FINANCING

If you’re considering buying a home in South Florida, either as an investment, vacation home, or permanent residence, it’s important to consider the terms and conditions of getting a mortgage loan. Many financial institutions offer mortgage loans, from local and national banks to online financial institutions and private lenders.

Getting Approved for A Mortgage Loan

With low mortgage rates (ranging between 4.5 and 6%) many buyers choose to finance their purchase.

The following are some of the most common factors that influence the termsand conditions of the loan:

1. Your nationality

2. Legal status in the United States

3. Your credit history (if you have one)

4. Your income and bank accounts

Requirements for getting a mortgage as a foreign national:

1. An entry visa is required, depending on the buyer’s nationality. All non resident foreign buyers must submit a copy of their passport with a valid tourist visa (B 1 or B 2).

2. At least 20% to 30% of the value of the property as a down payment.

3. At least 30% to 50% of the value of the property as a down payment for condominiums.

4. Proof of income:

• Bank statements
• Reference letters from your bank or credit institution
• Two forms of identification

Borrowing Costs

The costs of obtaining a loan vary from institution to institution and depends upon the services of a mortgage broker, if you are using one.

You can use the following guidelines:

1. Getting a mortgage loan directly from a local bank tends to be cheaper. However, it will be limited to that institution’s specific financial products.

2. Hiring the services of a mortgage broker is very common and, despite usually being more costly than going directly to a financial institution, you’ll have a much wider range of options.

3. The interest rate varies. The interest rate you’ll be offered depends on your credit history, monthly income, debts, type of property, and bank accounts. If the client doesn’t have an established credit record, they will be required to pay a higher interest rate or be required to increase the down payment.

4. The down payment varies, depending on: 

1. The type of property that will be purchased:
   1. Single family home has the lowest down payment (usually 10% to 20%)
   2. Townhouses require a 20% to 30% down payment
   3. Condominiums requires the highest down payment (typically from 40% to 50%)
2. Nationality
   1. Foreigners with no established credit history are required to pay a 30% down payment. This payment increases depending on the home country risk.

Ready to Buy or Sell in Miami’s Fastest-Growing Market?
Whether you’re searching for a luxury new development or looking to sell your property at the right moment, Jester Niño Real Estate offers strategic guidance, market insight, and personalized support to help you make your next move with confidence.

Jester Niño
Broker Associate
C5 | EXP Realty

1. Ignoring local legislation and not hiring the proper lawyer. Knowledge of local tax and real estate legislation will help you save time and money. For example, what do you do when one of the following occurs?

• Rente’s Payment is late
• Breach of contract
• Termination of contract
• Tenant disturbs neighbors

Before proceeding with any legal eviction proceedings, you must comply with certain steps and provide proper notices, which can mean months of delay in the process. It’s extremely important to know what the law prescribes regarding notices, the number of days needed for a notice to be valid, and how and when notices should be delivered. That’s why we recommend hiring the services of a lawyer specializing in these particular issues.

     2. Tenant pre selection. Pre selecting potential tenants is one of the most important steps in the process and one that many owners tend to skip. Despite the negative impact of having an empty property, accepting a tenant who wasn’t pre selected tends to result in greater expenses and more headaches over the long term. Establish a pre selection system and stick to it. The most common pre selection elements are:

• Criminal background
• Credit report
• References from previous landlords
• Work references
• Personal references
• Average time they live in each property

Whatever your system, it is important to take local and federal Fair -Housing Laws into account.

     3. Not Knowing the local regulations. Many of the lawsuits brought against owners are the result of violations of the Fair Housing Act. This is the legal system that protects potential tenants from discrimination. Many owners pay little attention to these regulations because they use common sense and do not discriminate. Unfortunately, common sense often violates the regulations established by law. The regulations prohibit discrimination based on:

• Race
• Color
• Religion
• National origin
• Sex
• Physical disability

These regulations apply not only to the pre selection of the possible tenant, but also during the landlord/tenant relationship. Always remember that the American system is a litigious one. This system is ideal for lawsuits and it’s very common to see advertising that encourages people to hire a lawyer if they believe they have been discriminated against. Therefore, to prevent legal issues, the best thing you can do is to become familiar with the system. More importantly, consult with a legal expert who can provide you the necessary guidance.

     4. Lack of local market knowledge. Before renting a unit, it is important to do the proper research about current real estate statistics in the specific community or building in which the property is located. There are different tools that allow one to determine the following key information:

• Real rental prices
• Time units spend in the market before being rented
• Current competition
• Demand
• Price per square foot

     5. Not having a strategy. As an investor, knowing the behavior of the local market or having a knowledgeable real estate consultant is essential. Would your pricing strategy be any different under the following circumstances?

• If you were competing against one property instead of ten?
• If the area was populated by families? Would it be easier to rent a one bedroom or a three bedroom property?
• If the area was populated by primarily single executives? Would it be easier to rent a one bedroom or a three bedroom property?
• If the properties spend 45 days on the market before they’re rented? What strategy could be used to accelerate this process?

     6. Not having a preventive maintenance plan. Most owners pay attention to their property only when there’s a problem. However, preventive maintenance is often cheaper than replacements that could have been avoided. It is advisable to have in place preventive maintenance plans for electrical equipment, air conditioning systems, and plumbing.

     7. Not having a well drafted contract. Your lease is supposed to protect you. It is very common to see investors put a huge amount of time and effort into purchasing a property and then try to save money buying an online contract template that will serve as a standard lease. It’s very important to remember that your lease is your main legal protection. The stipulations, rules, and regulations that support the agreement between lessor and lessee should be clear. We recommend hiring a lawyer who will help you protect your investment.

    8. Going through the process on your own. An essential part of this business is creating a team of experts in areas that can help you invest and manage your property. Each member must contribute and provide solutions within their field of expertise. The basic team incorporates the following:

• Real Estate Agent
• Property Manager
• Accountant
• Real Estate Lawyer

Ready to Buy or Sell in Miami’s Fastest-Growing Market?
Whether you’re searching for a luxury new development or looking to sell your property at the right moment, Jester Niño Real Estate offers strategic guidance, market insight, and personalized support to help you make your next move with confidence.

Jester Niño
Broker Associate
C5 | EXP Realty

The following are the most important elements that every investor/buyer should know regarding this type of contract:

1. They are Unilateral Contracts. The developer drafts the contract and sets all the rules. The purchaser isn’t entitled to make any changes. This is also known as a contract of adhesion.
2. Rescission Period. The buyer has fifteen (15) calendar days starting from the date the contract was signed to terminate it (without penalty for the rescission or annulment) and declare it null. As a buyer, this is a right you have under the law of the State of Florida.
3. The Contract Isn’t Transferable. The property cannot be sold, nor transferred to a third party before the final construction and the execution of the deed, unless you have the developer’s consent.
4. Timing of Payments. Most projects follow payment standards. These standards may be different in some developments.
   • 10% when signing the contract
   • 10% in the first 60 90 days after the first deposit
   • 10% at the start of construction
   • 20% when half of the construction of the building is completed (for example, the 30th floor, when the building has 60 floors)
   • 50% the day the property deed is executed (closing day)
5. No Financing Contingency. If the buyer requested a loan for the final payment of the project and it hasn’t been granted at closing, and the buyer doesn’t have the cash to close, the developer has the right to keep all the money that has already been delivered. In practice, however, the developer usually recommends different lenders to facilitate this process.
6. Breach of Contract. If the developer breaches the contract, he must notify the buyer(s) in writing and will have seven (7) days to deal with the infringement. The buyers have the right to claim their deposit, with interest, if the developer doesn’t comply.
7. Closing Costs. The costs to be paid when signing the property deed on behalf of the buyer will vary, depending on whether its a cash or financed transaction.
   • In cash: 3% to 4% of the purchase price, which includes:
     • 1.75% to 2% for the developer
     • Or two (2) months’ contribution to the condominium
     • Or documentary stamps on the transfer
     • Or the owner’s insurance policy
     • Or other transfer costs
   • Financed: Between 6% to 7% of the purchase price, which includes:
     • 1.75% to 2% for the developer
     • Or two (2) months’ contribution to the condominium
     • Or documentary stamps on the transfer
     • Or the owner’s insurance policy
     • Or registering and originating the mortgage
     • Or the lender’s commission
     • Or other transfer costs
8. Delivery Time. It may take from two to three years, if the purchase agreement is signed at the beginning of the project. Thedelivery time may be shorter, depending on the project’s stage at the time of purchase.
9. Finishing’s. It’s important to ensure delivery terms because they significantly influence the final investment. For example, the standard in south Florida is that projects are delivered “decorator ready,” meaning they’re delivered without floors and paint.
   • Equipped with appliances
   • Equipped with kitchen cabinets
   • Complete bathrooms with and without floors

Ready to Buy or Sell in Miami’s Fastest-Growing Market?

Whether you’re searching for a luxury new development or looking to sell your property at the right moment, Jester Niño Real Estate offers strategic guidance, market insight, and personalized support to help you make your next move with confidence.

Jester Niño
Broker Associate
C5 | EXP Realty