Florida may differ from your current home state in regard to the minimum amount of funds needed for a down payment, property types, and the costs involved.
Here is Part 2 of a series that may be helpful in buying a home in Florida:
There are a few costs when buying in Florida that may differ from your current home state:
Homeowners and Flood Insurance
You may notice that homeowners and flood insurance premiums are higher in Florida. We may be the Sunshine state, but we are also known as the Lightning Capitol. Florida has also had a hurricane or two blow through on occasion. Therefore, having good homeowners insurance, and flood policy, when needed, is important.
There are many factors that will impact your insurance premiums; the age of the home, the roof, the structure, the elevation in relation to sea level, to name a few. Before you buy that dream home, you may want to get a few insurance quotes. A 4-point inspection and wind mitigation report will help your insurance agent quote the proper coverage needed. (You may be able to get a copy from the seller.)
Keep in mind, Florida is a peninsula. Being surrounded by water on both sides of the State makes for beautiful sunrises and sunsets. However, it also means more flood zones. Therefore, you will want to find out if your home is in a flood zone. Here is a link to the Federal Emergency Management Agency (FEMA) Flood Map Service Center.
If you find you are in a flood zone, you will want to get an Elevation Certification. An Elevation Certification tells you how the elevation of your new home compares to the base flood elevation set by FEMA (Federal Emergency Management Agency). This helps determine the risk of flooding and impacts the cost of your flood insurance. If the seller does not have a copy of the Elevation Certificate you will want to request one from a land surveyor.
Insurance premiums are paid in advance of the coverage. Lenders will require you pay the first year’s premium(s) at the closing on the home.
Doc Stamps and Intangible Tax
In most cases, if you are buying real estate, Florida will be collecting a few taxes. Here is what to expect:
- FL Doc Stamps to transfer the Deed from the seller to the buyer. Also known as Deed Stamps and Transfer Taxes, this is a tax of 0.70% of the purchase price and is often paid by the seller.
- Florida Doc Stamps for the mortgage note. This is a one-time tax paid at closing and is based on the buyer’s loan amount. The tax is 0.35% of the mortgage loan amount.
- Florida Intangible Tax. This is a one-time tax paid at closing and is based on the buyer’s loan amount. The tax is 0.2% of the mortgage loan amount.
Don’t Forget Part 1
Browse Part 1 to learn more about low down payments and PUDs.