Types of Available Mortgages:
· Fixed-Rate Loan. Interest rates and monthly mortgage payments are fixed for the life of the loan (typically 15, 20, or 30 years).
· Adjustable-Rate Mortgage (ARM). Mortgage payment rates and loan payments vary during the life of the loan. With these mortgages, interest rates start lower than with a fixed-rate mortgage and then become variable. At specific intervals, a lender adjusts the rate up or down as interest rates fluctuate, usually based on a standard index.
· Balloon Loan. The Annual Percentage Rate (APR) is fixed for a set number of years (usually 7) and at the end of that period, the entire loan balance is due in full.
· Federal Housing Administration (FHA) Mortgage. Eligible parties may qualify for a down payment as low as 3%. Loans come from lenders that are approved by HUD.
· VA Loans. The Department of Veterans Affairs helps eligible veterans and service personnel get loans through conventional lenders. Down payments might not be required.
Tips For Purchasing Your Sarasota or Manatee County Florida Home
There are many steps involved in buying a home in Sarasota or Manatee County Florida. A buyer needs to determine how much to spend on a house, what type of mortgage is best, find a home, make an offer, get a loan and close the deal. The buyer might also want to get preapproved for a loan and get an attorney and a real estate agent to help with the process.
Visit Homes: Sarasota and Manatee County homes listed for sale can be found on the internet, newspaper ads or through the services of a real estate agent. You will want to focus on home descriptions (number of bedrooms and bathrooms), information about the neighborhood and school districts. You should also consider the surrounding elements: (i) amount of road traffic; (ii) airport flight paths; (iii) zoning and deed restrictions; (iv) future development; (v) green spaces that can be developed later; and (vi) potential nightmare neighbors (ask around the neighborhood).
Making an Offer: After you have found the Sarasota or Manatee County home of your dreams you will need to make an offer to purchase it. The seller may accept your offer, make a counteroffer or reject your offer. If the seller counters your offer, you may need to negotiate until you can agree on the terms of the sale. Even if your offer is not accepted, you can make another offer.When you present your purchase offer to the seller, or when your offer is accepted, you may have to include a purchase money deposit. The funds will usually be held by the real estate broker until closing. At closing the funds will be applied towards the purchase price.
Financing Your Home Purchase: After you have reviewed your finances and purchasing power, unless you are going to be a cash buyer, you should learn about the different types of mortgages and financing available. The financing for your home purchase will have two main documents: promissory note (the loan of money for your purchase), and mortgage (a lien that acts as security for the repayment of your loan).
Home Inspection: A home inspection involves having a professional inspector check the condition of the home and look for potential problems: wiring, fixtures, plumbing, the foundation and the roof. An offer to purchase a home should be contingent on the inspection report. If repairs are required, you may be able to negotiate for a credit at closing for the amount needed to make the repairs.
Homeowners Insurance: Homeowner insurance policies provide coverage for damage to your home caused by theft, fire and lightning, smoke, frozen pipes as well as ice and snow. Homeowners insurance also provides coverage for liability claims, medical payments to third parties and legal costs if a lawsuit is brought against you due to an accident that occurs at your home.
Real Estate Closing: A real estate closing is the process where ownership of the home is transferred from the seller to the buyer. A real estate deed is the document that evidences the transfer of ownership from the seller to the buyer; the buyer receives the deed from the seller at the closing. In exchange, the buyer pays the seller the purchase price. The real estate deed is then recorded in the county's recording office.
Closing Costs: At closing, a buyer and seller should anticipate the following costs and expenses to be listed on the HUD-1 (Closing Statement). Depending upon whether you are purchasing or selling a home in Sarasota or Manatee county different fees will apply. The real estate closing fees include: title search and examination fee, title insurance (owners and lenders), closing fee, documentary stamps on the deed and mortgage, inspections, survey and recording fees.
Tax Benefits Upon Sale of Residence: When you sell your home you may qualify to exclude all or part of any gain from the sale of your main residence. To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have: (i) Owned the home for at least two years (the ownership test); and (ii) Lived in the home as your main home for at least two years (the use test). If you qualify for the exclusion, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return). However, you cannot deduct a loss on the sale of your main home.
COMMON HOME BUYER QUESTIONS:
Q. Should I close my home purchase with my realtors in house title insurance company rather than an attorney. Who does the title insurance company represent?
A. A title insurance company can't represent any party throughout the closing process. Even an attorney employed by a title insurance company cannot represent you. Realtors typically suggest the use of their in house title insurance company because it is a convenience for them. Only an attorney can represent you throughout your transaction and generally
at a cost that is competitive with a title insurance company.
Q. Should I hire an attorney before I sign my Purchase and Sale Contract?
A. Most Purchase and Sale Contracts in Florida contain a clause stating that the parties have the right to consult an attorney prior to signing any contract. Realtors may not legally explain the legal ramifications to you. We can protect your interests better the earlier you contact us. We can also provide your realtor with a contingency allowing us to review your Contract after you sign it.
Q. Must I hire an attorney for my closing?
A. In Florida it is not a requirement that an attorney conduct your closing. However, the cost of title insurance does not increase when an attorney represents you at a closing. The big difference is that title insurance companies are limited to conducting the closing, and may not draft, review or interpret your real estate contract.
Q. What will be my closing costs?
A. The payment of closing costs is negotiable under your real estate contract. However, it is customary in Sarasota County, Florida that the buyer pay the following costs at closing:
- Title Insurance. Fees to search and examine the title to the property, the cost of the title insurance policy
and the closing fee.
- Survey. Evidences whether the property has been altered. If the property is in a flood zone, an elevation
certificate will also be required. The price of a survey can vary depending on the size and location of the
property but typical ranges from $400 to $800.
- Wood Destroying Organism Report. Termite and insect report on the property.
- Recording Fee. The cost to record the Deed and Mortgage in the Public Records is $10.00 for the first page
and $8.50 for each additional page.
- Mortgage Financing Costs. The Lender's costs associated with your mortgage.
Q. Title Insurance and why I need it?
A. If you are financing your purchase, your lender will require that you purchase title insurance insuring the mortgage given at the closing. A simultaneous policy can be issued insuring the buyer. The policy will protect the buyer and lender from: False impersonation of a seller or other persons previously in title; Forgery and fraud; Improperly executed Deeds; Deeds executed without a required spouse's signature; Undisclosed heirs or descendants of former owners of your property; Survey matters; and Liens appearing after closing but prior to recording of instruments.
Q. Must I be present for my closing?
A. No. Many purchasers are domiciled in other states or countries and purchase real estate in Sarasota and Manatee county as second homes or for investment.
Q. As a cash purchaser do I need a survey and title insurance?
A. Although neither a survey nor title insurance are required under Florida law, we highly recommend that you obtain both. Title insurance is paid only once (unlike most types of insurance) and remains effective for the entire time that you own your property.
Q. What forms of payment are acceptable at closing?
A. Your closing funds should be wire transferred to our trust account the day before closing to ensure that we can disburse timely. We also accept bank certified or cashier's checks. However, we can't accept personal checks.