in savings.

What credit score is needed to buy a house in Florida?

Ideally, you should have a credit score of at least 620 to buy a house in Florida. However, you may still qualify for an FHA loan or a VA mortgage if your credit score is at least 500.

What is the best place to buy a house in Florida?

If you’re looking for affordable property in Florida, your best bet is to look at cities in the Panhandle, where housing costs are low. For lucrative rental property, on the other hand, take a look at the southern part of the state, where vacation rentals are popular.

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