Florida Mortgage Rates

Florida Real Estate Prices

Florida is one of the most desirable states to live in. Most people who choose to relocate to a larger city choose one in New York, California or Florida. The state of Florida is also the fourth most populated in the nation. People who live in this unique peninsula state enjoy favorable temperatures all year. The summers are hot, but the spring, winter and fall seasons are all mild. Those who live close to the beach enjoy cool breezes during all months of the year. Unlike many other coastal states, the beaches of Florida are not tainted with breakwater discoloration. The waves are more clear and the sand on the beaches is pristine and white. Florida is not only a popular state to retire in, but also a great choice for families, couples and singles of any special interest group.

There is plenty of available real estate on the market in Florida today. Prices for real estate vary by city. The size of the city and its location are the two key factors that determine how high property values are. Cities that are closer to the beaches in larger cities are the most expensive areas to live. Smaller towns located further inland are less expensive; some very small towns have an extremely low cost of living. Due to a mix of luxury homes and homes on the opposite end of the spectrum, the average value of a Florida home is best understood by city size. The national home value average is about $177,000.

Popular Florida Cities To Live In

There are several popular cities in Florida that fall below this number, including Cape Coral-Fort Meyers and Gainesville. Cape Coral’s average home value is $85,000, while Gainesville’s is $165,000. Cape Coral is expected to be one of the best places to invest in. It is quickly becoming a waterway; also there are many beach-side properties being constructed. Values are expected to spike and possibly quadruple by 2030. Jacksonville also makes the list and will be discussed in the following paragraphs, which will include the top three places to live or relocate to in Florida.


This city has a population slightly higher than 800,000. Even though it is Florida’s largest city, the cost of living and real estate values are lower than national averages. Jacksonville’s average home value is about $145,000. Very few warm states have such low average prices in the largest city. Jacksonville has many jobs in distribution and transportation, including intrastate, interstate and international. Since the need for transport and distribution does not cease, the city is expected to grow even more in the continuing years.


Miami is a well-known place for beach travel. It is also a popular city for retirement. The population is a comfortable 420,000. There are plenty of jobs to be found in this city. International trade, media and other entertainment companies provide thousands of jobs. Also there are hundreds of jobs involved with tourism. Cruise lines especially rely on this city, as many major providers use the Miami port; some liners have their headquarters in the city also. Miami’s average home value is about $230,000. Keep in mind that the high average is due mostly to a large number of very high-priced properties. There are properties below $100,000 in the city.


With a population of about 335,000, the city of Tampa is one of the most pleasant places to live in the Gulf Coast side of Florida. Several sports teams are the key feature of Tampa. In addition to the teams providing plenty of jobs, there are also several Fortune 1000 companies located there. Florida’s largest tonnage port is also located in Tampa. For these reasons, the city has a solid foundation and is only expected to expand and grow economically. Now is the best time to buy; properties are considered to be a buyer’s market. At an average of $161,000 for home values, the prices are below national average. They are expected to climb steeply by 2030, possibly doubling or tripling in some locations. This will be due to the demand for gulf property and increasing population numbers, in addition to economic recovery.

Types Of Mortgages Offered In Florida

There are several different types of mortgages offered in Florida. Every buyer has different personal circumstances, whether it be a business, family or no obligations at all. Because each person’s circumstances differ, there is no single type of loan that is right for everyone. Regardless of life details, every buyer will be able to find a suitable mortgage to fit their needs, assuming credit ratings are optimal. The following paragraphs will discuss the different types of mortgages available in the state.

Fixed Rate

Fixed rate mortgages are the most popular type of mortgage accepted. These are also the “safest” in the eyes of consumers. With a fixed rate mortgage, monthly payments will always be the same amount, unless the buyer decides to pay extra, assuming the loan terms permit this. The following points include a brief definition of what comprises a fixed rate loan:

  • The interest rate is fixed – there are no adjustments for any reason during the life of the loan.
  • Average loan life is between 15 and 30 years. Some loans may have 45 or more in special circumstances.
  • The interest rate is usually slightly higher than the initial rate offered on an adjustable rate mortgage.
  • The only way monthly payment amounts will ever change is if the buyer decides to refinance the home later.
  • This type of loan is not tied to an index, unlike an adjustable rate mortgage.
  • Total amount of interest paid during the life of the loan is much higher on average than any short-term loan, such as adjustable rate or balloon mortgages.

Adjustable Rate

Most buyers are initially put off by the thought of an adjustable rate mortgage, due to the higher monthly payment amounts. Also the unpredictability of these mortgages is enough to make most people worry – especially those who have a budget which is stretched thin already. There are several defining features of an adjustable rate mortgage:

  • The initial interest rate is low. This rate is enjoyed for a year before the possibility of it rising.
  • Adjustment periods are the times when the interest rate is consistent. At the end of the period, the adjustment is calculated.
  • Re-calculated payments are based on the index rate. When an index rate changes, so do the interest rates. There are several things that influence this fluctuation, including treasury securities or national and regional cost of funds averages for savings and loan associations’ funds.
  • The margin is the points percentage that lenders tack on to the index rate to calculate the interest rate.
  • Adjustable rate mortgages have interest rate caps, which are limits on how much the interest can be changed to affect the payment amount.
  • Some loans include an initial discount, which is a promotional offer that is only good for the adjustment period.
  • There are some loans that can be set up with a conversion clause. This will allow the buyer to convert the loan to a fixed rate mortgage at specified times.
  • Early pay-offs are usually discouraged. The short average of these loans is usually between 3 and 10 years, so the lender needs to ensure they earn a profit. Usually an early payoff penalty will be assessed.

Balloon Mortgage

As the name would imply, the balloon mortgage is considered large and expensive. It is the least common type of loan granted to home buyers in the state of Florida. In some cases, it may be the best choice for special conditions. For example, if a buyer is expecting a large guaranteed amount of money in three years, but wants an inexpensive mortgage rate until then, this may be the perfect option. Following are the main features of this type of loan:

  • The loan does not fully amortize, which results in a large balance due at the end of the loan’s life.
  • Always the largest payment, the last, or “balloon,” payment is sometimes too high for most buyers to afford.
  • Most common in commercial real estate transactions, but rarely in residential real estate.
  • The loan will have either a fixed or floating rate interest, depending on the terms.
  • Usually arranged for a 7-year loan or less.
  • Monthly payments are usually calculated using a 30-year fixed rate for amortization.
  • As required by the Truth In Lending Act, balloon payment amounts must be stated in the loan contract.
  • Some balloon mortgages feature a “two-step” plan for buyers who cannot pay the final payment. This will include either a fully amortized payment arrangement or paid off in two payments.

VA Mortgage

Veterans enjoy one of the most optimal long-term loan options available. VA loans are easier for a veteran to obtain than a traditional loan in most cases. These loans have special terms and generous allowances. The following features are what define VA loans:

  • Loans are offered to American veterans or their surviving spouses if the spouse is not remarried.
  • This type of loan is especially beneficial for veterans who cannot obtain other financing without a large down-payment.
  • Mostly small towns and developing cities are highly approved by the VA.
  • Veterans are granted 102.15% financing without a private mortgage insurance agreement – or they may have a 20% financing allowance for a second mortgage.
  • There is a fee between 0% and 3.15% that must be paid to the VA; this can be financed also.
  • Veterans can borrow the full value of the home and additional money to cover closing costs, assuming it doesn’t exceed the 102.15% maximum.
  • Up to $6,000 may be borrowed for energy-efficient improvements to a home.
  • No monthly PMI means more allowance for loan amounts.
  • With no down payment made, the maximum amount in some approved areas is $417,000. In some high-cost places, this amount may increase to $1,094,625.

Florida Foreclosure Laws

Florida is a non-recourse state, meaning the buyer is more protected than the seller in a transaction. This means that the buyer is not personally liable for more than the home’s value. Lenders may foreclose on the property, but they are not allowed to go after the buyer personally if the amount received is insufficient. Buyers are only liable to pay the difference of the insufficiency against fair market value, not the value presented by the lender. Currently the judicial system of foreclosure states that after a motion has been filed by the lender and the buyer has been notified, the buyer has right of redemption only if the amount can be paid in full. The entire process may take more than a year. This is expected to change in the near future to a judicial system, in which the process would take three months.

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