Start with the loan, not the house
Most first-time buyers pick a house and then figure out financing. It works better in the other order. Knowing which loan fits you sets your price range, your monthly payment and how strong your offer looks to a seller. Below are the main loan types buyers in Florida compare, and what to know about each. Loan rules, limits and rates change, so confirm current details with a loan officer.
FHA loans
FHA loans are insured by the Federal Housing Administration and are popular with first-time buyers because they allow a lower down payment and more flexible credit guidelines than many conventional loans. The trade-off is mortgage insurance, which adds to the monthly cost. If you plan to renovate, see how an FHA 203(k) loan can finance repairs together with the purchase.
Conventional loans
Conventional loans are not government-insured. Some programs allow low down payments for qualified first-time buyers, and mortgage insurance can often be removed later once you build enough equity. Stronger credit generally means better pricing. Buyers with a larger down payment or good credit often find conventional loans cost less over time.
VA and USDA loans
If you have military service, a VA loan may offer no down payment and no monthly mortgage insurance. USDA loans can offer zero down payment in eligible rural and suburban areas for buyers within income limits. Eligibility depends on the program, so ask whether you qualify.
Down payment and closing cost assistance
Florida and many local programs offer help with down payments and closing costs for eligible buyers, often as a grant, a second loan or a deferred loan. Programs have income limits, price limits and education requirements, and funds can run out, so ask your loan officer which are open now.
Loan types at a glance
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FHA: low down payment, flexible credit, mortgage insurance required.
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Conventional: can be lower cost with good credit, insurance may be removable.
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VA: for eligible veterans and service members, often no down payment.
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USDA: for eligible areas and incomes, often no down payment.
What lenders look at
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Credit history: payment history and current balances.
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Income and employment: stable, documented income.
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Debt-to-income ratio: your monthly debts compared with your income.
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Savings: funds for the down payment, closing costs and reserves.
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The property: appraisal value and condition.
Documents to gather
Pay stubs, W-2s or tax returns, recent bank statements, photo ID and a list of debts are the usual starting point. Self-employed buyers should expect to provide more.
Budget for the whole payment
Your monthly payment includes more than principal and interest. Taxes and homeowners insurance are usually collected in escrow, which is explained in our guide to mortgage escrow in Florida. Get an insurance estimate early from Quality RE Insurance, and plan a home inspection before you finalize the purchase. When you are ready to shop, browse homes in Orlando and Central Florida.
Talk to us
To compare loan options and get a pre-approval, contact Quality Real Estate Finance at (407) 476-6667.
This article is general information, not a loan offer or financial advice. Program rules, limits, rates and eligibility change, and terms depend on your lender and qualifications.