Miami ranks near the top for financing cost of home purchases based on interest rate and home price costs | Real Estate

Thinking about financing a new home? Worried about what it might cost?

Naturally, interest rates have a significant impact on what the total price will be.

According to a new study from SmartAsset analysts, Miami-Dade County ranks as the seventh most-expensive area in Florida (No. 201 across the country) to finance.

In its example, the study used the median home value of $479,969 and added a 6.22% interest rate for a 30-year fixed-rate mortgage.

Total interest over those 30 years would amount to $464,330, bringing the total cost of that home to $944,299.

The methodology gave Miami-Dade a 17.64 rating in the “Most Expensive Index” category, far below the 37.68 rating by leader Monroe County. There, a median home value of $957,819 with a 6.64% interest rate would result in a total interest of $1,002,777, or $1,960,596 for the total cost of the property.

After Monroe County (ranked 17th nationally), the top five in Florida included Walton, Collier, St. Johns, and Nassau counties. Palm Beach ranked 10th.

Florida’s median home value is $326,286, according to SmartAsset, an online destination for consumer-focused financial information. At a 7.36% interest rate, the interest amount on a Florida home would add $342,646 over 30 years, bringing the total cost to $668,932.

SmartAsset accounted for three factors in its study: median home value, estimated interest rate, and down payment. The interest rate was derived by adjusting the Freddie Mac national average with the county’s average credit score and debt-to-income ratio. Calculations were based on 30-year fixed-rate mortgages with a 20% down payment and accordingly indexed.

Not surprisingly, the study found that places with the highest values were the most expensive places to finance a home.

The report also wanted to make Florida mortgage shoppers aware that FHA loan limits are different, ranging from the baseline of $472,030 to as high as $874,000 in Monroe County, which includes the Florida Keys. In Miami-Dade, the FHA limit is $557,750.

The standard-conforming (conventional) loan limit is $726,200.

In the past few years, Florida mortgage rates have been a bit higher than the U.S. average, according to SmartAsset.

By the way, filing a 30-year or 15-year mortgage can be a difficult choice. With a 15-year mortgage, one can be debt-free quicker and build up equity quicker, but the monthly costs will be much higher. The good news? You’ll likely save $100,000 or much more over the life of the loan.

The SmartAsset report also points out that in Florida, there is a transfer tax to prepare documents that transfer an interest in single-family real estate. Normally, it’s 70 cents per $100 of the money paid for the property. The one exception is Miami-Dade, where it is 60 cents on each $100. The seller usually covers those fees.

In Florida, there is also a mortgage tax of 35 cents for every $100 of the mortgage, known as the “documentary stamp tax.” The buyer usually pays for this.

Finally, there is some good news in Florida when it comes to financing, the report said.

By being a homeowner, the Florida Housing Mortgage Credit Certificate Program can provide a tax break. The program helps first-time home-buyers save money on their taxes by claiming up to 50% of their paid mortgage interest each year as a tax credit on their federal income tax return. The credit is capped at $2,000 per year, but all of the interest can be deducted using the mortgage interest tax reduction.

For a closer look at the most expensive counties in Florida, check out the table below: