Winter is a busy time in Florida real estate. When temperatures are cold up north those dreaming of a warmer future escape to the south. Often times, buyers wait until tax time to purchase in the spring, opening up some great opportunities during the winter months for homeownership.
Rachel Saylor with Amerifirst Home Mortgage offers advice for holiday home buyers:
1. Purchase by December 31st for Homestead Exemptions
The biggest benefit to purchasing on or before December 31 is claiming homestead exemption. The state of Florida offers a tax discount (aka Homestead Exemption) for purchasing a home as a primary residence. As long as the purchase is completed on or before December 31st, that discount goes into effect in November of the following year when the property is reassessed.
2. Save as Much as Possible
The holidays are a great time to be mindful of spending, especially when budgeting for a home purchase. After a buyer has been preapproved, I sit down with them to review monthly payments and the cash that will be needed for the down payment and closing costs. In many cases, buyers are approved for much more than desired, so it’s important for me to make sure that we find a ‘sweet spot’ in terms of comfort for payment and cash out of pocket. Once a buyer is equipped with this knowledge, it makes it easier to set aside a ‘house fund’ so that the holidays don’t throw a wrench in the home buying process.
3. Minimize Credit Card Purchasing
Remember to be mindful of credit card balances over the holidays. When possible, be sure to keep or pay down cards to 30% or less of credit limit. Running a balance higher than 30% can have a negative impact on credit score which can result in changes to your type of loan approval. Additionally, late credit card payments are credit score killer! If there are plans to be out of town, be sure to have all cards set up to auto pay. This time of year is hectic enough without having to try and schmooze credit reps to eliminate late fees.
4. Buy on Christmas
Ok, so maybe don’t force your real estate agent to show you homes on Christmas day, unless they are open and available, but remember that Christmas week is a great time of year to shop for homes. There are several reasons. First, very few people are out shopping for homes during Christmas week, so you are less likely to compete with other buyers. Second, people tend to feel generous during the holidays, meaning that they might be willing to accept a lower offer. Finally, a buyer who has listed their home during the holiday season is usually eager to sell.
5. Better Interest Rates
Interest rates are historically low, even while rates have been rising throughout 2018. We are still locking in 30 year fixed rate mortgages for under 5%. Be wary of online calculators as it is more beneficial to speak with a local, direct lender (like yours truly). There are possible discounts for end of year purchases, and often times can be surprised by the savings. As a lender, I am highly motivated to get buyers into their home at the lowest possible rate, in as little as 8 business days, and enjoy the homestead exemption for 2019.
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