Choosing The Best Type Of Mortgage When Buying A Florida Real Estate

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Jul 23, 2021 Homebuyer blog

Finding a home for sale in Miami, Florida is only half the battle. The other half is choosing the right home loan. Keep in mind that you’ll likely be paying your mortgage for a long time. So it’s essential to find a winning deal that’ll fit your needs and your budget.

Every mortgage has its pros and cons. Some lenders require people to pay a 20% down payment, while others require a lot less to buy a property. To help you know which one to choose, here is a list of all possible home loans.

Primary types of mortgage

Primary types of mortgage | Reach Home Loans

Conventional mortgage

The federal government doesn’t back a conventional loan. But once approved, borrowers with good credit standing and stable income history and employment can pay as little as 3% for their down payment.

FHA Loans

FHA Loans, otherwise known as Federal Housing Administration loans, are available for low-to-moderate-income buyers. These loans are ideal for first-time buyers who do not qualify for a conventional mortgage. If eligible, borrowers can pay as little as 3.5% of the property’s purchase price as a down payment.

VA Loans

The United States Department of Veteran Affairs guarantees mortgages for qualified veterans, military service members, and their spouses. Eligible borrowers can finance their loan amount entirely without paying any down payment. It also doesn’t include any broker fee and MIP. However, VA loans require a funding fee, which is the loan amount’s percentage that helps offset the cost. The amount can vary depending on the borrower’s loan amount and service category.

USDA Loans

The USDA (U.S. Department of Agriculture) guarantees mortgages for eligible low-income borrowers in rural areas to apply for a loan. Once approved, borrowers don’t have to pay any down payment as long as the property meets the USDA rules.

No matter what mortgage you choose, it’s highly advisable to check your credit score beforehand to know your standing. You can get a free credit report from any of the three primary reporting bureaus each year. From there, you can check any discrepancies to fix them or find a way to pay down your debt.

It’s essential to know how much you can afford before signing any deals. Tell us the property you have in mind and we’ll help you get a pre-approved loan. Call us at 954-780-5565 to book a FREE consultation.

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