First Time Buyers

If you are a first time home buyer and considering buying a home in the Jacksonville Florida area, knowledge and experience are the keys to a successful real estate transaction. One of the main keys to making the home-buying process easier and more understandable is planning.

With planning, you will be more able to anticipate requests from lenders, lawyers and a host of other professionals as well as discover valuable shortcuts in the home-buying process.

As a Jacksonville Florida first-time home buyer entering the marketplace, you need to ask yourself why you want to buy and what do you want in terms of real estate?

The more you know about the Jacksonville Florida area real estate marketplace, the more likely you are to effectively define what you want when it comes to price, preferences, lifestyle and needs. The list below is a good start on the path to home ownership and provides 7 reasons why owning your own home over renting is a smart move. 

7 Good Reasons to Own Your Own Home

  1. Tax breaks – The U.S. Tax credits you deduct the interest you pay on your mortgage and property as well as some of the costs involved in buying a home.
  2. Appreciation - Real Estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average of 6.5% each year from 1972 – 2005 and increased 88.5% over the last 10 years according to the National. In addition, the number of U.S. households is expected to rise 5% over the next decade, creating a continued high demand for housing.
  3. Equity - Money paid for rent is money that you will never see again. Mortgage payments let you build let you build equity ownership interest in your home.
  4. Predictability - Unlike renting, your fixed -mortgage payments won’t rise over the years so your housing costs may actually decline as you own the home. However, keep in mind that property taxes and insurance costs will increase.
  5. Savings - Building equity in your home is ready-made savings plan. When it comes time to sell, you can generally take up to $250,000 ($500,000 for a married couple) as a gain without owing any federal income tax.
  6. Stability - Remaining in one neighborhood for several years gives you a chance to participate in community activities, let’s you and your family establish lasting friendships and offers your children the benefit of educational continuity.
  7. Freedom – The home is yours. You can decorate it any way you want and benefits from your investment for as long as you own your home.

First Time Home Buyer Programs (FTHB)

First Time Home Buyer Programs are designed to make purchasing a home more affordable for low-to-moderate income families and individuals by offering fixed, low-interest rate mortgage loans.

In addition, Florida Housing also offers down payment and closing costs assistance to eligible borrowers, which can greatly reduce the out of pocket expense to the buyer. Here is a list of different home buyer programs you will want to familiarize yourself with:

  • First-Time Home Buyer Credit - Eligibility varies depending upon the year of your purchase. This credit reduces your tax bill or increases your refund depending on the tax you owe. The IRS refunds the credit, even if you owe no tax or the credit is more than the tax owed
  • First Time Home buyer Program - Offers 30-year fixed interest rate mortgage loans to first time homebuyers through its network of participating lenders and lending institutions
  • Florida First – 30-year, fixed-rate first mortgage is available to all borrowers who satisfy credit requirements and First Time Homebuyer Program income and purchase price requirements. Borrowers who qualify for this first mortgage program will automatically qualify for one of Florida Housing’s down payment assistance programs
  • Military Heroes - 30-year, fixed-rate first mortgage is available to veterans and active duty military personnel who satisfy credit requirements and First Time Homebuyer Program income and purchase price requirements. Borrowers who qualify for this first mortgage program will automatically qualify for one of Florida Housing’s down payment assistance programs Florida
  • Assist - Down payment and closing costs assistance program that is a deferred, non-amortizing, 0% interest, second mortgage that is repayable when borrowers sell or refinance the property, satisfy the first mortgage or no longer occupy the property as a primary residence
  • Home ownership Assistance for Moderate Income Loan (HAMI) – This down payment and closing costs assistance program is a fixed-rate, 10-year amortizing, second mortgage that is repaid on a monthly basis, for the 10-year term of the loan
  • FannieMae HomePath®-Purchase/Fannie Mae Foreclosure with No PMI loan
  • USDA Rural Zero Down Loan-30 year fixed zero down loan with a 620 score, Reduced Mortgage insurance payment
  • Good Neighbor Next Door-50% discount off home in targeted area if you are a teacher, firefighter, emergency technician, law enforcement employee or police officer
  • MyFannieMae - MyCommunityMortgage® - Affordable financing to serve low to moderate income borrowers
  • Freddie Mac’s Home Possible Neighborhood Solution® Mortgage – Offers borrowers low down payment options and flexible credit terms
  • Fannie Mae Homestyle Renovation Mortgage Program - Renovate a fixer upper, foreclosure, or short sale and roll in home improvement and repairs into the loan

Government Loan Programs

  • Loan Programs such as FHA require only a 620 score and Veteran Loans require no down payment
  • Dream Makers Program – get a $5,000 grant if you are in the military
  • FHA 620 – 640 range minimum credit score
  • HUD Home Loan Program -FHA loan for HUD owned homes or FHA foreclosure
  • Kiddie Condo-(parents) can co-sign for son or daughter without occupying property
  • Streamline 203k Renovation loan – Repairs and home improvements may be added into the mortgage to repair a home. Great for foreclosures and short sales

What is a Jacksonville Florida Short Sale?

A Jacksonville Florida short sale is the sale of real estate in which the proceeds from selling the property fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens’ full amounts.

The lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. Any unpaid balance owed to the creditors is known as a deficiency.

Short sale agreements do not necessarily release borrowers from their obligations to repay any shortfalls on the loans, unless specifically agreed to between the parties. Once the short sale is approved, no deficiencies are permitted after the short sale. A short sale is often used as an alternative to foreclosure because it mitigates additional fees and costs to both the creditor and borrower. There have been 2.2 million short sales in the United States during the Sub-prime mortgage crisis.

In some ways, buying a Jacksonville, FL short-sale property is just like a traditional purchase. However, there are a couple of ways in which the purchase agreement you and your agent draw up are different. The contract will specify that the terms are subject to the mortgage lender’s approval. In a normal transaction, the only party who would need to approve the sale is the seller. Some experts say that short sales are priced below market values, creating the opportunity for buyers to get a great deal or for first-time home buyers to get into a home when they otherwise might not be able to afford one.

"FYI - You could wait up to a year to close on a short sale, so be prepared to wait".

What is a Jacksonville Florida Foreclosure?

A Jacksonville Florida foreclosure is the process by which a homeowner’s rights to a property are forfeited because of failure to pay the mortgage. If the homeowner cannot pay off the outstanding debt or sell it by short sale, the property then goes to a foreclosure auction. If the property does not sell at auction, it becomes the property of the lending institution.

If you are house hunting, you may want to consider buying a foreclosed home, also called a real estate owned (REO) property. An REO property is owned by the lender as a result of the previous owner defaulting on the loan. This is also known as a foreclosure property or a bank-owned property.

The two common ways of buying a Jacksonville, FL foreclosed home are through a Jacksonville Florida real estate agent or through a public auction. There are many factors to consider when buying a foreclosed home compared to a traditional home purchase. REO properties are an affordable housing option, but there are also more things to watch for with this type of home purchase such as:

  • Property condition - Given that the bank has not maintained or had first-hand knowledge of the foreclosed home before acquisition, there may not be any record of property repairs or maintenance that would assess the true property condition. Often times, the bank is unable to verify the condition of the property or complete a Seller’s Disclosure. Buyers are allowed and encouraged to complete professional home inspections on the property.
  • With a typical real estate transaction, out-of-pocket expenses can occur before and after an offer to purchase a property has been submitted. These out-of-pocket expenses may include lender required documentation such as an appraisal or home inspection and bank-required minimum earnest money. Earnest money is a “good faith” deposit demonstrating the buyer’s interest in the property and may be an indicator of how much money will be deposited as a down payment.
  • You, as the buyer, should work with your agent prior to closing, to coordinate the date you may take possession of the property. Title issues may be discovered during the closing process and will need to be addressed and resolved, along with completion of all necessary paperwork to support the transaction. An extension of the close date may be requested by the seller if these issues cannot be resolved by the contract close date. Because of this, you as the buyer should allow enough time after the scheduled contract close date to schedule movers, furniture deliveries, utilities, and so forth.

What is a HUD Home?

A HUD home is one that has been taken over by the United States Department of Housing and Urban Development (HUD) as a result of a foreclosure on a FHA insured loan. When someone with a HUD insured mortgage can’t meet the payments, the lender forecloses on the home; HUD pays the lender what is owed; and HUD takes ownership of the home.

The house is then sold at market value as quickly as possible. These homes are usually obtained by a new buyer through a bidding process with a specific set of purchase rules. Using a Jacksonville Florida real estate broker is a very good idea. A good Jacksonville Florida real estate professional can guide you through the entire HUD process and make the experience much easier.

To purchase a HUD property in Florida, you must use a Realtor® registered with HUD.

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The median age of Jacksonville, FL is 29 years. Renters make up 33.78% of the population and 11.79% of houses and apartments are unoccupied. As your Jacksonville, FL Realtor®, I offer extensive knowledge in local neighborhoods, schools and market conditions.