Are you dreaming of owning a vacation home in Florida? Well, brace yourself for some bad news. The Federal Housing Finance Agency has announced new upfront fees for second-house mortgages, making purchasing Florida investment properties or a second home more expensive. So, if you’re planning to buy a Florida second house, it’s a good idea to seek advice on how these fees will impact your purchase.
Based on the loan-to-value ratio, the new fee increases for Florida second-house mortgages will range between 1.125 percent and 3.875 percent. The FHFA says this is a step towards ensuring equitable and sustainable homeownership access for first-time and low- and moderate-income buyers and improving its regulatory capital position over time. These rates took effect on April 1.
Buying a Florida second house is generally considered a luxury purchase, and saving up for it has never been more critical than now. With the new fee increases, it will be more difficult for buyers who want to do an 80 percent (i.e., 20 percent down), 85 percent, or 90 percent purchase of a second home.
In summary, if you plan to buy a Florida vacation house or investment property, be aware of the new upfront fees for second-home loans. Seek advice to understand how these fees will impact your purchase. It’s also essential to save up for your Florida second house purchase, as the new fee increases will make it more challenging to get financing.