Today's mortgage and refinance rates in Florida
Buying a home in Florida
According to Zillow, the typical home value in Florida is about on par with the typical value of $259,906 across the US. The typical home value in Florida is $259,642, and Zillow expects the value to increase to $277,000 by September 2021.
First-time homebuyer programs in Florida
The Florida Housing Finance Corporation offers a few types of financial assistance:
- Down Payment Assistance Program: If you get a mortgage through a participating lender, you can borrow money from the FHFC for a down payment.
- Mortgage Credit Certificate Program: Claim up to 50% of your paid interest on your federal taxes each year.
- Salute Our Soldiers Military Loan Program: If you're an active-duty service member or veteran, you can get a discounted rate on a 30-year mortgage. The FHFC will also give you up to $10,000 for a down payment and closing costs.
Historic mortgage rates for Florida
By looking at the average mortgage rates in Florida since 2010, you can see trends for 30-year fixed mortgages, 15-year fixed mortgages, and 5/1 adjustable mortgages:
Seeing how today's rates compare to historic Florida mortgage rates may help you decide whether you'd be getting a good deal by getting a mortgage or refinancing now.
How 30-year fixed rates work
You'll pay a higher interest rate on a 30-year fixed mortgage than on a shorter-term fixed-rate mortgage. The 30-year fixed rates used to be higher than adjustable rates, but recently 30-year terms have been the better deal.
Monthly payments are relatively low for a 30-year term, because you're spreading payments out over a longer period of time than you would with a shorter term.
You'll ultimately pay more in interest with a 30-year term than you would for a 15-year mortgage, because a) the rate is higher, and b) you'll be paying interest for longer.
How 15-year fixed rates work
You'll pay less on a 15-year mortgage than on a 30-year loan, for two reasons: 15-year fixed rates are lower, and you'll pay off the mortgage in half the time.
Your monthly payments will be higher on a 15-year mortgage, though. You're paying off the same loan principal in a shorter amount of time, so you'll pay more each month.
How adjustable rates work
With an adjustable-rate loan, your rate stays the same for the first few years, then changes periodically. For example, your rate is locked in for the first five years on a 5/1 ARM, then your rate increases or decreases once per year.
ARM rates are at all-time lows right now, but a fixed-rate mortgage is still the better deal. The 30-year fixed rates are comparable to or lower than ARM rates. It could be in your best interest to lock in a low rate with a 30-year or 15-year fixed-rate mortgage rather than risk your rate increasing later with an ARM.
If you're considering an ARM, you should still ask your lender about what your individual rates would be if you chose a fixed-rate versus adjustable-rate mortgage.
Refinancing your mortgage in Florida
Because mortgage rates are at all-time lows, it might be a good idea to refinance into a lower rate.
You don't necessarily need to refinance with the same lender you used for your initial mortgage. A different company may offer you a better deal this time around. Find a lender that will offer the best rate based on your credit score and debt-to-income ratio, and one that charges relatively low fees.
How to get a low interest rate on your mortgage
Here are some tips for landing a good interest rate on your mortgage:
- Save for a down payment. With a conventional loan, you may be able to put down as little as 3%. But the higher your down payment, the lower your rate will likely be. Rates should stay low for a while, so you probably have time to save more.
- Increase your credit score. Many lenders require a minimum credit score of 620 to receive a mortgage. But the higher your score, the better your rate will be. To improve your credit score, be sure to pay all your bills on time. You can also pay down debts or let your credit age.
- Lower your debt-to-income ratio. Your DTI is the amount you pay toward debts each month, divided by your gross monthly income. Most lenders want to see a DTI of 36% or less, but an even lower DTI can result in a better rate. To improve your DTI, pay down debts or consider opportunities to increase your income.
- Choose a USDA or VA loan. If you're eligible, you might consider a USDA loan (for low-to-moderate income borrowers buying in a rural area) or a VA loan (for military members and veterans). These mortgages typically come with lower interest rates than conventional or FHA loans. As an added bonus, you won't need a down payment.
Improving your financial situation and choosing the right type of mortgage for your needs can help you get the best interest rate possible.
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