Buying Your First Home

Buying your first home is mostly a series of decisions made in the right order. Here is that order, with the Florida details worth knowing before you start, and links to the calculators for the money questions.

Step by step

1. Check your credit and your savings

   Pull your free credit reports at AnnualCreditReport.com, the official free site, and dispute anything that's wrong before a lender sees it. While you're getting ready to buy, hold off on new credit cards, car loans, and big purchases on credit. Lenders look at your debts again before closing.

2. Talk to a lender, then get pre-approved

   Pre-qualification is an estimate based on what you tell a lender. Pre-approval is based on documents, usually pay stubs, W-2s, or tax returns, and bank statements. Get pre-approved before you tour seriously, and ask the lender to show you the full monthly payment at your target price, taxes and insurance included, not just principal and interest.

   Payment calculator

3. Know every pile of money

   The down payment is only one of them. Plan for:

   • The deposit. Paid shortly after the contract is signed and held in escrow by the title company or an escrow agent. It's credited to you at closing.
   • Inspections. Paid up front, usually during your inspection period.
   • Closing costs. Lender fees, title insurance, Florida's taxes on the mortgage, recording fees.
   • Prepaid items. Lenders often collect your first year of homeowners insurance and a few months of property taxes up front for your escrow account.
   • Moving, and a cushion for whatever the first month in a house turns up.

   What buying costs

4. Look into down payment help

   The Florida Housing Finance Corporation offers first-time homebuyer loans, and down payment and closing cost assistance used with them, through participating lenders. It uses the IRS definition of a first-time buyer: you haven't owned and lived in a primary residence in the past three years. Programs, limits, and terms change, so check the current details on their site and ask your lender whether you qualify.

5. Pick the area, then the home

   Commute, flood zone, HOA and CDD costs, and what's being built nearby matter as much as the house, and you can't change them later.

   Compare the communitiesFind your communityFlood zones and insurance

6. Make an offer and get to closing

   In Florida your offer is a signed contract, and once the seller signs, its deadlines start running: the deposit, the inspection period, loan approval, closing.

   Under contract to closing

7. Line up insurance before closing

   Your lender will require a homeowners policy in place at closing, so start quotes early. If the home is in a high-risk flood zone and your mortgage is federally backed, flood insurance is mandatory too (FloodSmart). A flood policy normally takes 30 days to start, but there's no wait when you buy it while getting a mortgage.

   Insurance and flood zones here

8. After closing, file for homestead

   If the home is your permanent residence on January 1, apply for the homestead exemption with the Manatee County Property Appraiser by March 1. In the year you buy, the seller's exemption stays on the bill if they had one; from the next year on, only your own application counts.

Working with a buyer's agent

Before an agent shows you homes, you'll sign a written buyer agreement. It spells out what the agent does for you and how they're paid. Compensation is negotiable: it may be paid by the seller or builder, by you, or a combination. We'll walk you through how it works on any home before you commit to anything.