Buying A House In Florida And Getting A Mortgage

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The recent economic troubles in the US have cause a correction in house prices and nowhere is this more evident than in Florida. We've seen a lot of inquiries from clients looking to pick up bargain holiday homes in the state and wondering about how they get a mortgage for it. As a result, we've put together a little step-by-step guide to what to expect and what it costs.

The first thing to note is the amounts you can borrow. As a general rule in the north of the state (north of a line from Tampa to Cape Canaveral) it's 75% and in the south it's 70%. Here's how the process works:

Step 1: You submit your application and it is assessed by our broker to see if it is likely to be accepted. If he thinks it is, he will say so and should you then choose to proceed an Application fee of $595 is payable.

Step 2: An application is made to the bank on your behalf (part of the service is our broker taking care of all your Power of Attorneys, opening bank account etc) and they produce a Good Faith Estimate - a legal document which must estimate costs to within 10% - and a Truth in Lending document both outlining the fees you can expect to pay if you proceed.

Step 3: If you're happy you sign and return these and pay a $350 Appraisal fee for the property to be appraised. If you don't have a property yet $105 is still payable but will be credited towards an Appraisal of a property when you find one.

Step 4: At your own expense you can then arrange to get a House Inspection Report done. In Florida a Pest Inspection report is also recommended which costs about $50.

Step 5: Assuming all these check out and you wish to proceed with the purchase and the mortgage the big costs now become liable. Upon closing you will be required to pay the fees outlined in the Good Faith Estimate which are generally the following:

• Credit Report: $15
• Recording fee: $133
• Tax Service fee: $60
• State Tax/Stamps: 0.7% of purchase price + 0.55% of loan amount
• Loan processing fee: $275
• Flood Certification fee: $20
• Courier fee: $100
• Hazard Insurance premium: depends on property but should be a few hundred dollars
• Flood insurance premium: depends on property location but should be a few hundred dollars
• Closing fee: $200
• Abstract of title search fee: $75
• Title insurance: depends on property but should be a few hundred dollars
• Doc prep fee: $60
• Survey fee: $300
• Pest Inspection fee: $50
• Closing Disbursement fee: $500

At this point too you will also need to pay County taxes for the remainder of the calendar year. If you buy in January you will pay a fill 12 months but buy in November and it's just two. Either way, County taxes are payable for a year in advance in the US so expect a bill in January and your Realtor should be able to tell you what they are for where you are buying.

As well as the above, your broker fee becomes liable too. This is normally 1% of the purchase price subject to a minimum of $4,000 (though this minimum can be negotiable for smaller mortgages).

The last thing to notes is that when you complete you will be required to show - but not pay - that you have enough cash reserves to meet the next 6 months' worth of mortgage payments, state taxes and home insurance. This is the law in the US.

Yes, there are some hoops to jump through but no one said this would be easy! What we can assure you is that by applying through Choice Loans you will work with a broker who is regulated by the US authorities and has ver 10 years' experience in getting mortgages for UK citizens in the US.

For further information please either complete the enquiry form on our Overseas Mortgages page here or call us on 0845 1260350