Now that the housing market is finally calming down after the pandemic, buyers are facing a new challenge: Soaring mortgage rates.
In Florida, the average 30-year fixed mortgage rate is 5.49% — up from 2021's historic lows. This raises the average monthly mortgage payment to $1,847 (assuming a 20% down payment at the median home value).
But buying a home in Florida is still possible, even for first-time home buyers. Many markets are seeing frequent price drops and fewer offers, giving motivated buyers the upper hand in negotiating for the best price.
In this guide, you’ll learn how to buy a house in Florida with confidence no matter what the market brings. Learn why you can trust our advice.
Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great local realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.
Best of all, hiring a real estate agent comes at no extra cost to you — since the seller typically pays both their listing agent and your buyer's agent.
Ready to find a great local realtor, but not sure where to start? The best (and easiest!) option is to try a free agent matching service like Clever Real Estate. Answer a few simple questions about your home buying goals, and Clever will match you with hand-picked agents from Keller Williams, RE/MAX, and other top brokerages in your area. Find a top local agent and make your home buying dreams a reality today!
Step 1: Save for a down payment
Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.
Typically, mortgage lenders in Florida want you to contribute 20% of the purchase price as a down payment. That would be $81,398 for a $406,988 home — the typical home value in Florida.
However, you have options to lower your down payment amount.
Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).
Minimum down payment (%)
Down payment ($)
Based on typical home values from Zillow (August 2022)
But making a down payment of less than 20% comes with some risks.
First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.
Based on home values from Zillow (August 2022) and a 5.49% interest rate for a 30-year loan.
Second, you may have to purchase mortgage insurance.
Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.
Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.
VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.
Florida down payment assistance programs
The Sunshine State offers several down payment assistance programs to prospective homebuyers. Eligible participants can receive financial help from government grants or second mortgages with deferred or forgiven payments.
The Florida Housing Finance Corporation is a great place to start your research. There are a number of programs to choose from, including:
The Florida Assist Program
This option offers borrowers up to $10,000 for FHA, VA, or USDA loans, or up to $7,500 for conventional loans. This financial assistance comes as an interest-free second mortgage to eligible participants.
FL Homeownership Loan Program
The Florida Homeownership Loan Program offers a second mortgage up to $10,000 through a second mortgage. The mortgage has a 15-year term, and monthly payments are required.
HFA Preferred/HFA Advantage PLUS
The HFA Preferred and HFA Advantage PLUS programs can offer between 3-5% of the purchase price as a forgivable second mortgage.
U.S. Department of Housing and Urban Development
Additional programs and resources for Florida homebuyers can be found on HUD’s web page here.
Step 2: Find a great real estate agent in Florida
Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Florida.
Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:
- Years of experience
- Number of transactions in the last year (the more the better!)
- Experience in your price range
- Overall review score
- Individual reviews and complaints
Step 3: Get preapproved for a mortgage
A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.
Most sellers in Florida will require preapproval before showing you their home.
You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Florida home.
Step 4: Choose the right location
Currently, the typical home value in Florida is $406,988, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!
Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.
To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Orlando:
Home value appreciation in Orlando
Step 5: Start house hunting in Florida
Searching for homes in Florida is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.
Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."
Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.
Look at current housing inventory
The timing of your house hunt in Florida can have a big impact on your number of options. For example, in Florida, March has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.
On the other hand, December gives you the fewest choices in Florida. Historically, there are 23.9% fewer homes for sale than during Florida's peak season.
Housing inventory in Florida by season
New listings per month
Based on data from Realtor.com (October 2022)
Step 6: Make an offer
Once you find a Florida house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.
Currently, in Florida, homes stay on the market for 75 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.
Historically, Florida homes sell fastest in March, where the average property is only on the market for 68 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.
On the other hand, if you buy in December, you have a bit more time to search. Homes typically stay on the market 7 days longer than Florida's annual average.
Average time homes spend on market in Florida
Based on data from Realtor.com (October 2022)
» LEARN MORE: What should an offer include?
Step 7: Inspections and appraisals
Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.
Home inspections in Florida
Having your Florida home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.
Your inspector should check out the following parts of the property:
- Electrical system
- HVAC system
If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.
Florida requires sellers to disclose some known property issues, but some troubles might not be identified with a general home inspection alone. Conducting additional testing before closing can help protect your health and your wallet in the long run.
Here are a few good inspections to consider before buying a property:
- Radon testing: Florida sellers are required by law to disclose known radon hazards, but they're not required to conduct a radon test. It's a good idea to get a test done as soon as possible to avoid any health or safety risks. Homebuyers can get free radon test kits from the Florida Department of Health. Order your free test by filling out a form here.
- Termite and pest inspection: Most VA and FHA loans often require termite and pest inspections before a buyer is allowed to close on a property. However, even if your loan officer doesn't require a pest inspection, it's wise to get this test done to ensure the home's safety.
Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.
Step 8: Close on your new home!
Closing on your Florida home requires two major tasks. First, you'll review and sign the necessary paperwork to get the title transferred to your name. Next, you'll pay your closing costs to become an official homeowner.
On the closing date, prepare to sign a lot of documents. You may want to read through all the paperwork ahead of time to make sure you fully understand everything.
Some important forms and documents to review will include:
- The deed
- The mortgage note
- The disclosure
- The security instrument
After completing the paperwork, you'll pay your closing costs to the title company. The title company will take care of distributing the funds to each service provider.
Generally, closing costs for homebuyers can be sorted into four main categories:
- Lender fees: Fees paid to your lender for originating and underwriting your loan. These fees will make up the bulk of your closing costs.
- Title and escrow charges: Charges paid to the title company for transferring the property to your name. These costs include the title company's settlement fees, the title insurance, and the charges for the title search.
- Prepaid costs: Ongoing homeownership expenses. Most mortgage lenders require borrowers to pay for their property taxes and homeowners insurance up front.
- Other closing costs: Miscellaneous costs that vary according to each buyer. Closing costs can cover things like pest inspection fees, certification expenses, and other services needed to buy a home.
Buyers in Florida typically pay 3–5% of the purchase price in closing costs. For a $407,000 home — the typical home value in Florida — that's between $12,210 and $20,350!
Frequently asked questions
Florida does not require you to hire a real estate attorney to buy a home. However, depending on your circumstances, you might consider hiring one anyways. If you do, treat the process similarly to hiring an agent. Interview multiple attorneys and proceed with the one that best meets your needs.
- Save for down payment
- Get pre-approved for a mortgage
- Choose your preferred Florida neighborhoods
- Partner with the right real estate agent in Florida
- Go house hunting
- Make a strong offer
- Inspections and appraisals
- Do a final walkthrough and close
Yes! Florida's first-time homebuyer program offers a 30-year, fixed rate mortgage for eligible buyers working with a participating lender. Buyers may also apply for down payment and closing cost assistance.
Eligible homebuyers must not earn more than their county's maximum income limit or buy a home above their county's purchase price limit. Borrowers are also required to take a homebuyer education course and have a credit score of at least 640.
Federal Reserve. "Housing Market Tightness During COVID-19: Increased Demand or Reduced Supply?." Accessed October 11, 2022. Updated July 08, 2021.
Consumer Protection Financial Bureau. "The Fed is raising interest rates. What does that mean for borrowers and savers?." Accessed October 11, 2022. Updated March 17, 2022.