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It can be challenging as a landlord to stay up to date with every changing law regarding landlords and tenants. What can you ask in a rental application, what can you deduct from a security deposit, and what rights do you have when it comes to collecting rent?
To help make managing a rental property easier, we answered the most commonly asked questions about Florida landlord-tenant law.
1. What Questions Can Landlords Ask in a Florida Tenant Screening Background Check?
Landlords in Florida are allowed to check an applicant’s credit history, eviction history, and criminal history with their authorization. However, Florida landlords aren’t allowed to inquire about any of the seven protected classes (race, color, national origin, family status, religion, sex, disability) as outlined by the federal Fair Housing Act. As an alternative, they can ask applicants about the following traits and affiliations under certain conditions:
- Age: Landlords can ask about age when it comes to age-specific communities, such as senior housing.
- Religious organizations: Landlords can ask about religious organizations if the housing is run by said religious organization.
- Club affiliation: Landlords can inquire about one’s private club affiliation if the housing is run by said club and the club doesn’t discriminate against new member applicants.
Florida landlords can also legally deny an application if the applicant fails to meet the criteria — meaning that it’s legal for an applicant to be denied if they have an insufficient income, minimal job history, or unfavorable references from previous landlords.
2. How Much Can Landlords Charge For Security Deposits in Florida?
There’s no limit to the amount a Florida landlord can charge for a security deposit. That being said, every landlord should charge a reasonable amount for a deposit, which is usually between one to three months’ rent depending on if the rental is furnished or unfurnished.
Florida law does state that the landlords must give their tenants a written document detailing the bank account type and where the security deposit is being held within 30 days of receiving it.
3. What Can Be Deducted From a Security Deposit in Florida?
Landlords are allowed to deduct costs for damages that are beyond the normal wear and tear of living in a rental, as is the case in every state. This can include pet damages, neglecting the rental, unauthorized renovations, and more.
If deductions from the security deposit are necessary, the landlord will have to alert the tenant of such costs within 30 days of the rental move-out date. Tenants also have the right to respond to the notice and contest any deductions within 15 days of receiving the letter.
4. How Much Can a Landlord Raise Rent in Florida?
There’s no limit on how much a landlord can raise the rent on a Florida rental. When planning on increasing the rent price, landlords will need to provide tenants with an advanced written notice stating how much the price will increase by, when the new price will be effective, and how tenants can submit their rent payments. .
5. How Much Notice Does a Landlord Have to Give for a Rent Increase in Florida?
While there are no specifics on how much notice a Florida landlord needs to give their tenant with a fixed-term lease, a rent increase notice of at least 30 days is fairly standard for fixed-term leases. Florida landlords are also required to give their tenants at least 15 days of notice before the end of a month-to-month lease agreement.
6. What Is the Rent Grace Period in Florida?
Florida does not require a landlord to have a set grace period for rent collection in their lease, but it’s common to give tenants between five to seven days to pay before issuing a non-payment notice. Know that if you have a rent grace period for your rental, it should be written in the rental lease agreement.
If rent isn’t paid within the established grace period, a landlord must send a three-day notice explaining to the tenant that they have three days to either pay rent or move out. If the tenant doesn’t respond to this notice, eviction proceedings can begin after the third day.
7. When Can a Landlord Evict a Tenant in Florida?
Florida landlords are allowed to evict a tenant for issues like breaching their lease terms or failing to pay rent. If the tenant accidentally violated the lease and the issue can be rectified, then Florida law states that the landlord must issue a Seven-Day Notice to Cure, which gives said tenant seven days to fix the issue. If the issue is fixed, the tenant will be able to stay in the property. If it isn’t addressed in the seven-day timeframe, then the landlord is able to carry out eviction proceedings.
8. What Does Florida Landlord-Tenant Law Say About Breaking a Lease?
In a fixed lease, both the landlord and tenant can break the lease early if either party’s rights are infringed upon or if either party breaks an aspect of the lease (not paying rent, refusing to make repairs, etc.). For month-to-month lease agreements, a landlord must give their tenant 15 days’ notice if they want to terminate the lease without legal cause.
There is no legal need for a move-out notice for the end of a lease term unless the lease requires it of the landlord.
9. What Are Tenant Rights in Florida?
There are laws for both landlords and tenants to ensure both parties are protected during the lease term. Here are four main tenant rights set in place that Florida landlords should be aware of:
- Right to a private, peaceful possession of the dwelling: Tenants shouldn’t be bothered by their landlord without warning, though landlords are able to address repairs and conduct inspections with reasonable notice of entry.
- Security deposit rights: If a tenant proves that deductions made from a security deposit are unnecessary, said tenant may receive the security deposit in full and in some cases gain interest as well.
- Withholding rent: Tenants have the right to withhold rent if their landlord is not upholding their duties as written in the lease agreement, such as not maintaining a safe and habitable space. The tenant must give the landlord seven days’ notice of the problem, and if it continues, the tenant has the right to terminate the lease early and move.
- No written lease: If there’s no written lease agreement, the tenant has the right to move out for no reason at all as long as they give written notice of their intent to leave.
Research Florida Landlord-Tenant Law With Avail
While there’s a lot to know about Florida landlord-tenant laws, Avail makes it easier to manage your rental properties without the help of a property manager. With an Avail account, you can access lawyer-reviewed lease agreements that can be easily customizable and abide by Florida landlord-tenant laws. You can also stay up to date with changing rental laws through our Florida landlord-tenant law page so you can ensure that your rental business is up to code.
Create an account today or log in to see how you can streamline your tenant screening process, rental applications, lease agreements, rent collection, and more with Avail.
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The rental application stage is one of the most important steps in the rental process, which is why every landlord should be aware of their state’s rental application laws.
Here’s what you need to know about the laws surrounding Florida rental applications so you can create the best, most comprehensive rental application for your rentals in the sunshine state.
What to Include in a Florida Rental Application
A Florida rental application can help you gain in-depth insights into prospective tenants interested in renting out your property. As a general rule, it’s recommended to include the following sections.
- Applicant information: You will want to get the applicant’s phone number, email address, current residential address, driver’s license number, Social Security Number, etc.
- Proof of income: You will need to ask for a proof of income, which can be requested in the form of a paycheck, W-2, or bank information.
- Employment history: Get current and past employer contact information to better understand who the tenant is and how reliable they are. This is also a great way to verify an applicant’s income.
- References: It’s always smart to ask your applicants for previous landlord references so you will have an idea of who you will be renting to. You can also ask for an employer reference, a credit reference, or personal references.
- Conduct a background check: The tenant screening aspect of the application will include a credit, eviction history, and criminal history check. You will need to have space in the application for the tenant to give written consent to conduct a credit check before you actually conduct this report.
- Co-signer application: If the prospective tenant needs to add a co-signer to their lease, you will also want said co-signer to fill out a rental application so you can ensure that they will be a responsible party for rent if need be.
What Makes Florida Rental Applications Unique?
If an applicant is an active service member, the landlord must respond to the application within seven days. Failing to respond within this timeframe in Florida will result in the landlord having to accept the tenant no matter what.
What Are Florida Rental Application Fee Laws?
While Florida does not limit the amount a landlord can charge in rental application fees, it’s advised to stay within the normal price range to avoid deterring tenants from applying. Landlords must also keep collected rental application fees in a separate account from other rental charges collected, such as rent and security deposits.
For more information on landlord-tenant laws, visit our official Florida legal page.
Are Application Fees Refundable in Florida?
Landlords with Florida rental properties are not required to refund any rental application fees to prospective tenants for any reason.
What Landlords Can’t Ask on a Florida Rental Application
All federal Fair Housing laws protect Florida applicants and tenants from housing discrimination based on race, sex, national origin, familial status, religion, color, and disability.
However, landlords can inquire about the following aspects of a Florida rental application, including:
- Age: Landlords can ask about age when it comes to age-specific communities, such as senior housing.
- Religious organizations: Landlords can ask about religious organizations if the housing is run by said religious organization.
- Club affiliation: Landlords can inquire about one’s private club affiliation if the housing is run by said club and the club doesn’t discriminate against new member applicants.
Are There Florida Laws on Tenant Background Checks?
In terms of tenant background check laws in Florida, landlords must have tenant consent in writing to check their credit history during the screening process, as dictated by the Federal Credit Reporting Act (FCRA). That being said, landlords don’t need to ask for permission to look into a tenant’s eviction or criminal history.
Create Your Florida Rental Application With Avail
Creating a Florida rental application is crucial to finding a new tenant for your rental and will ensure that your application and screening process is legal, detailed, and provides you with everything you need to know about a prospective tenant.
Find your next tenant with Avail tenant screening services, which allows you to request rental applications and relevant screening reports. In addition to a rental application, you can add relevant screening reports such as background checks, TransUnion credit reports, and eviction checks for a one-time fee that the landlord or applicant can cover. Create an account today to get started.
Learn more about local Florida landlord-tenant laws by exploring our directory about specific rental regulations, requirements, and restrictions specific to the state.
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The Center for Disease Control (CDC) just instated its third extension to the nationwide eviction moratorium, working to protect roughly 11 million Americans who are behind on rent due to the COVID-19 pandemic.
Here’s everything you need to know about what the CDC eviction moratorium extension is, who is protected, and how to get access to federal rental assistance aid for help.
What Is the CDC Eviction Moratorium Extension?
Where Does the Eviction Moratorium Extension Apply?
Who Does the Extension Protect?
What Evictions Are Allowed During the Moratorium?
What Are the Penalties for Landlords Who Ignore the Moratorium?
What About Evictions Started Between August 1st and 3rd?
Learn More About the Emergency Rental Assistance Program
What Is the CDC Eviction Moratorium Extension?
This temporary eviction moratorium extension by the CDC prevents any evictions because of missed rent payments from occurring due to the financial hardships renters are facing during the pandemic.
The extension will last until October 3, 2021. During that time, there can be no evictions because a renter is unable to pay rent, pay their late rent fees, penalties, or interest, so long as said renter meets the eviction protection requirements.
The reason for extending the moratorium is, in part, to give more landlords and renters time to apply for and access federal Emergency Rental Assistance program funds set aside to assist renters in paying their monthly rent and utility bills.
Where Does the Eviction Moratorium Extension Apply?
According to the CDC order, the extension is meant to “temporarily halt evictions in the hardest-hit areas.” In line with this, the moratorium will only be effective in counties with a “substantial” or “high” level of COVID-19 transmission as determined by the CDC. According to the agency, a substantial transmission rate is more than 50 new COVID-19 cases per 100,000 people in the past seven days. A high transmission rate is more than 100 new cases per 100,000 people in the past seven days. This is currently 80% of counties across the U.S.
The moratorium will be lifted from individual counties after their transmission levels are below a “substantial” rating by the CDC for 14 consecutive days. If there is another increase in cases in said county, the order will be reinstated.
This eviction moratorium extension is not applicable in areas with the same or greater levels of COVID-19 eviction protections, nor does it prevent local and state governments from instating more eviction protections.
Who Does the Extension Protect?
Currently, this moratorium protects roughly 90% of renters in the U.S. Those who are considered “covered” renters will need to provide their landlords with a signed declaration stating their qualification for eviction protection.
- A renter is considered covered by the extension if they are an individual who: 1. Earned less than $99,000 (or $198,000 if filed jointly) in 2020 or expect to make that amount in 2021, or an individual who was not required to provide an income to the IRS in 2020 or received a stimulus check during the pandemic.
- Is unable to pay their full monthly rent because of a loss of employment, of income, or a decrease in income due to the pandemic, or if they are facing extraordinary expenses that need to be paid.
- Are continuing to make partial rent payments despite financial hardships.
- Would be homeless or would have to move into close living conditions (move in with family, friends, to a shelter or other housing situation) if they were to be evicted.
- Resides in a county with a “substantial 9” or “high 10” COVID-19 transmission rating by the CDC.
What Evictions Are Allowed During the Moratorium?
Landlords can still evict tenants during the moratorium period, so long as said evictions are not because of a failure to pay rent. Evictions that are allowed during this moratorium include those that involve:
- Criminal activity on the rental property.
- Threatening the health and safety of other residents.
- The damaging of the property.
- Violating any building codes or health and safety regulations.
- Violating any lease obligations other than making timely rent payments or other similar housing payment obligations.
What Are the Penalties for Landlords Who Ignore the Moratorium?
The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) are monitoring evictions and will enforce the moratorium where necessary. For landlords caught violating the eviction moratorium, there will be a penalty of up to $100,000, one year in prison, or both. If the eviction results in the renter’s death, the fee will increase up to $250,000, a year in prison, or both.
Housing organizations or companies caught violating the moratorium will be charged a fine of up to $200,000 per violation and $500,000 if the violation resulted in the death of the renter.
What About Evictions Started Between August 1st and 3rd?
Because there was a multi-day break between the end of the last CDC eviction moratorium and this current eviction moratorium, any eviction filings that were initiated between August 1 and 3 of 2021 are covered by the new extension. However, the current moratorium will not protect those eviction filings that were finalized during that same time period.
Learn More About the Emergency Rental Assistance Program
The best way to lessen your financial hardships as a renter or landlord is to apply for your local COVID-19 Emergency Rental Assistance Program. Made up of $46 billion in federal aid funding, these ERA program distributors — such as the Local Rental Owners Collaborative (LROC) in Southern Los Angeles — are designed to help eligible renters pay their monthly rent and utility bills for up to 12 months. Learn more about ERA funding, eligibility requirements, and how it can help you in our latest FAQs article.
For more information and updates regarding the pandemic’s effect on independent landlords and their renters, sign up for our monthly landlord newsletter below. We offer coronavirus-specific updates and resources for landlords, data from our survey findings, and details of our work with Urban Institute and other like-minded organizations that are looking at a variety of issues the rental industry is facing.
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Becoming a landlord is an exciting — and overwhelming — undertaking. You’ll learn more about investing in properties, building out your business as a landlord, and how to handle the everyday work that is often referred to as “landlording.”
But what do you actually need to know about becoming a landlord and renting out your first property? Here’s what to know before renting out a house for the first time.
How to Rent Out a House for the First Time
The first step to renting out a house is establishing processes that make renting easier for both you and future tenants. Do you prefer to use the old system of pen-and-paper landlording, want to hire a property manager, or want to become a do-it-yourself landlord with the help of a property management platform?
However you choose to run your rentals, it’s important to determine how you’ll handle your new rental business to avoid issues in the future. Once you have that in place, you can start doing the work to rent out your property.
1. Research Local Landlord-Tenant Laws
As a landlord, you will need to know the local, state, and federal landlord-tenant laws that pertain to rental properties, landlords, and tenants.
The Fair Housing Act of 1968 is an example of federal protections for tenants, dictating that landlords cannot discriminate against prospective applicants because of their race, color, religion, family status, sex, or disability. Individual states and local governments expand on these protections as well, which is why you will need to ensure that your rental applications, tenant screening process, and lease agreements all comply with these laws.
2. Determine a Competitive Rent Price
This can be the trickiest step for new landlords, as you don’t want to underprice or overprice your rental. The monthly rent price you set will need to be competitive enough to bring in tenants, while not being so expensive that you’re left with vacancies.
You can find the right rent price with an Avail Rent Price Analysis report. This six-page report takes into account the type of rental you own and a few specifics about the property, then compare it with rent price data collected from past and current rentals that are on the market in your area, allowing you to set a competitive rent price with confidence.
3. Advertise Your Property With a Rental Listing
The goal of every landlord is to make sure their online rental listing is seen by as many potential tenants as possible. While it’s understandable that a disorganized listing can lead to long-term vacancies, so can only posting your property to one or two listing sites. But posting a listing to 10 different sites can become a time-consuming process, especially if you own more than one property.
With Avail, you can create a rental listing that automatically syndicates to a dozen property listing sites, saving you valuable time and money. Simply create one listing complete with images of the property, a brief description, and your rent price, and Avail will share it with sites like Zumper, Realtor.com®, Trulia, Apartments.com, and more.
Learn more about posting your rental listing with Avail.
4. Thoroughly Screen Every Prospective Tenant
When assessing prospective tenants, you’ll want to pay attention to each applicant’s tenant screening report, which includes information on their credit, eviction, and criminal history. Part of this process also includes reaching out to past landlords as references to learn more about the applicant from a landlord’s perspective.
This process can take some time and a decent amount of money, which is why Avail set out to make the screening process easier. You can bundle all three background checks (credit, eviction, and criminal) for a one-time fee per application, and decide whether the landlord or the applicant pays. Once the checks are authorized and complete, you can log into your account to see clear evaluations of each applicant’s financial and housing history.
Plus, Avail will automatically contact an applicant’s prior landlords for a referral request, taking up less of your time and theirs.
Pro tip: Research your area’s state and local laws before creating your rental application and screening any applicants so you don’t violate landlord-tenant legislation.
5. Process Rental Applications Quickly
Processing rental applications in a timely manner can be tricky, especially if you’re using paper applications or receiving multiple applications at the same time. But carefully choosing a tenant based on their application and tenant screening results is one of the most important aspects of your work as a landlord.
With Avail, you can easily find your next tenant by using digital rental applications that can be shared and processed in no time, letting you quickly fill vacancies. Avail also lets landlords create customized rental applications with Unlimited Plus, easily access all information on an applicant in your dashboard, and even compare various applicants side-by-side.
6. Use a Lawyer-Approved Lease Agreement to Protect Your Property
As every landlord knows, your rental lease agreement is the backbone of your rental property. It will address all requirements, rules, and disclosures attached to your rental property, while also laying out the rental expectations that you and your tenant are legally bound to.
But it’s essential to make sure that your lease agreement isn’t violating any local, state, or federal rental laws. The best way to go about this is to get your lease reviewed or written by a lawyer, but this can take time and cost hundreds of dollars.
Avail gives landlords across the U.S. free access to state-specific lease agreements that are individually screened and approved by accredited lawyers, helping you feel confident in your lease. You can sign the leases online for free or upload your own ready-to-sign document to collect e-signatures from tenants. Once the lease agreement has been signed by all parties, it will be stored in each person’s respective dashboard for future reference.
7. Implement a Maintenance Tracking System
So, you have your lease agreement signed and a great tenant in your rental — what’s next? You’ll need to stay on top of any maintenance issues with your property to prevent further damages from occurring while keeping a habitable space that your tenants are legally entitled to. But this can get overwhelming very quickly, especially if you have multiple rental properties.
You can manually log maintenance requests yourself or use a tool like Avail to streamline the process for you. Tenants can easily communicate with you about maintenance requests through photos and descriptions of the issue they’re experiencing, right from their Avail accounts. You can easily keep track of all maintenance requests and expenses.
8. Collect Rent Quickly and Securely
It’s important to make sure that you have a quick and secure way to collect rent online. While it can be tempting to continue the old paper method of processing rent checks, using rent collection apps makes it easier for tenants to pay rent online and track your rental income.
With Avail, you can easily schedule upcoming payments, set automated rent reminders, and set up late fees. Tenants can also benefit from paying rent with Avail — they can report on-time rent payments to TransUnion with CreditBoost for $3.95/per reported month and use Autopay to have the funds automatically withdrawn from their account each month. Payments collected through Avail will also populate the rental property accounting dashboard with information on the payer, the total amount, the date, and the type of transaction.
9. Protect Yourself With Landlord Insurance
A great way to protect yourself as a landlord is by investing in landlord insurance. This type of coverage is specifically intended for landlords renting out their house, condo, or apartment. There are different types of coverage to consider, but each plan generally protects against property damage, loss of income, and liability.
Manage Your Rentals With Avail
Renting out a house may seem daunting, but it is easy to do with the right rental property management tools. That’s why Avail works to make the daily tasks of landlords that much easier, organized, and accurate, and why we have more than 250,000 landlords who choose our property management platform over any other.
Create a free Avail account or log in today to launch your rental business with confidence. Find more landlord hacks, resources, and guides for landlords on our Resources page.
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As a renter, it’s important to know how to fill out a rental application so you can easily secure your next place. If you take the time to properly fill out an application and are able to pass a credit and background check, then you will likely be approved. However, a rushed application, or one that’s inaccurate, will probably be denied.
We answered all of your questions about rental applications, including what information you’ll need to provide and why you’ll need to provide it so you can be confident when applying for your next place.
- How to Fill Out a Rental Application
- What Is a Credit Reference on a Rental Application?
- Why Do Rental Applications Ask for a Bank Account Number?
- Should I Put My Social Security Number on a Rental Application?
- Who Can Be a Co-Signer For Renting an Apartment?
- How to Make the Rental Application Process Easier With Avail
How to Fill Out A Rental Application
Properly filling out a rental application is essential to securing the rental property you want. Failing to include the requested information or putting false information can result in your application being denied. To help you get approved for your next place, here’s how to fill out a rental application in six steps.
1. Your Contact Information
In order for the landlord to get in contact with you about the rental property, you’ll need to provide your email address and phone number. In some cases, a landlord might also ask you to list an emergency contact — usually a family member or close friend — so you’ll need to provide their name, email, and phone number, as well.
2. Your Social Security Number
Although this step may raise some concern, providing your social security number is a standard part of the application process since it’s needed to conduct an in-depth credit and background check. While some landlords still request a renter’s social security number on the application form, platforms like Avail allow a renter to securely input their own social security number so it’s never written on paper or provided to a landlord.
3. Driver’s License or State Identification
You will also need to provide some form of identification, such as a driver’s license or state identification card, to prove your identity. This can often be attached to a digital rental application or sent in an email with the attached application. If you’re filling the form out in person, then the landlord or rental property manager will likely ask to make a copy of your identification for proof.
4. Current and Past Rental Information
To better understand who you are as a renter, the landlord will request information on your current and past rental history. When reaching out to previous landlords, they’ll inquire on whether or not you’ve been evicted, if you paid rent on time, and if there was any major damage caused to the property. You can include past landlords as voluntary references in the application, as well.
5. Employment Information and Proof of Income
Employment information is used in the rental application process so a landlord can verify that you have stable employment to pay rent. You will likely be asked for the names, email addresses, phone numbers, and work addresses of your current and former supervisors so your landlord can verify your employment history and confirm you’re currently employed where you say you are. Companies vary on how much information they share on current or past employees, and most will only disclose employment status and dates of employment.
Proof of income will also need to be provided to ensure you make at least three times the monthly rent, which is a benchmark for many landlords. This can come in the form of a check, pay stubs, tax return, or offer letter if you haven’t started a new job yet.
6. Personal References
You might be asked to include any other landlord, work, or personal references that you can provide to show that you’re a trustworthy and reliable person. Similar to a new job’s verification process, the landlord will most likely ask questions about your reliability, how you treat others, and general information they should consider. Normally two to four references are enough.
Avail makes it easier to send your renter information to multiple landlords without fees. Simply create a Renter Profile, fill out your rental application information, and start sharing.
Other Possible Rental Application Requirements
There may be instances where you’ll need to provide additional information to the landlord, like if you require a co-signer or have pets. A renter and their co-signer will need to fill out separate applications to provide the landlord or property management company with a full picture of both parties’ income and rental history.
If you’re applying for an apartment with pets, you’ll most likely need to provide a pet resume with their vaccination records, pet insurance, proof they’ve been registered in the city, as well as pet deposits and pet rent.
If you have a car and are renting out a parking space with your rental, you may also need to provide vehicle information such as your license plate number, model of the car and year it was made, and even car insurance information.
What Is a Credit Reference on a Rental Application?
A credit reference includes documentation that describes your credit health and history to lenders or landlords and helps prove your creditworthiness and reliability when it comes to making your monthly rent payments.
Credit references are meant to give landlords an idea if you will be able to reliably make your rent payments on time. These can come in the form of a credit report (the most popular), asset documentation, financier support, or a character reference.
Why Do Rental Applications Ask for a Bank Account Number?
Landlords use your bank account number to check if you 1) have a bank account to begin with and 2) that you make enough money to pay for rent by reaching out to the bank for confirmation of funds. A bank account number can be provided instead of a W-2 form or pay stubs.
If you’re wary of providing your bank account number, know that a landlord can’t do anything to the actual account with just the account number. This is the same number that is on the bottom of your personal checks, so it’s fairly safe to provide others in the right context.
Should I Put My Social Security Number on a Rental Application?
This measure is strictly to confirm your identity and conduct necessary background checks, but that doesn’t mean it can’t be scary to give out your identification information. While landlords are legally able to ask for an applicant’s social security number, you’re still able to inquire into the landlord’s or property manager’s privacy policies to see how your number will be used, who will have access to it, and how it will be kept secure.
Who Can Be a Co-Signer For Renting an Apartment?
If you don’t have a stable income, one that isn’t enough for rent, or a poor credit history, you will likely have to add a co-signer to the lease. But who can be a co-signer?
In general, a co-signer is someone who can provide a good credit history and a steady and reliable income that can cover the rent. This person is usually someone who you trust and trusts you, as they will be taking on the financial burden of the lease if you’re not able to pay the rent.
How to Fill Out a Co-Signer Rental Application When Retired
You can have a retired co-signer on your rental lease. In general, the age limit for co-signing a lease or loan is 75, but as long as the co-signer has the funds to cover rent, many landlords won’t be too concerned if they are retired or not.
Retired co-signers can prove their income or that they have the money to cover rent through retirement funds, pension benefits, or other account statements instead of a W-2. Renters can also offer to pay additional months of rent upfront, or if need be, offer to add another co-signer to the lease.
Make the Rental Application Process Easier With Avail
Knowing how to appropriately fill out a rental application is the first step to getting approved for your next home. With Avail, renters can easily fill out a rental application online and quickly share their rental information with a landlord to speed up the rental application process.
Learn more about how renters can save money on application fees with a Renter Profile and what landlords look for in a tenant’s rental history.
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While it’s common for tenants to worry about how long it takes to process a rental application, the rental application process time is important to landlords, too. Being able to quickly create, share, and process a rental application can reduce vacancy periods, save money, and streamline the tenant screening process.
Here’s everything you need to know about processing rental applications, from how long it takes for a rental application to be approved to the rental application process time.
How Long Does It Take for a Rental Application to be Approved?
An online rental application can take anywhere from a few hours to a few days to complete, process, and approve. The process can be shorter or longer based on the questions asked, the individual landlord or property manager, and the type of rental application used.
To reduce the amount of time it takes to approve an application, landlords can create an online rental application that’s easy to share and review, and can ask prospective tenants to make sure they carefully fill out the entire application and check for any errors that could cause a delay.
The Rental Application Process Time
Standard paper applications take the longest to process since they need to be physically passed between the landlord and prospective tenant. Online rental applications speed up the entire process since they are shared digitally, and can be completed and approved in as quickly as a few hours.
Here are the basic components of a rental application and how long each step will take to complete.
- Filling out the rental application: A rental application can take a tenant anywhere from under an hour to a few hours to complete. The overall completion time depends on the questions asked, requested information, and if they have a co-signer who also needs to complete their own rental application.
- Approve proof of income: To verify a tenant’s income, you’ll need to look over bank statements, W2s, an offer letter, or a paystub — whichever is provided by the applicant. If they don’t provide any proof of income or you want to double-check the validity of their monthly income, you may need to reach out to their employer, which can prolong the process.
- Conduct a credit and background check: This process will only take a few hours (or less) in total, depending on what service you use to conduct the credit and background checks and how quickly the tenant can authorize the credit and background check. Avail returns the requested credit and background reports as soon as they are authorized by the tenant, but depending on what service a landlord uses, processing time can vary. Keep in mind that if there is a co-signer involved, you may need to check their credit and background as well, which can add an additional step to the rental application process.
- Talk to past landlord and employer references: If you asked for landlord or employment references, then you will need to take the time to contact them or leverage a property management software platform to do it for you. When tenants complete an Avail background check, our system automatically emails previous their landlords to answer several questions about the tenant’s renting history, saving you time.
Take advantage of automatic landlord reference requests with Avail.
How Long Does a Background Check Take for an Apartment?
Overall, a background check only takes a few hours to process (or less, depending on the service used), making it a very small portion of the actual rental application process time. Background checks often look at an applicant’s credit report, rental history, current and previous employment, and criminal history going back anywhere from seven to 10 years.
Know that there are also protections preventing landlords from discriminating against applicants with a criminal record, which is why it’s important to stay informed on your rental’s local and state laws before crafting your rental application.
Is It Hard to Get Approved for an Apartment?
While it’s not necessarily difficult to be approved for an apartment, there are a few reasons why a tenant’s application could be denied. Here are the main five reasons a tenant’s application could have been rejected:
1. Inconsistent Income
If an applicant’s gross monthly income (or what they make before taxes) isn’t enough to cover rent and they don’t have a co-signer, this could be a dealbreaker for some landlords. The same goes for an inconsistent income or employment history, or no income at all.
2. Little-to-No Credit Established
Landlords look at a tenant’s credit score to determine their ability to make on-time payments and understand their financial habits. When a tenant has a credit score below 620 or no credit established, this can usually result in an application being denied. It could also be that the applicant has an unreliable credit history or no credit, in which case you may want to recommend that they bring a co-signer onto the lease.
3. Issue With Their Background Check
You might find after conducting a background check that an applicant has prior evictions or outstanding debts — both of which could impede their ability to pay rent on time. You might also find that the applicant has past criminal offenses, in which case you must distinguish as a landlord between misdemeanors such as traffic violations and more serious crimes that could affect the well-being of other tenants.
4. They Have a Pet
If the applicant has a pet and applied to a rental property that does not allow pets or only allows certain types, then this could be another reason why the application could be denied. However, landlords are not allowed to deny the pet if it’s a service animal and the tenant has provided the proper documentation for verification purposes.
5. Incomplete or Inaccurate Rental Application
If the application is incomplete upon submission or the provided information is inaccurate, then the rental application will likely be denied. Stressing to your applicants that the rental application process time will be extended if their rental application is inaccurate or incomplete will likely help remedy this issue.
Simplify the Rental Application Process With Avail
Avail makes screening tenants easier and faster than ever with online rental applications. Landlords can easily send a digital rental application to any interested tenant to quickly complete and return, plus request a credit and background report that will be instantly available to the landlord after the tenant authorizes it — all significantly cutting down the rental application process time and making it easier to apply for an apartment.
Create an account or log in today to get started.
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Renters and independent landlords across the country are still suffering from unpaid or unstable rent payments caused by the COVID-19 pandemic. But there is financial help in the form of the Emergency Rental Assistance (ERA) program, which provides eligible landlords and renters with up to a year’s worth of rental assistance funds through state and local programming.
We answered the most frequently asked questions about the ERA program so you can get the rental help you need as soon as possible.
- How Does Rental Assistance Work?
- Who Is Eligible for Federal Rental Assistance?
- Where Do I Apply for Rental Assistance?
- How Do I Apply For Aid?
- How Much Aid Can I Get?
- How Will I Receive the Rental Assistance Payments?
- Do I Need to Work With My Tenant/Landlord to Apply?
- Do I Need to Have a Signed Lease to Apply for ERA Funding?
- What Else Do ERA Funds Cover?
- What Type of Housing Is Eligible for ERA Funds?
- Can ERA Funds Pay for a Hotel or Motel Room?
- What If I’m Part of a Rent-to-Own Lease?
- What if I’m a Tribal Member Living Outside of Tribal Lands or a Non-Tribal Person Living on Tribal Lands?
- What if I’m Already in Subsidized Housing?
How Does Rental Assistance Work?
State and local agencies are taking applications from landlords and renters in their communities to get funding from the U.S. Department of Treasury’s Emergency Rental Assistance (ERA) program, which set aside $46.55 billion in aid.
These funds are meant to assist tenants in paying their rent, utilities, and other housing expenses, as well as landlords who are struggling to make ends meet due to a lack of steady rental income.
Who Is Eligible for Federal Rental Assistance?
Renters must identify with all three criteria below to be eligible for assistance. Landlords must have a renter who fits all three of the following criteria to apply as well.
- At least one member of the household a) qualifies for unemployment, b) is suffering from lost income due to the pandemic, c) still has to pay for large expenses, or c) is dealing with other financial hardships.
- The household income is below the Average Median Income (AMI) of their area. In general, this is a household making up to 80% of the AMI, with local funding efforts prioritizing those making less than 50% of the AMI.
- At least one member of the household is experiencing housing insecurity such as facing homelessness or having issues with finding a place to live.
Applicants will need to prove that they are eligible for ERA funds by providing photos, copies, emails, or written statements from their employers, landlords, caseworkers, or any other professional who is aware of their current housing and income situation. They will also need to provide proof of income or unemployment.
Where Do I Apply for Rental Assistance?
ERA funds are being funneled from a federal level to state and local agencies and programs that are determining eligibility for the assistance and taking individual applications.
Find your local ERA program through the U.S. Department of Treasury’s official ERA Program Finder or through The National Low Income Housing Coalition rent relief database.
You can also call 2-1-1 or your local housing authority for more information on local assistance programs available.
How Do I Apply For Aid?
Applicants will need to apply for ERA funds through their local or state-level program. While general eligibility remains the same across all programs, the program’s specific policies and procedures are individualized to accommodate the needs of their communities.
Find more information through the websites and phone numbers above to get specific information on what you will need to provide in terms of the ERA application and documentation for your area’s specific program.
How Much Aid Can I Get?
Eligible households are able to receive up to 12 months of financial assistance with rent. Funds can also be used to pay for past-due rent, so long as the missed rent occurred after March 13, 2020, when the country declared a state of emergency.
These funds will go towards past-due rent first (if any is owed) before helping with current and future rent payments. Money will be made available for future rent payments up to three months at a time. Remember, every program is different and may have different regulations for how applicants can access their ERA funding.
How Will I Receive the Rental Assistance Payments?
This all depends on your local program that’s distributing the rental assistance funds to every recipient. In some cases, it can be sent directly to your landlord or building company. In other cases, it might come as a check to the applicant themselves.
If these funds are being used to pay for utilities, the program might send the money to the company directly or pay for it through the applicant.
Do I Need to Work With My Tenant/Landlord to Apply?
There are varying local and state program requirements regarding who (tenants or landlords) can apply for ERA funding. Generally, a landlord is able to apply for rental assistance on behalf of their tenants. That being said, there are cases where the tenant must be the one to apply.
Creating an open dialogue with your tenant or landlord can help move the application along and give both parties the financial relief they need.
Do I Need to Have a Signed Lease to Apply for ERA Funding?
You do not, though this might change depending on the local or state ERA program you’re working with. In order to remain flexible with applicants, you do not need to present a signed lease agreement to apply for rental assistance aid.
That being said, you will still need to fit the eligibility requirements outlined above.
What Else Do ERA Funds Cover?
If you do not need assistance with paying rent, ERA funds can also be used to cover your future and past utility bills, so long as the past-due payments were accrued after March 13, 2020. Covered utilities include:
- Electricity
- Gas
- Water
- Sewer
- Trash removal
- Fuel oil
If certain utilities (such as water or trash removal) are covered by your landlord, these costs will be considered a part of your monthly rent.
Local programs are also able to cover the cost of move-in fees, such as security deposits and late rent fees. These funds can even cover moving costs for eligible recipients.
Finally, if you need financial assistance to cover the costs of remote learning, telemedicine, telework, or getting government services, ERA funds are allowed to help with these costs as well.
What Type of Housing Is Eligible for ERA Funds?
You don’t need to be in a traditional rental to get financial help from the ERA. Mobile homes, manufactured homes, houses, apartments, houseboats, and other rented housing options are covered.
In terms of a mobile home or manufactured home, you can still receive ERA funds if you own the home itself but rent the land it’s sitting on.
Can ERA Funds Pay for a Hotel or Motel Room?
ERA funds can go towards covering the cost of a hotel or motel room as long as you:
- Had to leave your old home and don’t have other stable housing options
- Can provide local programs with hotel bills and proof of stay
- Are working with a program that follows these guidelines as established by the ERA.
What If I’m Part of a Rent-to-Own Lease?
Rental assistance funds are available for those in rent-to-own leases so long as you:
- Haven’t signed or co-signed the mortgage to the property you’re currently renting
- You haven’t tried to purchase the property (excluding the rent-to-own lease itself).
What if I’m a Tribal Member Living Outside of Tribal Lands or a Non-Tribal Person Living on Tribal Lands?
Either person can receive funding as long as the applicant is not receiving other state or government aid or receiving assistance from a different Tribal government or Tribally Designated Housing Entity (TDHE).
In this case, ERA funding can be found through your local or member tribe’s TDHE.
What if I’m Already in Subsidized Housing?
If you’re already a part of Public Housing and receiving housing vouchers or any government funds to subsidize your housing and you have experienced a loss of income, first recertify your income with the Public Housing Authority that you work with. This could give you more aid to supplement your housing costs, and can even be applied to past rent that you had to pay (or miss) due to the loss of income.
Depending on your circumstances, you still might be able to receive ERA funds to help with rent or utility payments, though that would depend on your local ERA program.
For more information and updates regarding the pandemic’s effect on independent landlords and their renters, visit our COVID-19 education and news page. We offer resources, data from survey findings, and details of our work with Urban Institute and other like-minded organizations that are looking at a variety of issues the rental industry is facing.
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If you’re a landlord looking for new tenants, you might consider renting to military tenants and families. According to the Department of Defense, 63% of service members live in off-base private housing, giving you the chance to expand your renter search to over 11 million active-duty renters alone.
While there are significant benefits to renting to military tenants and families, there are still some drawbacks you’ll need to be aware of before you sign a lease. Here’s everything you need to know when renting to military families and tenants.
What Are the Pros of Renting to Military Tenants?
There are a lot of benefits to renting to military tenants and families. Here are the top four reasons why landlords rent to service members.
1. They Have a Reliable Income
Military members will most likely be paying or supplementing rent payments with their Basic Allowance for Housing (BAH), a stipend given to them if they are planning on living off-base.
This allowance is automatically added to the service member’s paycheck, so it is a constant and reliable stream of income intended to cover housing costs. The amount they receive will depend on the location they’re based in, the member’s rank, and if they have dependents they are supporting.
If you’re a landlord renting to military tenants, you can easily verify their BAH amount by requesting a Leave and Earning Statement (LES), which is updated for each service member monthly and provides a breakdown of their income (including their housing allowance) and leave status.
2. A Great Option for Rentals in Rural Areas
If your rental is located in a rural area, it can be hard to find reliable and eligible renters to fill your units. Renting to military tenants or renting to military families is a great option in this case because military bases are often located in rural areas across the country.
3. They Are Good Tenants With Connections
Military tenants are often very structured, hardworking, and diligent people because of their training and work ethic – something that can translate into their attitudes as renters.
Renting to military tenants and their families can also lead to your property being recommended to others stationed in your area once they decide to move to another location.
4. Renting Through the Military Housing Rental Program
When renting to military tenants or military families, you’ll come across the Rental Partnership Program (RPP), which is run in part by the Housing Services Center and connects community landlords and housing options with current service members looking for off-base, affordable housing. Participating in this program doesn’t force you to only rent to service members, but it does give you access to a larger tenant pool in your area.
This program has multiple benefits for eligible landlords, such as:
- Being able to market your rental on the RPP properties site viewed by service members looking for housing.
- Knowing that any active duty renter must have permanent orders to remain in the area throughout the decided lease period of the RPP property.
- Having rent paid using allotted military funds for service members seeking off-base housing.
To become an RPP partner, landlords are required to meet the following eligibility requirements:
- You have to have a clean record with the HSC.
- Your property meets all inspection requirements as laid out by the HSC.
- You must be willing to offer a 5-15% discount on the advertised rate, or provide a discount in other ways such as waiving move-in fees, application fees, the security deposit, or agreeing to not conduct a credit check.
- Willing to sign a memorandum of agreement (MOA) that shows you agree to RPP terms and guidelines as a rental partner.
- Know that the RPP doesn’t and can’t guarantee occupancy in the rental, nor will it cover any damages made to the property nor any late or missed rent payments.
What Are the Cons of Renting to Military Tenants?
There are also valid reasons for not renting to military tenants, most importantly being that they might be forced to leave at a moment’s notice for their job. Here are a couple of reasons why renting to military tenants can be challenging.
1. Could Move With Little Notice
At the end of the day, military tenants are bound by the requirements of their jobs, which include having to move with very little notice. Whether they are deployed to another location or have a change in station orders, military renters are legally able to move out early and break their lease without consequence, as stated by the Servicemembers Civil Relief Act (SCRA).
This can be a big drawback for some landlords, especially since you could be left without a tenant in your property. That being said, the RPP tries to remedy this as much as possible by requiring that a service member be permanently stationed at the location of the rental for at least the duration of the lease, and most service members are stationed in a given location for about two to three years.
2. Could Fall Behind on Rent
It’s also not impossible for a military tenant to fall behind on rent, despite having the support of their BAH. When this issue arises, the SCRA provides protections to service members that will keep them from being evicted due to missed payments and allow them to delay rent payments, leaving you without much room for response.
Evicting Military Tenants
Evicting military tenants is extremely difficult due to the protections of the Servicemembers Civil Relief Act. Here’s what the law outlines and when you can (and can’t) evict a service member from your rental.
Servicemembers Civil Relief Act
The Servicemembers Civil Relief Act is a set of laws that protect active-duty service members from having to carry the financial burden of breaking various contracts, leases, or other obligations due to their deployments and having to move for their work.
For landlords, this means that SCRA can prevent a military tenant from being evicted due to missed rent payments, unless said rent is over $4,089.62 a month as of 2021. This number updates on a yearly basis and is important to know if you’re planning on renting to military tenants and families.
In a case where a military tenant is not able to pay their rent because of their work and the amount of rent due does not exceed the above number, a court can prevent said tenant’s eviction for up to three months (or longer if justified). This does not absolve the service member from paying rent, nor does it act as a way for military tenants to avoid paying for their housing altogether.
Military Tenant’s Right to Terminate a Lease
SCRA also allows military tenants to terminate a given lease as long as they a) become active duty during the lease or, b) if they signed a lease while in the military then get a Permanent Change of Station (PCS) order or are deployed for at least 90 days. As long as these conditions are met, a service member only needs to give their landlord written notice of their change in status or orders.
For all standard leases, the termination will be effective “30 days after the first date on which the next rental payment is due.” Know that military tenants are still responsible for all rent payments during the months before the lease termination date. If rent was paid in advance, you will need to prorate and return all payments for months after the new termination date. Security deposits will also have to be returned at this date.
Some landlords will add an SCRA rights waiver to the lease that, if signed, would remove the military tenant’s protections under these laws. Look into your local laws for more information on if and how you can add this waiver to your lease and always advise the prospective military tenant to think about the implications of signing this waiver — as well as recommending that they consult a lawyer for advice.
Use the Customizable Lease feature by Avail to adapt your standard lease for military tenants.
Can a Landlord Refuse to Rent to Military Tenants?
Federally, military status is not a protected class according to the Fair Housing Act, which means you can refuse to rent to military tenants because of fears of losing income due to deployments or a change in PCS orders.
However, there are state and local housing protections that prevent landlords from refusing to rent to prospective tenants because of their military status. Always refer to your local and state laws on this topic before refusing to rent to a service member.
How Do I Rent to Military Tenants or Military Families?
If you’re looking to rent to military tenants or military families, then you might be wondering how you can attract these renters to your property. We’ve outlined a few ways you can make your rental jump out to prospective military tenants.
1. Adapt Your Lease to Make It Military-Tenant Friendly
Because of the nature of military jobs, it always helps to be flexible with the length or type of lease you’re using to accommodate any sudden deployments. It will be greatly appreciated by your military tenants and their families!
2. Adjust Your Rent
Many military renters will be paying for their housing with a BAH stipend, which changes depending on the service member’s rank and location. Adjusting your monthly rent cost to accommodate your area’s average BAH rate will help you attract more military renters.
3. Provide a Military Discount and Other Perks
Marketing a military discount on your rental listing will help attract more people to your rental while making them feel respected and cared for. You can also create other perks especially for military renters, such as waiving application or move-in fees, or making one month free.
Make Renting to Military Tenants Easier With Avail
When you’re ready to start renting to military tenants and families, use Avail to make the process that much easier. Customize your lease agreement to not only fit your state and local laws but also accommodate renters in the military. It makes adding an SCRA waiver, adapting payment terms, and adjusting the length of your lease that much easier.
You can also adapt the way you market your rental through Avail. Simply add in a few disclaimers about the perks you provide to service members, if you’re a partner with the RPP, and other attractive features to your rental listing through the “Build Your Rental Listing” feature under each of your properties. Your listing will then be syndicated to top online rental listing sites like Realtor.com®, Doorsteps, Apartment List, and more. Create an account or log in today to get started.
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Buying your first home can be a confusing process where every step happens simultaneously, making it difficult to know where to begin. That’s why understanding the steps to buying a house can make the overall process easier for every first-time homebuyer.
We created a first-time homebuying checklist that outlines the main steps to buying your first house to easily reference throughout the process. This checklist is perfect for homebuyers who want a simple overview of how to purchase a house to take on the go.
What Are the Steps to Buying a House?
To make things easier, here are the 10 steps you will need to follow (and check off your list) when buying your first home.
1. Meet With a Mortgage Lender
The first thing you’ll want to do is meet with a mortgage lender you’re interested in working with for your first home purchase. This meeting will give you an idea of what loan options are available to you, if you’ll need to improve your credit score for the loan you want, and how much you will need to save in terms of upfront and long-term homebuying costs.
2. Create Your Budget
The costs of buying a home can quickly add up, which is why you’ll need to create a budget to properly prepare your finances. Your budget should factor in the upfront costs — your down payment, mortgage fees, and initial property taxes — as well as other hidden costs of buying a home that will add to the total cost.
A comprehensive and realistic homebuying budget can provide visibility on how much home you can afford, as well as future expenses to prepare for. If you’re unsure on how much you can afford, you can use the Realtor.com® Home Affordability Calculator to help you confidently craft a budget.
3. Start Building Credit and Saving for a Down Payment
Although it’s possible to buy your first home with bad credit or no down payment, the homebuying process will be much more efficient with a credit score over 629 and a larger down payment. A more favorable credit score will allow you to qualify for more mortgage loan options with lower interest rates and lower monthly payments.
Depending on your mortgage lender, if you can save at least 20% of the home’s cost for your down payment, you won’t need to pay for private mortgage insurance (PMI), which adds to your overall monthly costs.
Currently renting? Use CreditBoost* to report your on-time rent payments to TransUnion to help improve your credit score.
4. Get Preapproved for a Mortgage
A mortgage lender can help facilitate the preapproval process, as well as help you find the best mortgage loan for you. Since you’ll want to be preapproved for a mortgage before making an offer on a home, you’ll want to get this done on the earlier end of the house-hunting process. That being said, you don’t want to get preapproved for a loan multiple times since the process will affect your credit score, so it’s important to have your finances in order first.
Mortgage lenders that specialize in helping first-time homebuyers can even provide certain incentives — such as interest rate discounts or a lower annual percentage rate (APR) — for those looking to take out their first home loan. Realtor.com® makes this step a bit easier by connecting you with the right mortgage lender that will fit your financial needs.
Find out how much you’ll be spending on your mortgage loan through the Get A Rate Estimate tool by Realtor.com®.
5. Find a Realtor
Next, you’ll want to find a real estate agent or Realtor to help you with your house search. These professionals will be able to take the weight of house hunting off your shoulders and provide additional assistance with negotiating prices, making offer letters, and closing on a home.
Easily search for Realtors near you who are knowledgeable about the types of homes you’re looking for and have the credentials you want when finding a reliable guide for the homebuying process.
6. Begin House Hunting
At this point, the thought of buying your first home is now very real. You’ll start searching for places that not only fit your lifestyle but improve it, which is an incredibly exciting experience.
On average, most people will tour about 10 houses (one per week) before deciding on a home. Using internet search tools, like the home search tool by Realtor.com®, will help prospective homebuyers get a better idea of what’s currently on the market and offer options they can share with their Realtor.
7. Make an Offer
Once you’ve found your dream home, it’s time to make a competitive offer on the property. This step will require you to negotiate a price with the seller and prove your worthiness for the home over other buyers. These tasks tend to be much easier with the help of a Realtor or agent, since you might find yourself in a bidding war for the property.
8. Set Up a Home Inspection and Appraisal
If all goes well during the offer stage and you successfully make a deal with the seller, then you will need to set up a home inspection and appraisal. While this seems like a minor step in the overall process, it’s actually critical to the deal and could save you money if the home is overvalued or is in need of repairs.
9. Finalize Your Mortgage Loan
The next step is to finalize your mortgage loan. This can either be done with the lender you were preapproved by or with a new one. The process, also known as the underwriting stage, will require that you submit proof of your income and job status, as well as any debt, taxes, and credit score information that could impact the loan. Once this is approved, you will be able to close on the house.
10. Close on the House
The final step to buying a house is to close on it. This is when there will be a transfer of all information regarding the title and deed to the house, as well as the money covering all upfront costs, so you will want to be well aware of everything happening in this stage to make sure nothing slips through the cracks.
Various professionals, such as your Realtor, an escrow officer, your mortgage lender, and more will be involved in this stage to make sure it runs smoothly. Then you’ll get the keys and become the proud owner of your first home.
Make Buying a Home Easier With Avail and Realtor.com®
There are a ton of resources available to help first-time homebuyers like yourself when navigating the steps to buying your first house.
If you’re still in the process of preparing your finances for the homebuying process, you can utilize the Avail CreditBoost* tool to work on improving your credit health by reporting your on-time rent payments to TransUnion each month. You can easily contribute to your FICO 9, FICO XD, and VantageScore credit scores while renting, helping you get that much closer to owning your first home.
Plus, Realtor.com® can help you every step of the way — with everything from deciding your home budget to getting connected with a mortgage lender and finding a trusted Realtor.
Find more first-time homebuying content designed specifically to help you as you work through the homebuying process.
*CreditBoost results may vary by individual.
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When preparing for the homebuying process, it’s important to know how much it can actually cost to buy a house. While some costs of buying a home are more apparent than others, you’ll want to account for both the obvious and the hidden costs when planning to buy a house as a first-time homebuyer.
To help you feel prepared every step of the process, here are the main costs associated with buying a home.
Upfront Costs of Buying Home
There are multiple upfront costs when buying a home, including the down payment, mortgage lender fees, property taxes, homeowners insurance, and more. Here are the main costs to be aware of:
1. Down Payment
Your down payment will be the biggest upfront cost you’ll be responsible to cover during the homebuying process. The minimum down payment requirement varies depending on your mortgage lender, which could be anywhere from a minimum of 3% to 10% of the cost of the house.
For a better idea on how much you’ll be required to put down, here are the down payment minimums for the main mortgage loans for first-time homebuyers:
- Conventional loan: 3%
- Federal Housing Administration loan: 3.5% to 10%
- Veteran Affairs loan: 0%
- U.S. Department of Agriculture loan: 0%
- Adjustable-Rate loan: 5%
2. Mortgage Lender Fees
Mortgage lender fees encompass everything you will need to pay during the preapproval and closing process. The origination fee, underwriting fees, and application fees are all included in the final cost.
An origination fee goes directly to the bank or mortgage lender for the creation of the loan, which ranges from 0.5% to 1% of the mortgage amount. If you plan on putting down cash for your home, then this cost may be higher for smaller loans.
Underwriting fees cover the work of going through and approving the mortgage application. These fees are non-negotiable and are specific to the mortgage lender’s or bank’s policies, ranging anywhere from $400 to $900 dollars for this process alone.
These costs will be outlined in a Loan Estimate from your mortgage lender given within three days of applying for a loan, far before you start the closing process if following our homebuying timeline. This includes your estimated interest rate, monthly payment amounts, the total closing costs for the loan, estimated insurance and tax costs on the loan, and how these costs may change in the future.
This loan estimate will also give you an idea of if your loan has any penalties for paying off your mortgage early (if applicable) or if the loan has a negative amortization feature.
Find a mortgage lender who can offer you competitive mortgage rates and facilitate the preapproval process by visiting Realtor.com®.
3. Homeowners Insurance and Property Taxes
Another upfront cost will be your homeowners insurance and property taxes. You will need to pay the first six months of your property taxes and the first 12 months of homeowner’s insurance at closing.
Hidden Costs of Buying a Home
Once you’ve saved enough for the more expensive costs of buying a home, the next step is to prepare for hidden costs that will pop up during the closing process.
1. Title Fees
These fees include costs associated with the house’s title — a legal document proving the rights of ownership and the right to sell. These include a one-time fee for searching for the title, the title settlement, title insurance, and a title insurance binder (a temporary form of title insurance that covers the buyer and seller during the transfer).
The total cost of the title fees can vary depending on which title service you go with and your ability to negotiate a lower cost.
2. HOA, Condo, or Co-Op fees
Homes that are part of a condominium association, a co-op, or the Homeowner’s Association (HOA) require homeowners to pay various group member fees.
These fees can range anywhere from $50 to $800 depending on the association and location.
3. Private Mortgage Insurance
If your mortgage lender requires private mortgage insurance (PMI) because of a smaller down payment, you will need to budget for this monthly cost as well. While not all mortgage loans require a PMI, it’s likely that you will need to add this to the overall cost of buying a home. Mortgage insurance is required by all FHA and USDA loans, or if you’re putting less than 20% down on a conventional loan.
At closing, you could be required to pay a mortgage insurance premium at closing and a monthly premium after you buy the home. This is dependent on the PMI provider as well — in some cases, you can package these costs into your monthly PMI payments, though this can affect the amount you will need to pay on your mortgage each month.
4. Reserves
A homebuyer’s reserves refer to the amount of money the buyer will need to have in their bank account after paying all closing costs and the down payment. This is not a cost per say, but an amount of money that you will need to have set aside in order to close on the house and leave your mortgage lender confident that, after all the upfront costs are paid, you will still be able to make your mortgage payments.
Some mortgage lenders will require that you have at least “two months of reserves”, which translates to enough money to cover at least two months of mortgage payments.
5. Escrow Fees
Escrow fees come from opening and maintaining an escrow account that will hold the money for the home while the deal is being finalized. This account is typically managed by your mortgage lender.
Your escrow account will also continue to serve as a savings account for your monthly mortgage payments, property taxes, and homeowner’s insurance payments. This makes it easier for you to contribute money specifically to your continuing home costs.
6. Government Fees
There will be taxes associated with transferring the title from the seller to the buyer and, depending on the state and county where the home is located, can be as high as 2.7%. Either the buyer or the seller can pay the transfer taxes, and can be negotiated between the two parties.
Recording fees are charged by the government when recording the purchase or sale of a piece of real estate. This information will be filed in your county’s public land records.
7. Appraisal and Home Inspection Costs
When buying a home, you will need to be in charge of finding an appraiser for the home to make sure that the value of the home is correct. According to the National Association of REALTORS® (NAR), this can cost between $300 to $500 but could save you money if the cost for the home is lower than what it’s being sold for.
Home inspection fees, including pest inspection, will make sure the house is in good condition and ready to be sold. The NAR states that this can cost about $300 to $500 to get done, but it will ensure that you don’t buy a home in need of massive repairs or one that is plagued by termites.
8. Hazard Insurance
If you’re in an area where you need to purchase hazard insurance, this will be an extra cost to be aware of. If your home is determined to be in a “high risk” region when it comes to floods, earthquakes, wildfires, severe storms, or any other natural disaster, you will be required to get hazard insurance, which can cost between 0.25% to 0.33% of the home’s value for a year-long policy.
9. Agent Commission
While the seller of the home normally pays for the real estate agent’s commission, there are times when the buyer will be responsible. Make sure you inquire into who will be paying the agent (if one was used) so you don’t get saddled with a cost you weren’t prepared for. This can cost around 3% of the sale price for each agent included in the transaction.
How to Save for a House With the Help of Realtor.com®
With these extra costs and fees, it’s important to include everything in your budget. As a first-time homebuyer, this may seem like a daunting task, but knowing every cost associated with the homebuying and closing process will help you save wisely.
If you’re not sure as to whether or not you want to continue to rent or buy, you can use the Realtor.com® Rent vs. Buy calculator. This will help you decide if you should continue to keep saving and building your credit for a home or if you have the necessary budget to move forward in the homebuying process.
To learn more about what you need to know when it comes to buying a house, check out our First-Time Homebuyer Resource hub.
The post 12 Costs of Buying a Home First-Time Homebuyers Should Save For appeared first on Avail.
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