Front house view

Are you a resident of Central Florida (or considering moving to our beautiful state) and looking to buy your first home? For many, with today’s high interest rates and tight markets, the thought of buying a home may seem out of reach. However, with a variety of assistance programs, special loan options, and still-affordable locations, buying a home in Florida is still a possibility for many buyers.

Whether you’re a current resident of Citrus County or are looking for accessible Gulf Coast living, Citrus County is one of the last enclaves of affordability in the region, making it a great place for first time buyers to consider. In this post, we’ll give our best advice for buying your first home in Citrus County, from creating a realistic budget for your home search to securing funding to make your purchase possible.

Why Buy Your First Home in Citrus County?

While boasting many popular attractions, from manatee and dolphin habitat in Homosassa and Crystal River to gorgeous beaches and landscapes, Citrus County has a lower tourist draw than many surrounding counties. This creates a perfect scenario for first-time Florida homebuyers seeking entry into Gulf Coast markets—a beautiful, tropical setting paired with quieter communities and a lower cost of living.

Florida Living: From the coastal enclaves of Crystal River to the tributaries of the Homosassa River, Citrus County offers fantastic prospects for waterfront living. If you’re seeking an inland home enveloped by fields and woodlands, the scenic countryside near Inverness and Hernando could be just what you need. Whatever your dream for a personal slice of paradise, you’re certain to find the ideal property to suit your preferences in Citrus County.

More Bang for Your Buck: In Citrus County, the cost-effectiveness of homes surpasses the often more competitive real estate markets in other Gulf Coast communities. Whether you’re envisioning a tranquil, traditional neighborhood or a cozy condo community, there are options for every need and budget.

Proximity to Cities: Experience a tranquil lifestyle while conveniently accessing the amenities of Central Florida. Citrus County communities are situated within a short one to two-hour drive from the bustling city centers, attractions, and international airports of Tampa and Orlando.

How Much Can You Afford?

Before you start looking at homes, you’ll need to take the time to set a budget for your home—one that allows you to purchase a home that meets your needs, while also allowing you to maintain a comfortable living and financial stability.

  1. Understand your monthly budget.

First, add up all your regular monthly income (after tax), to have an accurate baseline.  Then, using credit card and bank statements, take a hard look at your current monthly expenditures. These include:

  • Current Rent
  • Groceries and household items
  • Utilities
  • Transportation Costs
  • Savings
  • Healthcare Costs
  • Discretionary Spending (Restaurants, entertainment, etc.)
  • Miscellaneous Expenses

This may be a good time to determine ways to minimize unnecessary spending—especially if you need to ramp up savings in advance of your home purchase. Ask yourself: Are your bank/investment account balances growing each month, or are you living paycheck-to-paycheck? Knowing the answer to this question can be key in determining an affordable monthly mortgage payment.

  1. Calculate an affordable monthly payment.

While your current rent may be a great starting point for determining a budget for your monthly mortgage payment, keep in mind that your new housing payment may need to be higher if you plan on upgrading your living conditions (for instance, with a larger home). The rule of thumb is to spend less than 30% on total housing expenses, but every financial situation is different. Scrutinizing how well your current spending fits into your current income can give you insights into how much you can afford to increase your monthly housing costs.

However, there are a few other things to consider.

Firstly, note that your mortgage payment doesn’t just include loan payments; it also includes an escrow payment, which covers property taxes and property insurance. It might also include mortgage insurance (if you don’t put 20% down on your home) and flood or special hurricane insurance. These additional costs can really add up, especially as home insurance rates in Florida are the highest in the country. And, though not often included in a mortgage payment, many communities in Citrus County also have HOA fees.

Additionally, remember that there may be additional costs associated with your new home that you don’t have now. For instance, if you size up with your home, utility costs will also follow suit. And if you need to supply new furnishings for a new space, make sure to set aside funds to avoid accumulating debt or eating up savings.

But how much house can you get for that affordable monthly payment? Much of that will also depend on your down payment size…

  1. Determine how much you can afford at closing.

Let’s start out by clarifying that there are definitely special loans and down payment assistance programs available (more on these later) that can lower your down payment, eliminating a major barrier for many first-time home buyers. However, generally speaking, the lower the down payment, the higher your monthly payment will be. Why is this?

  • Mortgages with down payments of less than 20% often require a monthly mortgage insurance fee, meaning your payment will be higher.
  • The lower the down payment, the higher your principal balance will be, resulting in a higher payment.
  • You may not qualify for the lowest interest rate, increasing your payment size.

Even if your loan doesn’t require it, put down as much as you can to lower your out-of-pocket monthly costs, as well as your overall loan payments.

In addition to your down payment, you’ll need to cover settlement fees at closing. The National Association of Realtors lists all the possible costs you may encounter. Generally speaking, budget for an additional 2-6% of your total loan amount in these fees. Use this closing cost calculator to see what you may expect to pay in Citrus County.

Overwhelmed by all these figures? A professional agent can help you sift through your options to find a good budget for your home search.


Citrus county provides a beautiful tropical setting and lower cost of living

Check Your Credit Score

Loan approvals aren’t just dependent on adequate income—having decent credit is essential.

For most loans, you’ll need at least a score of 620 to qualify, though your chances of approval increase based on your credit score. Additionally, the better your score, the lower your rate and the more you may get approved for. The lowest mortgage interest rates usually require a score of 740 or higher.

Is your credit score lower than 620? You may still have a chance, if you choose the right mortgage product.

Choose the Right Mortgage and Get Pre-Approved

You may be familiar with the conventional, fixed rate 30-year mortgage. These mortgages are underwritten by a lender, usually require 10-20% down payments (20% is preferred), and require good credit scores. However, there are many home loan products available, and depending on your financial circumstances, the location of the property, and today’s market rates, you may benefit from considering other options. These may include:

Variable or Adjustable-Rate Loans: These loans start out with a fixed interest rate, often lower than market rate, and then adjust up or down after this initial set period. A good choice if you plan on refinancing, selling before the initial rate period is up, or are facing exceptionally steep interest rates.

Fixed Rate Loans: Any mortgage loan where the interest rate is set for the life of the loan. Most desirable when mortgage rates are low.

FHA Loans: Popular among first time home buyers, these loans offer lower down payments (only 3.5% with a credit score above 580). Backed by the US Government, they have competitive interest rates, but do come with some additional fees.

VA Loans: For qualified veterans and their spouses, these loans offer no down payment requirement and affordable interest rates. They do have an additional origination fee and monthly fee.

USDA Loans: Available only for home purchases in designated rural areas, these loans require no down payment and offer low interest rates. The great news is that many homes in Citrus County are eligible for this valuable loan product.

There have been some recent mortgage changes that may affect first time homebuyers. To learn more about different loan products available to you, speak to your lender or an experienced local real estate agent.

Work with a professional agent

Get Preapproved or Prequalified

Once you’ve explored your loan options, checked your credit, and analyzed your budget, it’s time to get preapproved or prequalified for a loan. Real estate agents will want you to have a preapproval in place before making an offer, and many sellers won’t take your offer seriously without one. Our blog, Preapproval vs. Prequalification, explains the differences, as well as the process for getting them.

Investigate Florida Homebuyer Assistance Programs

Special loans can help first time homebuyers achieve their goals of purchasing a home—even when traditional loans may not be available to them. Beyond loan programs, there are also other resources available in Florida to help buyers fund their closing costs.

Florida Hometown Heroes:  First-time homebuyers being currently employed full-time by a qualifying Florida-based employer are eligible for a 0% interest loan for upfront costs (down payments and closing costs) of up to 5% (maximum $35,000) of the main mortgage loan amount. Visit our recent post for more information: Florida Hometown Heroes Makes Homeownership Dreams Reality.

Florida First Time Home Buyer Program: The Florida First Time Home Buyer Program (FTHB) connects eligible first-time homebuyers with 30-year, fixed-rate mortgage loans through participating lenders. Qualified borrowers can access additional programs like Florida Assist (FL Assist), offering a 0% interest, non-amortizing second mortgage of up to $10,000.

Florida Homeownership Loan Program: Another option is the Florida Homeownership Loan Program (FL HLP) Second Mortgage, a 3% fully-amortizing second mortgage with monthly payments.

HFA Preferred and HFA Advantage PLUS Second Mortgages: Additionally, the 3%, 4%, and 5% HFA Preferred and HFA Advantage PLUS Second Mortgages provide forgivable second mortgages for down payment and closing cost assistance, with forgiveness occurring over a 5-year term when used with specific first mortgage products.

Summertime Living—Year Round

Climate is a huge draw for many moving to Florida. With year-round warm weather paired with ample opportunities for outdoor living and activities, Florida is the perfect state for summer lovers. When you live in Florida, you can enjoy trips to the beach, hiking, boating, grilling, and lounging by the pool all year long.

To take full advantage of summertime living in Central Florida, many opt for waterfront homes, homes with pools, and even homes with outdoor kitchens. And options for these living opportunities still abound:

Build equity in a property

Be Open to Alternatives

You may have a specific city or house type in mind, but after investigating your options they might seem out of your reach. The answer isn’t to give up—it’s to simply widen your home search.

As we write in our post, Tips for Buying a Home When Inflation is High, exploring other neighborhoods “could help you check off more of your boxes—a bigger yard, more bathrooms, larger bedrooms—while potentially saving you money.”

You may also have to make concessions on the size or age of the property. Smaller homes (often called “starter homes”) may not be your dream home, but by building equity in a smaller property today, you can leverage it in the future when you are ready to sell it and move it.

We often advise against foreclosed and short sale homes for first-time homebuyers, as there are many potential pitfalls that you could face. However, a home that needs minor cosmetic upgrades could be the answer to getting you in your preferred neighborhood or finding a home that will accommodate your needs.

Ready to take the Plunge? Here are a few common financial mistakes to avoid:

Before you get started, here are a few final words of advice tailored for first time home buyers.

Until your home settles, it’s important to avoid the following to prevent your financing from falling through:

  • Switching jobs
  • Increasing your credit card debt
  • Signing or cosigning on any loans
  • Depleting your savings

If you take the time to understand your budget, you’ll be able to find a price point that truly works for you—not just one that your mortgage lender approves you for. Don’t buy a house whose payment doesn’t fit into your monthly budget or precludes you from maintaining a comfortable lifestyle.

Good things come to those who wait. Don’t make a rash decision, like bidding outside your comfort zone, that you might regret. Work with your realtor to make sound home buying decisions.

Work With a Citrus County Realtor

The home-buying process can be overwhelming for first time homebuyers, but a knowledgeable Citrus County real estate agent can help. From navigating home loan and buyer assistance programs to sifting through the variety of houses for sale in Citrus County to find one that meets your needs and budget, our agents will work hard to help you achieve your dreams of homeownership.

Our experienced agents know the area and all it has to offer, and can help you explore your options, craft a solid offer, and assist you through the due diligence and closing processes. View our listings of Citrus County homes for sale or contract a Citrus County realtor today to get started on your home buying journey.