Conventional Florida Mortgage Lenders

Conventional mortgage loans require a 5% down payment. PMI mortgage insurance premiums can be removed once loan to value falls below  80% of the home value. Unlike PMI, the FHA  mortgage insurance premium lasts for the life of the mortgage loan. With the conventional mortgage loans require different down payment amounts than do VA and FHA government loan programs. Since the recession of 2005 to 2010, the conventional mortgage down payment requirements have “tightened,” becoming more strict. In general, most conventional mortgages lenders usually require 10 to 25 percent of the purchase price as a down payment. There are exceptions, however, that may decrease down payments to as low as  3% percent for first-time home buyers, or increase them to 30 to 40  percent for bad credit Florida mortgage applicants.


Down payments for conventional Florida mortgage loans those that are not offered or guaranteed by the federal government vary with the size of the loan. Most Florida conventional mortgage lenders  prefer at least 20 percent down, which, depending on the loan you need, could be problematic. Down payment requirements for “jumbo” loans–requiring higher mortgage balances than Fannie Mae will purchase vary, but are in the 20 percent range. Fannie Mae will purchase mortgages up to $421,000, as of 2017.


Down payments declined in the mid-1980s, due to a deep recession that began in 1987. Fixed mortgage rates climbed to 18 percent, generating more creative down payment decreases, to as low to 5 to 10 percent. Along with new adjustable-rate mortgages and balloon mortgages–loans with 30-year payments, but coming due in five years–lower down payments made home buying somewhat affordable during this period.


Florida Mortgage applicants whose down payment is less than 20 percent must pay for private mortgage insurance. PMI insures the Flroida mortgage lender for the amount of loan to value above 80 percent. For example, a $100,000 Florida home with a $90,000 mortgage has a 90 percent LTV. The PMI company “insures” the Florida mortgage loan balance over 80 percent $10,000 for the Florida mortgage lender. Buyers putting down less than 20 percent pay a monthly PMI premium, which is added to their Florida mortgage payment.


For most First-time home buyers, most with limited cash, enjoy lower minimum down payment requirements. Many prospective new homeowners can get a mortgage with a 3 to 5 percent down payment. Prior to the real estate crash of 2007, there were good options for no-money-down loans, but most of these have become extinct. Still, a 3 percent versus a 20 percent down payment helps many more people afford homes.


While closing costs and down payments are unrelated, together they impact the amount of cash needed to complete a home purchase. When refinancing a conventional loan, homeowners can usually include closing costs in the new mortgage loan amount. However, when purchasing a home, buyers need funds for closing costs–often $3,000 to $5,000–in addition to the required down payment.


While mortgage applicants can find single-family conventional mortgages requiring only 3 to 5 percent down payments, most condominium purchasers need at least 5%  percent down to get a loan. Mortgage lenders perceive a higher risk with condominium loans, requiring the higher down payment. The permanent interrelationship among all units in a condominium introduces other issues that might affect the value of an individual unit, creating higher risk than with a detached single-family home.


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