Florida Mortgages for First-Time Home Buyers
Florida First time home buyers have one of the best opportunities in years to buy their first home. In no other time could you purchase a home with just 3.5% down and at a 3.5% interest rate. It even sounds unbelievable and for Florida first time home buyers obtaining a mortgage under the first time home buyer program is easier than ever.
Shouldn't I Apply for A Florida Conventional Mortgage ?
Florida Conventional Mortgages
Believe it or not only 30% of Florida homeowners apply for a government loan. Most Florida homeowners obtain conventional mortgages. Florida Conventional mortgage loans are loans that are issued by private mortgage lenders. These lenders make loans to Florida homeowners directly and without the lender or bank receiving help from government repayment guarantees.
It may seem a little unusual that there are so many conventional mortgages vs FHA home loans since a conventional mortgage has much stricter underwriting requirements. In order to qualify for a conventional Florida mortgage a borrower will need a credit score of more than 700 to qualify and a minimum down payment of 20% or more to avoid Private Mortgage Insurance. (PMI).
The PMI is a fee charged by the borrowers for insurance against borrower default.
There are additional benefits to a conventional mortgage for those that can afford the additional down payment. Some of these include no restriction on who lives in the home and no additional charge for PMI insurance . Conventional mortgages can be used for primary residences as well as investment properties. Although many of Florida First Time Home Buyers choose a conventional home loan, a government backed FHA, VA or USDA may be a better option for some.
Mortgage insurance premiums apply to government backed FHA loans, which are guaranteed by the government. Private mortgage insurance (PMI) is charged when you place a down payment of less than 20% for a Florida Conventional Mortgage. More on this later.
Florida FHA Home Loans for Florida First Time Home Buyers
The Best Choice For Florida First Time Home Buyers
An FHA home loan for Florida First time home buyers is one of the best products ever available for Florida first time home buyers. With an FHA loan, there are lower credit score requirements and well as no income requirement.
A major advantage of the FHA Florida First Time Home Buyer Program is that the mount needed for a down payment is only 3.5%. Because of the government guarantee to the lender for FHA Loans interest rates are typically lower than conventional mortgages.
An FHA Florida First time home buyer who gets an FHA loan must pay an upfront Mortgage insurance premium or MIP of 1.75% of the base loan amount, this is regardless of the Loan To Value (LTV) Ratio. For an FHA loan after the initial payment, a smaller mortgage insurance premium is included for the life of the loan with the monthly mortgage bill. The only way to stop paying the MIP is when your equity reaches 20% or more.
USDA Loans – Zero Down Home Loan for Florida First Time Home Buyers
USDA home loans were originally designed for those looking to purchase a home that have low incomes or limited financial resources and who live in USDA (US Department of Agriculture) areas that are designated as rural areas. This “rural” designation comprises about ninety five percent of the land area in the United States and over 100 million people. Don’t assume that a house that you like does not qualify.
As with FHA loans, the USDA Loan does not loan money directly. Instead, the “USDA” US Department of Agriculture insures 90% of the entire loan amount. This enables private lenders to issue home mortgages to homeowners who otherwise might not qualify.
What makes a USDA home loan good for first time home buyers. The major benefitss include:
- No down payment requirement. Zero Down!
- Lower interest rates (usually). Based on credit model.
- No loan limits. Unlike VA and FHA loans, there are no restrictions on the size of the mortgage you can obtain.
- There are Lower mortgage insurance fees “MI” : MI fees will typically run 1% of the loan amount + an additional monthly fee of .35% of the mortgage amount. The additional monthly fee will be paid for the life of the loan.
The main stumbling block of the USDA loan program is that the property you want must be in a rural area or small community. Before you apply for a USDA loan, use the USDA’s property eligibility tool on the USDA website to determine if the home is located in USDA-designated rural area.
Florida first time home buyers should know that the qualification requirements for a no money down USDA loan are stricter than those for VA and FHA loans. Today you will need a 620 plus credit score and a DTI or debt to income ratio of not more than forty one percent. The FHA first time home buyer loan program allows for a “DTI” debt-to-income ratio of over 50% in some cases.
Because the USDA loan program was custom made for low income home buyers there are caps on your income to qualify for this program. The gross income that a homeowner can make does vary by state and county so ask your mortgage loan expert what the maximum income can be in the county that you are looking for a loan.
First Time Home Buyer VA Loans – (Zero Down Home Loans for vets)
For a VA loan or a VA First Time Home Buyer, if you’re a Veteran, an active-duty service member, a National Guard member or reservist, you will most likely qualify for a VA Home Loan. You can find out what you are eligible for Here.
Loans guaranteed by the Veterans Administration do not require any down payment or mortgage insurance.
In addition, there is (technically) no minimum credit score, though many lenders will want to see a score of 620 or higher.
There is also no limit on how much you can borrow. However, because there is a limit on the amount the VA can guarantee to repay private lenders in the event of default, there is a practical loan limit. In most parts of the country, the loan limit average is $520,000. For high-cost areas in the continental U.S. the limit is $726,555, and it’s even higher in Hawaii. Check with us to see what the limit is in the area that you are looking to purchase.
Check your VA loan eligibility.
You do have to prove that you earn enough income to repay the loan, and you can’t have too much debt. The guidelines for VA loans is typically easier than those of conventional loans.
VA loans can be used only to finance or refinance a primary residence. You can’t use the loan to buy or refinance a vacation or investment property unless you plan to live there for at least a year. We are the #1 source for VA Home Loans.
Florida Real Estate Market Statistics For First Time Home Buyers
For Florida First Time Home Buyers it is good to know that Florida real estate is booming. Home prices have been climbing for years and more and more people have been flocking to Florida . Even with the volatile markets and whats sure to be lower real estate prices in the near term, the fact that Florida is a such a desireable destination for both retirees and young families alike. First time home buyers buying today while rates are so low will enjoy increased equity in the years to come.
Closed home sales are one of the most important indicators for the residential real estate market in Florida. When comparing closed sales across markets of different sizes economists recommend comparing the percentage changes in sales rather than the number of sales. Closed Sales (and many other market metrics) are often affected by seasonal cycles, so more factual trends are more accurately represented by year over year changes.
Another words comparing March 2019 sales to March 2020 year over year.
Florida First Time Home Buyer Expert Advice