Many Florida home buyers are calling and asking for conventional mortgages with smaller down payments.  And in today’s Florida mortgage market, home buyers should look at mortgage program availability for detailed comparison.  I have a rule of thumb for home buyers, as the mortgage markets have dried up a bit, with lower down payments or first time home buyers.

If you have less than 5% to use towards a down payment you should take advantage of an FHA Florida mortgage.  In fact, if you are planning on using only 5% towards a down payment consider this – private mortgage insurance, PMI, is only available (as I write this) through one PMI company.  And the payment is much higher than the monthly insurance payment required with FHA. 

Planning to put at least 10% in down payment?  You must then review and compare the Conventional Fannie Mae or Freddie Mac type mortgage with PMI against the FHA mortgage with PMI.  The only big difference now is the UFMIP or the upfront mortgage insurance premium that is required with FHA loans and is usually rolled into the loan amount.  For 30 year fixed rate mortgages that would be 1.75% of the amount borrowed.

If you have saved enough to apply at least 15% towards your down payment; you should focus on a Conventional fixed rate mortgage.  Because the PMI required is much lower than you would expect and can be removed after 2 years if you have reached a 20% equity position.  FHA/ loans require the PMI to be paid for at least 5 years before asking to have it removed.

For more information regarding Florida first time home buyer programsor to simply obtain an upfront Good Faith Estimate for comparison, call your trusted local Florida Mortgage Professional.

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