How to Get a Florida Conventional Loan as a First-Time Home Buyer?
There is a process to apply for a Florida mortgage loan. We work hard to simplify the steps, as we understand that securing a mortgage as a first-time homebuyer can feel overwhelming. The process for getting a conventional loan as a first-time home buyer is as follows:
- Complete a Full mortgage application and Schedule a discovery call to speak with a mortgage specialist in order to learn more about your mortgage options and qualifications.
- The loan originator will verify Cash, Credit, and Capacity and make sure the collateral meets the specifications.
- Decide which loan option best fits your needs!
A conventional first-time home buyer is a traditional mortgage loan that meets the parameters set by Freddie Mac or Fannie Mae. Conventional loans require some percentage of down payment, depending on the mortgage you choose, and your credit score typically must be 620 or higher.
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Florida DPA Programs Include 100% Mortgage Options
Florida down payment assistance programs include second mortgages that can be forgiven at closing. Other Florida first-time homebuyer programs can be used either as a down payment assistance or closing cost assistance where eligible borrowers can obtain a 1% to 5% of the purchase price of their home under the various Florida first-time homebuyer Grant programs. The upfront cost required to buy a home is significantly decreased. Other characteristic features include –
- Second mortgage funds are offered at closing.
- Down Payment assistance that is forgiven and does not need to be repaid!
Florida Hometown Heroes Program
This Florida First-time Buyers Program is for frontline community workers committed to serving others. This includes people from law enforcement, education, firefighting departments, healthcare, and more such professions. The interest rates in the Florida Hometown Heroes Program are comparatively lower and below the market and come with down payment assistance and closing cost assistance. Buyers are also not required to pay the origination fees.
Down payment assistance offered in this program is up to $35,000 on USDA, FHA, VA or any other Conventional Loan or 5% of the first mortgage amount, whichever is lower. Other characteristics are –
- The loan is not forgivable.
- Repayment can be deferred subject to certain conditions. To know full details about the conditions and existing rates, you need to speak to an expert professional.
Requirements For A First-Time Home Buyer Conventional Mortgage
There are several requirements you must meet to qualify for a conventional loan as a Florida first-time home buyer. Below are some of the key requirements to account for as you consider applying for a conventional loan.
Depending On your situation You’ll Need a Down Payment
For a conventional loan, you will need to provide a down payment on the property you’re interested in. The down payment amount depends on your financial situation and the specific loan you obtain.
While a down payment for a conventional loan can be as low as 3%, many people opt to put closer to 20% down, as this lowers their monthly mortgage payment and reduces the amount they have to pay in interest over time. If you choose an adjustable-rate mortgage, you will need to pay at least a 5% down payment, regardless of the loan you receive.
If you are putting down less than 20% then you will need PMI
PMI, or private mortgage insurance, is required if you want to use a conventional mortgage to purchase your property with less than 20% down. If you were to default on your loan, private mortgage insurance protects the lender.
The price you pay for PMI will be determined by what type of mortgage you choose, what your credit score is, and how much of a down payment you put down. You can typically add PMI to your mortgage payment, or you can choose to pay for PMI as part of your closing costs. Speak with your mortgage specialist to choose the best way to pay for PMI if it is required.
Once you have 20% equity in your home, the PMI can be removed from your mortgage without having to refinance. If home values rise, you can ask to have your home appraised to see if you have reached enough equity to remove the PMI on your home.
Minimum Credit Score and or Payment History Requirments
Your credit score is an essential component when it comes to obtaining a conventional mortgage. For conventional loans for first-time home buyers, you will need to have a credit score of at least 620. Those with higher credit scores are typically able to qualify for lower interest rates and more beneficial loan terms.
Maximum Conventional Debt-to-Income Ratio
Your debt-to-income ratio is how much debt you have to pay every month versus how much income you have coming in. This gives Florida mortgage lenders a way to determine if you can handle the added cost of a first-time homebuyer mortgage every month. To calculate your DTI, you add up all the minimum monthly payments on all debt and divide it by your total gross income monthly income. To get a conventional mortgage, your (DTI) Debt to income must be lower than 50%.
Conventional Maximum Loan Size
The size of your loan is important when trying to get a conventional loan. While this amount changes annually, the baseline conforming loan limit going into 2025 is $806,500. Keep in mind that loan limits may be higher in areas where home prices are greater than average.
hat Type of FHA First Time Homebuyer mortgage programs can we help you get approved for?
FHA First Time Home Buyer Fixed Rate Mortgages (Section 203b) Through this program, HUD’s Federal Housing Administration (FHA) insures mortgages made by approved FHA mortgage lenders to people purchasing or refinancing a home of their own.
No Credit Score FHA First Time Home Buyer Fixed Rate Mortgages (Section 203b) Through the FHA mortgage program, HUD’s Federal Housing Administration insures mortgages made by qualified lenders to people purchasing or refinancing a home of their own.
FHA FHA First Time Home Buyer Manufactured Home Mortgages (Section 203b) Through this program, HUD’s Federal Housing Administration (FHA) insures mortgages made by qualified lenders to people purchasing or refinancing a home of their own.
FHA FHA First Time Home Buyer Mortgages for Condominium Units (Section 234c) This program ensures the loan for a person who purchases a unit in a condominium building.
FHA FHA First Time Home Buyer Bad Credit Mortgage Lenders – FHA mortgage approvals with min 580 fico score with 3.5% down. And FHA mortgage loan approvals down to 530 with 10% down payment.
Purchasing a home is one of life’s major landmarks and for some, it is even a dream come true. Here at FHA Mortgage Programs .com we understand the importance of this decision and it is our goal to make your transition into home ownership unforgettable.
The important step in purchasing a new home is to get pre-approved for a home loan. The peace of mind that comes with knowing that your mortgage loan has been approved will allow you to shop for your new home with confidence. And when you find a home and are ready to make an offer the fact that you have already been pre-approved for your loan amount will give the seller confidence in you as a buyer.
Our First-Time Home Buyer FHA Mortgage Specialists help you with FREE same-day pre-approval letter!
FIRST TIME HOME BUYERS COMMON QUESTIONS
AS A FIRST-TIME HOME BUYER SHOULD I USE A REAL ESTATE BROKER? HOW CAN IF FIND ONE? Using a real estate broker is always very good idea. All the details involved in home buying, particularly the financial ones, can be mind-boggling. A good real estate professional can guide you through the entire process and make the experience much easier. A real estate broker will be well-acquainted with all the important things you’ll want to know about a neighborhood you may be considering…the quality of schools, the number of children in the area, the safety of the neighborhood, traffic volume, and more. He or she will help you figure the price range you can afford and search the classified ads and multiple listing services for homes you’ll want to see. With immediate access to homes as soon as they’re put on the market, the broker can save you hours of wasted driving-around time. When it’s time to make an offer on a home, the broker can point out ways to structure your deal to save you money. He or she will explain the advantages and disadvantages of different types of mortgages, guide you through the paperwork, and be there to hold your hand and answer last-minute questions when you sign the final papers at closing. And you don’t have to pay the broker anything! The payment comes from the home seller – not from the buyer. By the way, if you want to buy a HUD home, you will be required to use a real estate broker to submit your bid. To find a broker who sells HUD homes, check your local Yellow Pages or the classified section of your local newspaper.
AS A FIRST-TIME HOME BUYER SHOULD I BUY INSTEAD OF RENT? A home is an investment. When you rent, you write your monthly check and that money is gone forever. But when you own your home, you can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes. This will save you a lot each year, because the interest you pay will make up most of your monthly payment for most of the years of your mortgage. You can also deduct the property taxes you pay as a homeowner. In addition, the value of your home may go up over the years. Finally, you’ll enjoy having something that’s all yours – a home where your own personal style will tell the world who you are.
AS A FIRST-TIME HOME BUYER ARE HUD HOMES A GOOD DEAL? HUD homes can be a very good deal. When someone with a HUD-insured mortgage can’t meet the payments, the lender forecloses on the home; HUD pays the lender what is owed; and HUD takes ownership of the home. Then we sell it at market value as quickly as possible. Read all about buying a HUD home. Check our listings of HUD homes and homes being sold by other federal agencies.
AS A FIRST-TIME HOME BUYER HOW MUCH MONEY DO I NEED TO BUY A HOME WITH AN FHA MORTGAGE? Well, that depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, when closing with FHA mortgage you need to come up with enough money to cover three costs: earnest money – the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house; the down payment, a percentage of the cost of the home that you must pay when you go to settlement; and closing costs, the costs associated with processing the paperwork to buy a house. When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you. The amount of your earnest money varies. If you buy a HUD home, for example, your deposit generally will range from $3500 – $5,000. The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20% of the purchase price. That’s why many first-time FHA mortgage applicants turn to HUD’s FHA for help. FHA loans require very little down. Closing costs – which you will pay at settlement – average 3-4% of the price of your home. These costs cover various fees your lender charges and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won’t be caught by surprise. If you buy a HUD home, HUD may pay many of your closing costs.
AS A FIRST-TIME HOME BUYER HOW MUCH WILL I NEED TO I BUY A HOUSE IF I HAVE BAD CREDIT? If you a bad credit mortgage applicant be a good candidate for one of the federal mortgage programs. Start by contacting one of the HUD-funded housing counseling agencies that can help you sort through your options. Also, contact your local government to see if there are any local home buying programs that might work for you. Look in the blue pages of your phone directory for your local office of housing and community development or, if you can’t find it, contact your mayor’s office or your county executive’s office. Read more about our first-time bad credit score FHA mortgage approvals with bankruptcy and past foreclosures.
WHAT IF I’M A FIRST-TIME HOME BUYER WITH NO CREDIT OR LACK OF CREDIT O QUALIFY? If you have no credit score but you can prove the ability to pay your rent and utilities on time for the past 12 months then you may qualify for FHA no-credit score mortgage loan. Read More about no credit score first-time home buyer programs.
AS A FIRST-TIME HOME BUYER ARE THERE SPECIAL GRANTS FOR SINGLE-PARENT FHA MORTGAGE APPLICANTS? There is help available. Start by becoming familiar with the home buying process and pick a good real estate broker. Although as a single parent, you won’t have the benefit of two incomes on which to qualify for a loan, consider getting pre-qualified, so that when you find a house you like in your price range you won’t have the delay of trying to get qualified. Contact one of the HUD-funded housing counseling agencies in your area to talk through other options for help that might be available to you. Research buying a HUD home, as they can be very good deals. Also, contact your local government to see if there are any local home buying programs that could help you. Look in the blue pages of your phone directory for your local office of housing and community development or, if you can’t find it, contact your mayor’s office or your county executive’s office.
AS A FIRST-TIME FLORIDA HOME BUYER HOW WOULD I KNOW IF I QUALIFY FOR AN FHA MORTGAGE? Use our simple mortgage calculators to see how much mortgage you could pay – that’s a good start. If the amount you can afford is significantly less than the cost of homes that interest you, then you might want to wait awhile longer. But before you give up, why don’t you contact a real estate broker or a HUD-funded housing counseling agency? They will help you evaluate your loan potential. A broker will know what kinds of mortgages the lenders are offering and can help you choose a lender with a program that might be right for you. Another good idea is to get pre-qualified for a loan. That means you go to a lender and apply for a mortgage before you actually start looking for a home. Then you’ll know exactly how much you can afford to spend, and it will speed the process once you do find the home of your dreams.
AS A FIRST-TIME FLORIDA HOME BUYER ARE THERE ANY OTHER CLOSING COST TO CONSIDER? Well, of course you’ll have your monthly utilities. If your utilities have been covered in your rent, this may be new for you. Your real estate broker will be able to help you get information from the seller on how much utilities normally cost. In addition, you might have homeowner association or condo association dues. You’ll definitely have property taxes, and you also may have city or county taxes. Taxes normally are rolled into your mortgage payment. Again, your broker will be able to help you anticipate these costs.
AS A FIRST-TIME FLORIDA HOME BUYER WHAT WILL THE FHA MORTGAGE COVER? Most FHA mortgage loans have 4 parts: principal: the repayment of the amount you actually borrowed; interest: payment to the lender for the money you’ve borrowed; homeowners insurance: a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders; and property taxes: the annual city/county taxes assessed on your property, divided by the number of mortgage payments you make in a year. Most loans are for 30 years, although 15-year loans are available, too. During the life of the loan, you’ll pay far more in interest than you will in principal – sometimes two or three times more! Because of the way loans are structured, in the first years you’ll be paying mostly interest in your monthly payments. In the final years, you’ll be paying mostly principal.
WHAT DO FIRST-TIME FLORIDA HOME BUYERS NEED WHEN APPLYING FOR AN FHA MORTGAGE? Good question! If you have everything with you when you visit your lender, you’ll save a good deal of time. You should have: 1) social security numbers for both your and your spouse, if both of you are applying for the loan; 2) copies of your checking and savings account statements for the past 6 months; 3) evidence of any other assets like bonds or stocks; 4) a recent paycheck stub detailing your earnings; 5) a list of all credit card accounts and the approximate monthly amounts owed on each; 6) a list of account numbers and balances due on outstanding loans, such as car loans; 7) copies of your last 2 years’ income tax statements; and 8) the name and address of someone who can verify your employment. Depending on your lender, you may be asked for other information.
HOW DO I KNOW WHAT TIME OF FIRST-TIME FLORIDA HOME BUYER MORTGAGE IS RIGHT FOR ME? There are many types of FHA mortgage programs, and the more you know about them before you start, the better. Most people use a fixed-rate mortgage. In a fixed-rate mortgage, your interest rate stays the same for the term of the mortgage, which normally is 30 years. The advantage of a fixed-rate mortgage is that you always know exactly how much your mortgage payment will be, and you can plan for it. Another kind of mortgage is an Adjustable Rate Mortgage (ARM). With this kind of mortgage, your interest rate and monthly payments usually start lower than a fixed rate mortgage. But your rate and payment can change either up or down, as often as once or twice a year. The adjustment is tied to a financial index, such as the U.S. Treasury Securities index. The advantage of an ARM is that you may be able to afford a more expensive home because your initial interest rate will be lower. There are several government mortgage programs, including the Veteran’s Administration’s programs and the Department of Agriculture’s programs. Most people have heard of FHA mortgages. FHA doesn’t actually make loans. Instead, it insures loans so that if buyers default for some reason, the lenders will get their money. This encourages lenders to give mortgages to people who might not otherwise qualify for a loan. Talk to your real estate broker about the various kinds of loans, before you begin shopping for a mortgage.
AFTER I’M APPROVED FOR AN FHA MORTGAGE HOW DO I KNOW WHAT TO OFFER? your real estate broker can help you here. But there are several things you should consider: 1) is the asking price in line with prices of similar homes in the area? 2) Is the home in good condition or will you have to spend a substantial amount of money making it the way you want it? You probably want to get a professional home inspection before you make your offer. Your real estate broker can help you arrange one. 3) How long has the home been on the market? If it’s been for sale for awhile, the seller may be more eager to accept a lower offer. 4) How much mortgage will be required? Make sure you really can afford whatever offer you make. 5) How much do you really want the home? The closer you are to the asking price, the more likely your offer will be accepted. In some cases, you may even want to offer more than the asking price, if you know you are competing with others for the house.
AS A FLORIDA FIRST-TIME HOME BUYER WHAT IF THE SELLER DOES NOT ACCEPT MY OFFER? They often are! But don’t let that stop you. Now you begin negotiating. Your broker will help you. You may have to offer more money, but you may ask the seller to cover some or all of your closing costs or to make repairs that wouldn’t normally be expected. Often, negotiations on a price go back and forth several times before a deal is made. Just remember – don’t get so caught up in negotiations that you lose sight of what you really want and can afford!
WHAT ARE THE PROCEDURES FOR CLOSING A FLORIDA FIRST-TIME HOME BUYER LOAN? At closing, you’ll sit at a table with your broker, the broker for the seller, probably the seller, and a closing agent. The closing agent will have a stack of papers for you and the seller to sign. While he or she will give you a basic explanation of each paper, you may want to take the time to read each one and/or consult with your agent to make sure you know exactly what you’re signing. After all, this is a large amount of money you’re committing to pay for a lot of years! Before you go to closing, your lender is required to give you a booklet explaining the closing costs, a “good faith estimate” of how much cash you’ll have to supply at closing, and a list of documents you’ll need at closing. If you don’t get those items, be sure to call your lender BEFORE you go to closing. Be sure to read our booklet on settlement costs. It will help you understand your rights in the process. Don’t hesitate to ask questions.
AS A FIRST-TIME FLORIDA HOME BUYER HOW DO I APPLY WITH AN FHA MORTGAGE LENDER?
Answer: You can finance a home with a loan from a bank, a savings and loan, a credit union, a private FHA mortgage lender, or various state government lenders. Shopping for a loan is like shopping for any other large purchase: you can save money if you take some time to look around for the best prices. Different lenders can offer quite different interest rates and loan fees; and as you know, a lower interest rate can make a big difference in how much home you can afford. Talk with several lenders before you decide. Most lenders need 3-6 weeks for the whole loan approval process. Your real estate broker will be familiar with lenders in the area and what they’re offering. Or you can look in your local newspaper’s real estate section – most papers list interest rates being offered by local lenders. You can find FHA-approved lenders in the Yellow Pages of your phone book. HUD does not make loans directly – you must use a HUD-approved lender if you’re interested in an FHA loan.
