The urge to move to South Florida—with its promise of sunshine, beaches, and zero state income tax—is stronger than ever.
But in a housing market defined by high interest rates and tight inventory, many prospective buyers feel frozen. How can you buy a new home before you sell your old one, or lock in a manageable monthly payment without waiting for market rates to drop?
The answer lies in moving beyond the conventional 30-year mortgage and embracing creative financing. Here are four essential mortgage options buyers may consider right now if you want to move to South Florida.
1. The Low-Rate Jackpot: Assumable Mortgages
An assumable mortgage is a true game-changer, acting as a hidden low-rate jackpot in today’s environment. This option allows a buyer to take over the seller’s existing mortgage, inheriting the original loan’s remaining balance, repayment term, and, most importantly, its historically low interest rate.
This is currently only an option for properties financed with certain government-backed loans, primarily FHA, VA, or USDA loans. If you are looking to move to South Florida and find a seller who locked in a 3% or 4% rate a few years ago, this can mean massive savings compared to the current market average.
The Catch: You must qualify under the lender’s terms, and you will typically need to pay the seller the difference between the home’s sale price and the remaining loan balance. This “equity gap” often requires a lump sum payment or, in some cases, a second mortgage (a “piggyback” loan), which adds complexity. Still, the long-term savings on interest make the upfront hassle of finding and financing the equity gap worth it, especially for those determined to move to South Florida quickly and affordably.
2. Bridging the Gap: Bridge Loans
The classic real estate dilemma is timing: do you sell your current home and risk being homeless, or do you buy a new one and risk carrying two mortgages? A bridge loan provides a flexible solution, especially for buyers ready to move to South Florida but needing the equity from their existing property.
A bridge loan is a short-term loan, typically lasting between three and twelve months, secured by your current home. It “bridges” the financial gap between the purchase of your new residence and the sale of your old one. It provides the liquid cash you need for a down payment and closing costs on your new home without having to wait for your old home’s closing to fund.
While bridge loans are convenient, they come at a higher interest rate than standard mortgages and incur extra closing costs. They are best suited for sellers who are highly confident their current home will sell quickly, minimizing the duration of the high-rate, double-payment period. It’s an aggressive, yet effective, strategy to facilitate a smooth move to South Florida. This essay may provide you with more ideas
3. The Immediate Discount: Rate Buydowns
If you’re buying in a market where interest rates feel insurmountable, a rate buy-down offers immediate financial relief. This strategy involves paying an upfront fee—either by the buyer, the seller, or, most commonly, a home builder—to temporarily or permanently reduce the mortgage interest rate.
The most popular option is the temporary buy-down, such as a “2-1 buy-down.” This discounts the mortgage rate by 2% for the first year and 1% for the second year before it converts to the original fixed market rate in year three. This initial discount is a huge financial cushion, lowering monthly payments significantly while you settle in and adjust your budget after the move to South Florida.
Why it’s popular now: In the new construction market, builders frequently offer buydowns as incentives instead of lowering the listing price. When you move to South Florida and buy an existing home, sellers are increasingly open to offering concessions in the form of a temporary rate buydown to make their listing more attractive.
4. Becoming Your Own Bank: Seller Financing (Owner Financing)
For buyers who need flexibility, seller financing is a powerful, yet often overlooked, option when seeking to move to South Florida. In this scenario, the homeowner acts as the lender, and the buyer makes mortgage payments directly to them instead of a bank.
This approach is beneficial when the seller owns the property free and clear, or when the buyer struggles to meet strict traditional loan requirements. The terms—interest rate, down payment, and repayment schedule—are negotiated between the buyer and seller, offering far more flexibility than a standard bank mortgage. This flexibility is an advantage if you are looking to move to South Florida and require a non-traditional timeline or payment structure.
While most agreements include a balloon payment after a few years (meaning the buyer must refinance or pay the remaining balance in full), this arrangement buys the buyer crucial time for their credit score to improve or for market rates to drop, making it easier to qualify for a traditional mortgage later. If you want to move to South Florida and strike a unique deal, ask your agent about owner financing.
If your move to South Florida is a more urgent matter, get weekly eLetter where I write about All Things Delray Beach – it may be a good place to start.
Navigating the current real estate environment requires preparation and creativity. By exploring options like assumable mortgages, bridge loans, rate buy-downs, and seller financing, your dream to move to South Florida can become a reality sooner than you think. It’s time to get creative and find the financing that works for you!
