Purchasing a home is a big step, especially for first time homebuyers. Being prepared is extremely important as there are many different aspects to purchasing a home. If you are a Florida first time homebuyer, it is good to know there are a number of advantages to owning property compared to renting. Since interest rates are so low in 2014, and property values are back to affordable levels, owning a home often makes better sense. Owning a home allows you to have a place to call your own and start building your financial net worth. However, before you look at homes you need to figure out if you have enough financial stability to support the investment with these first time homebuyer tips.
Evaluate your finances:
Look at your finances to determine if you qualify for any first time home buyer program with the following steps.
- Calculate any financial obligations you already have, such as credit cards, car payments and groceries. Subtracting this total from your monthly income will reveal how much you can probably afford to put toward mortgage payments.
- Calculate your debt-to-income (DTI) ratio. To calculate your DTI ratio, add up your minimum monthly payments for items such as credit cards, car loan or lease, student loans and alimony or child support payments if applicable. Then, divide that total by your gross (before taxes) monthly income. Generally your revolving monthly expenses plus housing should be below 40% of your gross income.
- Decide what mortgage program you need. Do you have a down payment? If not, you have two options for financing in Florida. First, the 100% VA Home Loan – available to past and present military. Second, the 100% USDA Home Loan, available in select locations around FL. Keep in mind there are closing costs, which are typically several thousand dollars but can range depending on many factors. However, all government loan programs like FHA, VA, USDA allow the seller to pay the buyers closing costs.
Keep in mind, that the price of a property should not be more than 2.5 x your annual gross income. In addition, no more than 28% of your monthly income should go toward mortgage payments.
Many buyers initially evaluate the 30-year fixed-rate mortgage, but there are many other first-time homebuyer programs that offer a variety of benefits. For example, the Federal Housing Administration (FHA Home Loan) provides helpful first-time homebuyer assistance. The VA purchase mortgage also has many great advantages for military buyers with VA benefits.
Are you in the Florida armed forces or reserves, a veteran or military spouse? Please visit our home page for more information or call ph: 800-743-7556.
Serving all First Time Home Buyers in Walton County – DeFuniak Springs, Freeport, Miramar Beach, Paxton, Point Washington, Redbay, Santa Rosa Beach, Baker, Cinco Bayou, Crestview, Okaloosa County, Destin, Fort Walton Beach, Laurel Hill, Mary Esther, Niceville, Shalimar, Valparaiso
First Time Home Buyers 100% Financing Options