Choosing an Existing Home
This can be a particularly attractive option for many people, for instance immediate availability, location in a maturing neighborhood or in the case of waterfront homes simply because there is limited land available. A little time and money may have to be spent preparing the home if rentals are required, however your Realtor can advise on this and supervise any work in your absence if required..
The M.L.S. (Multiple Listing Service)
The M.L.S. lists every home or building plot, offered for sale by ANY licensed real estate agent in the area. The full MLS service is only accessible by real estate professionals. Our Realtor’s can pre-search for, location, price range, pool, etc. No need to drive around the streets looking at FOR SALE boards, searching the newspapers and magazines, or contacting different real estate companies.
Members of the M.L.S. co-operate on sales. Remember; any Realtor will be pleased to show and sell any property that is listed and not just the homes with their company sale board outside. However, if you are intending to rent out the property it is important to choose a Realtor who is knowledgeable on Homeowner Deed Restrictions, Property Management & Rental Opportunities. At Secret Places we believe finding your ideal vacation home is the start of our on-going relationship – we are with you for the long term and not just until your day of closing.
This very efficient viewing system makes a sensible option for overseas clients or those with limited time in the area and we would suggest the following scenario.
- Select the most interesting possibilities and let your Realtor plan a route.
- If there are a number of homes or building plots to view then do a drive-by and short list the best prospects.
- Carry out an inspection on the homes you are really interested in. Most properties have an electronic lock-box fitted which your Realtor can access. This may give availability for viewing without an appointment.
- If your offer is accepted, your Realtor will prepare the sales contract for signature and a deposit will be required. An Initial a $2000 - $5000 is acceptable with the balance up to 10% to follow at an agreed date.
- If a mortgage is required the contract is made contingent upon this being granted.
- If a mortgage is required the contract is made contingent upon this being granted.
- It is unusual to have a chain sale in Florida and sellers tend to be ready to move out within a short period of time. The final closing or completion can take place as soon as the mortgage or other funds are in place.
- If you are not able to return to Florida for the closing then the title company (a solicitor/attorney is not legally required) will mail you out the closing papers for signature and your management company can take possession of the home on your behalf.
Financing
You will require a U.S. bank account which you can open upon arrival. It is not necessary for the bank account to be with the same lending institution as your eventual mortgage.
The lending system in Florida is primarily based upon the borrower’s demonstrated ability to repay the mortgage loan from income. Personal assets and net worth are regarded only in that these assets can or should produce income. For foreign purchasers the mortgage term can range from 15 to 30 years, regardless of the applicants age. Down payments will typically range from 30% - 40% but other options may also be available.
Income will primarily be determined from your recent pay stubs, alternatively if you are a self employed person you should provide copies of your last two tax reports as filed with the revenue authorities. As a general rule no more than 25% to 28% of your monthly income (Gross before Taxes) should be committed towards paying for your vacation home.
The mortgage Application Process will initially require a signed contract for the purchase of a house, a completed loan application form, plus a fee for valuation.
In order to save time and the inevitable criss-crossing of additional paperwork you should also have available:
- Proof of income for the last 2 years.
- A recent statement from your Mortgage company showing outstanding balance and monthly payments.
- Monthly Statements on any credit cards you may have.
- Copies of any lease payments or other loans you may have.
- Checking and Savings account bank statements from your own bank.
- Copies of any stocks and shares you may own.
- Income Tax returns for two years or if self employed, copies of accounts.
- Proof that you will have the cash deposit available for closing.
Do not be afraid to show existing loans, this is taken as a good sign that you are credit worthy. Remember when signing a contract to purchase, your seller or home builder will normally accept earnest money (a holding deposit) of $2000 - $5000 thus enabling you to send on further funds later.
US or Foreign Mortgage Provider?
For vacation homes, the U.S. Internal Revenue Service (IRS) currently allows full tax relief on US$ mortgage interest, therefore if you intend to rent out your home, this tax relief can generally be used to off-set the costs associated with renting your property.
A loan taken out overseas would probably involve making re-payments with monies on which tax has already been paid. In addition you loan would be subject to currency fluctuations, remember if renting your home through Secret Places, rental income is paid in U.S. Dollars.
Need more help?
Our team of professionals are all licensed Realtors and are able to act for potential homeowners as their Buyers Broker – our aim is always to provide a full and ongoing support service for absentee and foreign owners. If you would like to pursue your Florida dream further, simply need some unbiased advice, or you have questions to ask - we will be glad to help. |
