Florida Saving For a House



You may have heard it before – putting at least 20% down payment will save you a lot of money. That is in fact true. If you put 20% down you will be charged lower interest rates and you won’t have to pay mortgage insurance. The down payment itself will act as a cushion against risk for the lender.


In Florida, lenders have “attractive” mortgage packages with 10%, 5%, 3.5% or even 0% down. They might seem appealing, but remember, if you make a smaller down payment you risk paying a lot more over the duration of the loan. And don’t forget that it will leave you hugely exposed to market price fluctuations. Many Florida homeowners saw the negative effects of that first hand in 2007/08 when their mortgages went underwater. So what we are saying here is that in Florida, saving for a house should be a top priority. Talk to Moreira Team, and we will give you handy tips on how to save for a mortgage loan.


Well, down payment is the biggest expense that you can offset using your savings. But it is not the only one. There also mortgage costs and fees that come with your mortgage loan, popularly known as closing costs. In total, they amount to 1% to 5% of the total loan amount. They include loan origination fee, processing fee, underwriting fee, attorney fee, appraisal fee, tax service and escrow among others. Depending on the terms of your mortgage, these costs can be rolled into your loan, or you may have to pay them upfront. The latter option makes more sense as it reduces the total loan amount and by extension your interest rates and mortgage insurance costs.


And there are also other seemingly minor expenses that carry a lot of weight. Since it will be a new home, you will need to connect telecom services like cable, phone, and internet. You may have to do some repairs and renovations or add some furniture and fittings. Even the moving process itself will need some money. And that is where your savings will really shine.


So it’s not just about the big expenses like down payment or closing costs, even smaller ones are worth saving for. Read our tips on saving for a house and remember to contact us for any follow-up information.



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