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Thinking of buying a house in Melbourne, Florida?

Melbourne is one of the best places you could buy a home. Living here is a pleasure that doesn’t come at a price. According to Zillow, you could get a decent 1,100 square-foot condo for just $75,000 – there are even cheaper, albeit smaller condos – or a larger independent home for $200,000 or greater, as well as everything in between. If it isn’t a waterfront home, it will be close enough to the water – that is the advantage of Melbourne. This is why Melbourne has been nicknamed The Harbor City.
Tallahassee, Florida, USA downtown skyline.

You will find everything you need in Melbourne

There is more to Melbourne than the sun, sand and surf

Melbourne is a city that has its own international airport. Home to 78,490 residents (as of 2014), the climate is pleasant all year around. Temperatures range between 89 °F and 100 °F, and the average monthly rainfall is about 4 inches. You could play golf, go fishing, visit the zoo or immerse yourself in some modern-day culture in the Arts District. You could also take a boat to Manatee Cove, where you could paddle around in an Indian kayak and see the manatees up close and personal in their natural habitat. There are all sorts of elementary, middle and high schools in Melbourne, from public schools to Catholic institutions to private ones. The Eastern Florida State College has a campus in Melbourne, and the more famous Florida Institute of Technology (‘FloridaTech’) is located right in town, next to the airport.
Tallahassee, Florida, USA downtown skyline.
4th of July fireworks at Miami Beach, Florida.

Buy your home in Melbourne

It will prove to be the best investment decision you ever made!

This is something that requires a great deal of thought. Property prices in Melbourne are attractive (that $36,000 pre-foreclosure home can seem really tempting, but have you considered there might be other liens on it?), and you could get a 6,500 square-foot vacant lot for less than $10,000. Only Earnest can tell you the true cost of ownership, and whether or not it is the right one for you. Earnest also calculates the mortgage for you, so that you can figure out whether a property that you are interested in is affordable or not.
4th of July fireworks at Miami Beach, Florida.

Common Questions About Buying a Home in Melbourne

All The Answers You Need to Settle Down Sooner

Should I choose a fixed or adjustable rate?

It depends how long you expect to stay in the home. Adjustable rates are good for people who may not be in the home long, whereas fixed rates are ideal for people who are confident of settling in.

Do I need a home appraisal?

Probably—in most cases, the homebuyer must use an appraiser to evaluate the value of the home. Appraisal costs vary depending on the value of the property, as well as the state the house is in. Buyers cannot choose their own appraiser—the bank makes the decision.

What is PMI?

Private mortgage insurance (PMI) is required when a homebuyer makes a down payment of less than 20%, or when a borrower refinances with less than 20% equity in the home. PMI fees vary according to your down payment and credit score, and adds a premium to your monthly mortgage payment. Please note, PMI is tax-deductible in 2015 and 2016 for certain income brackets.

What does Loan-to-Value mean?

Loan-to-Value (LTV) is the percentage of your home’s value that your loan represents. When refinancing, the calculation is simply the loan amount divided by the appraised value. When buying a home, the LTV is found by dividing by either the purchase price or appraised amount, whichever is lower. When the LTV is less than 80%, the lender generally requires PMI.

For example:

Purchase price: $100,000
Down payment: $15,000
Loan amount: $85,000
Appraised value: $110,000
LTV: $85,000/$100,000 = 85%

What are closing costs?

Closing costs are standard fees associated with a real estate transaction. You will typically pay about 2-5% of the purchase price in closing costs—the exact amount depends on where you are buying (or refinancing), as well as number of extra fees involved in your particular transaction. Earnest charges no lender fees, so the borrower is only responsible for 3rd-party fees.

What should I consider before refinancing my mortgage?

Refinancing your home loan is an attractive option when rates are low. A simple rate and term refinance can help you lower your monthly payment and potentially eliminate your PMI premium, as long as you have built up enough equity in the home. You might also use a cash-out refinance to access some of the equity you’ve built up in the home (which may result in a higher monthly payment on your new loan).

However, keep in mind that refinancing a mortgage does involve several fees (closing costs). Before refinancing, you should calculate the ‘break-even’ point at which your refinanced loan makes up for the closing costs. If you plan to leave your home before this time, it’s better to stay with your current mortgage.

Knowledge Is (Buying) Power

Further Resources from the Earnest Blog

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The intelligent home loan

When it comes to finding the right home loan, Earnest works hard to ensure that the process pain-free. We use an industry-leading and intuitive online-only application (meaning most times no scanner or fax machine required), a 5-star client service team, and a unique rolling pre-approval that stays current while you track down that perfect home. At Earnest, the home loan process is like no other.