Florida mortgages: insurance, doc stamps, homestead savings and buyer help

#Homeowners insurance and Citizens

Your lender will require a homeowners policy before closing, and in Florida it is often the hardest cost to predict. Wind exposure, roof age and distance from the coast all move the price, and some insurers are reluctant to cover older roofs.

If private insurers won’t offer coverage at a reasonable price, Florida law provides Citizens Property Insurance Corporation as an option. Its eligibility rules keep it a fallback:

• You are generally eligible only if no private insurer offers comparable coverage, or if the private premium is more than 20% higher than Citizens’ premium for comparable coverage.
• At renewal, an offer from a private insurer that is not more than 20% above the Citizens renewal premium leads to nonrenewal of the Citizens policy. Its Clearinghouse, required by state law, checks private offers.
• Through depopulation, private insurers approved by the Office of Insurance Regulation can take policies out of Citizens.
• Citizens warns that its policyholders can be assessed if it lacks the money to pay claims after a major hurricane or series of storms.

Flood is separate. Standard policies don’t cover flood damage, and a home in a FEMA Special Flood Hazard Area with a federally backed or regulated loan needs flood insurance — so price it during your inspection period too.

#What the median Florida home costs each month

The median home is above the US median and Florida’s median household income ($77,735) is below the national figure, so the median home costs 5.1 times income, higher than the US ratio of 4.4. At Freddie Mac’s 30% guideline the median income supports about $255,000 with 10% down — $141,900 below the median home value; buying the median home takes about $120,900 a year. Use the mortgage payment calculator with your own insurance quote, or the affordability calculator.

#Documentary stamp and intangible taxes

Florida charges three state taxes when a purchase closes, and two of them are tied to the mortgage:

Florida’s deed tax rate is the 9th-highest statewide rate among the states and DC. Miami-Dade County applies a different deed rate to single-family homes — see the Miami guide. Who pays the deed stamps is set by the contract; the mortgage taxes follow the loan, so a buyer who borrows less pays less. The closing cost estimator includes all three.

#Homestead exemption and Save Our Homes

Florida’s homestead exemption can reduce the taxable value of your permanent residence by up to $50,000. The first $25,000 applies to all property taxes, including school taxes; the additional exemption applies to assessed value above $50,000 and only to non-school taxes, and that part is now adjusted for inflation each January. File Form DR-501 with your county property appraiser by March 1 of the first tax year you own and live in the home.

The exemption also starts Save Our Homes: after the first year, the assessed value of a homestead can rise by no more than 3% a year, or the change in the Consumer Price Index if that is lower. If an example home assessed at $300,000 rose 10% in market value in a year, its assessed value could rise only 3% — about $21,000 less taxable value than without the cap. When you move, you can usually transfer (“port”) some or all of that built-up difference to a new Florida homestead if you establish it in time; the deadline runs from January 1 of the year you left the old one.

#Florida Housing programs

The Florida Housing Finance Corporation lends through participating lenders. Its programs require a minimum score of 640 and, for most, that you haven’t owned and lived in a primary residence in 3 years; income and price limits are set by county.

Florida Housing’s Hometown Heroes page doesn’t show funding status, so confirm availability with a participating lender before you count on it. Many counties and cities add their own help through the state’s SHIP program; see the Tampa guide for one example, and compare all options in the first-time buyer programs guide.