How Homeowners Insurance Affects Affordability

Florida is known for abundant sunshine, clean air, sandy beaches and warm year-round temps. Whether right or wrong, hurricanes also come to mind. The latter can greatly affect your monthly mortgage payment because an older home can cost you much more to insure.

Building codes have changed significantly since 1992. Today, residential homes are built to withstand higher wind velocity which equates to lower insurance cost. The newer the home the lower the cost. In our area of Sarasota and Charlotte Counties on Florida's west coast, the wind velocity rating changed in 2003 from 110 mph to 130 mph.

Other changes took place in mid-2007 which required all windows to be covered with storm panels or made with impact glass.

How does this affect hazard insurance cost?

The determination of risk is best left to insurance experts but as a general rule homes built prior to 1996 may fall into what's known here as the "Citizens Pool", the insurer of last resort if other underwriters feel the risk is too high to insure.

How does insurance cost affect affordability?

With interest rates at historic lows increases purchasing power. The lower the interest the more home a person can afford. The same is true for insurance; the cheaper it is, the more home you can afford. In the example below, the insurance savings on a newer home versus a home built prior to 1992 can increase your purchase price as much as $25,000.

4.5% annual mortgage interest on a $150,000 home financed for 30 years, the P & I payment is about $760. Add $125 per month for insurance (average for a newer $150,000 home.) If your insurance was double, or $3000 per year, the extra $125 per month lowers your purchasing power by approximately $25,000.

4.5% interest = $5.06 per thousand borrowed.
$5.06 x 25 = $126.50.

To have the same house payment if insurance costs $3000 per year ($250 x 12 = $3000) you would need to purchase a home for $125,000.

Newer home built after 2002:
Price: $150,000 = $760.00 per month
Insurance $125 per month (approx)
Total monthly payment= $885*

Older home:
Price: $125,000 = $633 per month
Insurance $250 per month (approx)
Total monthly payment = $883*

* Does not include property taxes.

The monthly insurance premiums above are approximate and can vary greatly. Speak with a licensed insurance agent for a quote on a particular home.

Other factors that may increase or decrease your insurance cost include proximity to the coast and construction materials.

There are ways to decrease insurance premiums on an older home. One effective and affordable way is to install storm panels. You should have a licensed inspector perform a wind mitigation inspection to determine what changes could lower your insurance cost. For more information on the areas we serve,  please visit FLSunTeam.com  

Closing Costs When Buying a Home in Florida

As a REALTOR ® I'm often asked what the typical closing costs are when buying a home in Florida and who pays them. There isn't a definitive answer because there are a lot of variables, such as if the purchase is cash or financed, purchase price, HOA, etc. Lender's financing charges vary too but I can tell you what closing costs are required by the State.

 

Florida is a non-income tax state, instead there are taxes on a home purchase to help generate revenue. There are several taxes that must be paid, plus title insurance. There are three taxes on a real-property purchase and depending on if the purchase is financed or cash determines what is required. Most closing costs are negotiable but generally the seller pays doc stamps on the deed and the buyer pays doc on mortgage and county tax stamps.


The first "hard cost", and one that must be paid on every purchase, is documentary stamps on the deed which is generally paid by the seller. The cost is .70 per $100, or $700 per one-hundred thousand dollars of the purchase price. A $200,000 home will have a $1400 "Doc on Deed" tax. If it's a cash purchase, that's all the state requires as a tax.

If the home is financed, there's a "Doc on Mortgage" tax at .35 per hundred, or $350 per $100,000 of the mortgage amount, not sales price.

If the purchase is financed, there's also a county tax of about 2% of the mortgage amount.

Title Insurance.

There are two types of title insurance, Owner Policy and Lender Policy. Who pays owner title policy is negotiable between buyer and seller.

Florida is a Title Insurance state. All residential purchases should have title insurance and if the purchase is financed, the lender will require it. Title insurance protects the buyer from many liens that may have been missed in the search, but title companies are generally very thorough and typically don't miss much.

Title insurance protects the buyer (or lender) from liens up to the purchase price of the home.

Florida regulates the cost of title insurance but title companies may have different preparation costs. It's wise to check with several title companies to ask what they typically charge for their services.. A buyer can ask for a preliminary HUD-1 to ascertain approximate closing costs, but until the title company has the figures from a lender, they can only give you the hard cost, such as title insurance, their fees and taxes and who pays them as outlined in the purchase contract.

Current Florida owner's title insurance cost based on purchase price. (as of Feb 28th, 2013)

$5.75 per $1000 up to $100,000.
$5.00 per $1000 of purchase price over $100,000 to 1 million.
$2.50 per $1000 of purchase price over 1 million to 5 million.
$2.25 per $1000 of purchase price over 5 million to 10 million.
$2.00 per $1000 of purchase price over 10 million.

Other fees include title search, tax service fee, flood certificate and lender title policy (if financed), settlement or closing fee, search fee, title service fee, deed recording and mortgage release fee. It sounds like a lot and depending on what title company is closing the deal, the total cost for these fees (not including owner title policy) should be less than $1500. (This is an estimate for a $200,000 purchase. Your cost depends on purchase price and other variables.)

Again, these closing costs do not include lender fees if you're getting a mortgage. Your lender is required to supply a Good Faith Estimate (GFE).

If your looking to buy or sell a home in Sarasota or Charlotte County, Florida, we'd appreciate an opportunity to help you. Our Website http://FLSunTeam.com or call us 941-504-4019.



Best Places to Live Rotonda West Florida

Rotonda West, a golf course community in Charlotte County, Florida, is know as The Big Circle. With its fairways winding through the community, the five courses offer great golf no matter your skill level. Rotonda is located just south of Englewood.

Rotonda is a growing community and depending on what area you like, existing home prices start under $100,000. Newer pool homes start in the high 100's. New construction including the home site and pool about $240,000.

If you'd rather be on a fresh water canal, there are many homes and vacant lots to choose from.

Rotonda is about fifteen minutes from Gulf beaches located on Manasota Key.





Please watch this video about Rotonda West.


For more information or if you'd like us to email some homes for you to view, give us a call. 941-504-4019 or Email or visit our website www.FLSunTeam.com. We're here to service all of your real estate needs.

Best Places to Live North Port, Florida

Many people get an itch for warm weather and Florida often comes to mind, especially in the dead of winter; day after day of gloomy skies, snow and ice with no end in sight. Can't blame them, that's exactly why we live here.

North Port is a great place to live. Located in southeast Sarasota County bordering Charlotte County, Florida, it's a city with its own government and services although the schools are operated by Sarasota County School District, one of the best in the state. North Port has one high school, two middle schools and five elementary schools. Bus service provided for most areas.

No matter your price range, there's something for everyone in North Port from mobile home parks, single family homes, villas, golf course communities, waterfront, condos and estate homes on acreage with horse property.

North Port enjoyed record growth in the early to mid 2000's and many single family homes were built. Like most places in the country, the housing crash resulted in tumbling prices and high inventory of homes at rock-bottom prices. Mid 2012 saw prices stabilize and inventories dwindle, but prices are still low with newer homes priced in the low 100's and pool homes starting near the mid 100's.

North Port has many fresh water canals and some gulf access waterways via the Myakka River as well as three golf course communities; Bobcat Trail, Sable Trace and Heron Creek.

Watch for the alligator!!


(No, they're really not that big!! Just having a little fun.)

For more information about North Port schools, homes, business and this great community, visit our website send us an email or give us a call, 941-504-4019.

Waterfront Homes in South Gulf Cove Florida

Brand New Waterfront Home South Gulf Cove FL

 

If you can't find what you're looking for, you should consider building a new home. South Gulf Cove, located in the Cape Haze penninsula of Charlotte County offers one of the best areas in southwest Florida.

This custom waterfront home with 2189 sq ft, three bedrooms, two batha and an office/den and two car garage is priced at $298,750 including a waterfront home site, heated pool with brick paver deck and lanai, all permits and fees. Upgrades include granite in the kitchen, stainless kitchen appliances and separate laundry room. South Gulf Cove is a short drive to beaches. Click here to view pictures and details.

Video of South Gulf Cove.



Contact Kent Wolfe, Sun Realty.
941-504-4019