Florida Homebuyers: Everything You Need to Know About Conventional Mortgages
Updated: Sep 3
Buying a home in Florida is an exciting adventure, but it can also be a complex process. One of the most important decisions you'll make as a homebuyer is selecting the right mortgage product. With so many options available, it can be challenging to know where to begin. In this guide, we'll take an in-depth look at conventional mortgages and the various loan programs available to Florida homebuyers. As a mortgage broker with 20+ years of industry experience, Bennett Capital Partners is here to help you navigate the mortgage process and find the best option for your needs.
Table of Contents
Types of Conventional Mortgages
Conventional mortgages are loans that are not backed by a government agency, such as the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), or the United States Department of Agriculture (USDA). There are two main types of conventional mortgages:
Fixed-Rate Conventional Loans: The interest rate remains the same for the entire loan term, providing predictability in your monthly mortgage payments.
Adjustable-Rate Conventional Loans: The interest rate may change over time based on market conditions, which can result in a change in your monthly payment.
Mortgage Programs
Several mortgage programs fall under the conventional mortgage umbrella, catering to the unique needs of Florida homebuyers. Some popular programs include:
Non-QM:
Non-Qualified Mortgage loans cater to borrowers who do not meet the standard underwriting requirements for conventional loans. These loans may have flexible terms or are designed for specific situations, such as self-employed borrowers or those with irregular income.
Down payment and credit score requirements for Non-Qualified Mortgage loans can vary widely based on the lender and the borrower's unique circumstances. Non-QM loans may require a larger down payment, typically around 20%, some lenders may allow as little as 5-10% down depending on the borrowers credit score and other qualifying criteria.
By understanding the unique benefits and requirements of Non-QM Portfolio Loans, you can find a loan that fits your specific needs. To learn more about these loans and how they can benefit you, check out our blog post titled What Are Non-QM Portfolio Loans? A Comprehensive Guide at this link here
First Time Homebuyer:
Programs designed to assist those purchasing their first home, often offering lower down payment requirements, reduced interest rates, and other benefits to make homeownership more accessible.
First-time homebuyer programs can offer down payment assistance in the form of grants, loans, or tax credits, reducing the upfront cost of homeownership. Credit score requirements for these programs vary but may be more forgiving than traditional loans, with some programs accepting credit scores as low as 580.
By understanding the different First-Time Homebuyer Mortgage Programs available, you can find a loan that meets your specific needs and fits within your budget. To learn more about these programs and how they can help you achieve your homeownership dreams, check out our blog post titled First-Time Homebuyer Mortgage Programs: A Guide to Buying Your First Home at this link here
Jumbo:
Loans for high-value properties exceeding conventional loan limits. These loans usually have stricter credit score requirements, higher down payment requirements, and higher interest rates.
Jumbo loans typically require a larger down payment, often around 20% or more, and a higher credit score, typically 700 or higher, to qualify for the lowest interest rates. There are options that allow 5-10% downpayments as well as programs that allow lower credit scores down to 500. It is important to discuss with your mortgage broker the best options that is right for you.
If you're in the market for a high-value property, a jumbo mortgage may be the solution for you. However, with a jumbo loan, you may face higher interest rates compared to conventional loans. At Bennett Capital Partners, we have created a comprehensive blog post that covers everything you need to know about jumbo mortgage rates and the factors that affect them.
Check out our blog post Jumbo Mortgage Rates: Understanding the Factors That Affect Your Interest Rate at this link here. This post explains the basics of jumbo loans and dives into the factors that affect your interest rate, such as your credit score, down payment, loan amount, and more.
Condominium Loans:
Loans specifically for condominium purchases, , with unique requirements based on the building, such as occupancy rates, ownership structure, and insurance coverage.
Down payment requirements for condominium loans can vary based on the lender and the borrower's credit profile, but typically range from 3% to 20%. The credit score requirement for condominium loans is typically 620 or higher for conventional loans and 580 for FHA mortgages. Before you make any offers on condos it is important to speak to your mortgage broker to ensure you are in the right program for that project.
Check out our blog post A Deep Dive into Fannie Mae's Condo Project Review Process at this link here. This article will explore the full and limited condo review processes, new condo project guidelines, and the criteria used to determine eligibility.
Renovation Loans:
Financing options for home improvements and renovations, allowing borrowers to finance the cost of their home improvements into their mortgage.
Renovation loans may require a higher down payment, typically around 10% to 20%, depending on the lender and the scope of the renovation project. Credit score requirements for renovation loans are typically 620 or higher.
To learn more about Renovation Mortgages, you can check out our blog post: Renovation Mortgages: Innovative Financing Solutions for Your Home Improvement Needs. You can find the post at this link here
Freddie Mac HomePossible:
A mortgage program designed to assist low-to-moderate income borrowers with down payment and closing cost assistance. This program offers flexible sources of funds for the down payment, including gifts and grants.
Freddie Mac HomePossible requires a minimum down payment of 3%, which can be funded by a variety of sources, including gifts and grants. Borrowers must also meet income limits, which vary depending on the location of the property and the number of people in the household.
To learn more about Freddie Mac HomePossible income limits and guidelines, you can check out Bennett Capital Partners' blog post: Home Possible® Mortgage Income Limits & Guidelines. You can find the post at this link here
Fannie Mae HomeStyle ® Mortgage:
A mortgage program that allows borrowers to finance home improvements and renovations as part of their home purchase or refinance. This program offers flexibility in loan terms and allows for a range of renovations, from small updates to major remodels.
The down payment requirement for HomeStyle loans is typically 5% or more, depending on the lender and the borrower's credit profile. The credit score requirement for HomeStyle loans is typically 620 or higher.
At Bennett Capital Partners, we have created a comprehensive blog post that covers everything you need to know about the Fannie Mae HomeStyle® Renovation Loan. Check it out the blog post Fannie Mae HomeStyle Renovation Loan: Everything You Need to Know at this link here . This post provides valuable information on the benefits of the program, eligibility requirements, and the application process.
Fannie Mae HomePath Mortgage:
A program for purchasing foreclosed properties owned by Fannie Mae. This program offers low down payments, flexible mortgage terms, and waived appraisal fees for eligible properties.
The down payment requirement for HomeStyle loans is typically 5% or more, depending on the lender and the borrower's credit profile. The credit score requirement for HomeStyle loans is typically 620 or higher.
At Bennett Capital Partners, we have created a comprehensive blog post that covers everything you need to know about the Fannie Mae HomePath Program. Check it out our blog post Fannie Mae HomePath Program: Your Key to Finding Your Dream Home by clicking this link here . This post provides valuable information on the benefits of the program, eligibility requirements, and how to take advantage of this fantastic opportunity.
Fannie Mae HomeReady Mortgage:
A mortgage designed for low-to-moderate income borrowers with flexible underwriting guidelines. This program offers reduced down payment requirements and lower mortgage insurance premiums for eligible borrowers.
The down payment requirement for HomeReady loans can be as low as 3%, depending on the lender and the borrower's credit profile. The credit score requirement for HomeReady loans is typically 620 or higher. To read more about this program visit our HomeReady® Mortgages: Guidelines & Limits blog post.
Bennett Capital Partners has a great blog post that explains everything you need to know about the Fannie Mae HomeReady Program. Check it out our blog post Fannie Mae HomeReady Program for First-Time Homebuyers at this link here: . This post provides valuable information on the benefits of the program, eligibility requirements, and how to apply.
Warrantable Condo Mortgages:
Loans for condominium units that meet specific requirements set by Fannie Mae or Freddie Mac, making them eligible for financing. These loans typically have lower interest rates and more favorable terms compared to non-warrantable condo mortgages.
The down payment requirements for Warrantable Condo Mortgages can vary depending on the lender and the borrower's credit profile. However, the down payment for Warrantable Condo Mortgages typically ranges from 3% to 20% of the purchase price. The exact down payment requirement may depend on factors such as the borrower's credit score, debt-to-income ratio, and the property's location and value.
At Bennett Capital Partners, we have created a comprehensive blog post that covers everything you need to know about warrantable and non-warrantable condos. Check our blog post Warrantable vs Non-Warrantable Condos: Understanding the Key Differences out at this link here. This post provides valuable information on the differences between the two types of condos, the financing options available, and how to determine if a condo is warrantable or non-warrantable.
Benefits of Conventional Mortgages
There are several advantages to choosing a conventional mortgage:
✔ Flexibility: Conventional mortgages offer a wide range of loan terms, down payment options, and interest rates, making it easier for borrowers to find a mortgage that suits their needs.
✔ Lower Mortgage Insurance Premiums: Borrowers with a down payment of at least 20% can avoid mortgage insurance entirely. For those with smaller down payments, private mortgage insurance (PMI) premiums are typically lower than those for government-backed loans.
✔ Higher Loan Limits: Conventional mortgages generally have higher loan limits than government-backed loans, allowing borrowers to purchase more expensive properties.
✔ Refinancing Options: Conventional mortgages often provide more refinancing options, allowing borrowers to take advantage of lower interest rates or change the terms of their loan.
Qualifying for a Conventional Mortgage
To qualify for a conventional mortgage, borrowers must meet specific credit and income requirements. Some key factors that lenders consider include:
✔ Credit Score: A higher credit score will typically result in better interest rates and loan terms.
✔ Debt-to-Income Ratio (DTI): Lenders prefer borrowers with a DTI below 43%, as it demonstrates the ability to manage monthly debt obligations.
✔ Down Payment: While some conventional mortgages allow for down payments as low as 3%, a larger down payment may result in better loan terms and lower PMI premiums.
✔ Employment History: Lenders typically require a stable employment history of at least two years.
Steps to Apply for a Conventional Mortgage
Evaluate Your Financial Situation: Review your credit score, calculate your DTI, and determine how much you can afford for a down payment.
Contact a Mortgage Broker: Bennett Capital Partners can help you navigate the mortgage process and find the best loan product for your needs. You can call Bennett Capital Partners 1-800-457-9057, email info@bcpmortgage.com or fill out their online contact form here.
Complete a Mortgage Application: Bennett Capital Partners will guide you through the application process, providing support and answering questions along the way. To start the application process with Bennett Capital Partners go to their online application here.
Submit Required Documentation: Provide necessary documents, such as pay stubs, tax returns, and bank statements, to verify your income and assets.
Receive a Loan Estimate: Review the loan estimate provided by your lender, which outlines the terms and costs of your mortgage.
Finalize Your Mortgage: Once your application is approved, work with your mortgage broker and lender to close on your loan and finalize your home purchase.
Working with a Mortgage Broker
A mortgage broker can help you navigate the complex mortgage landscape and find the best loan product for your needs. At Bennett Capital Partners, our experienced team of mortgage professionals is dedicated to helping Florida homebuyers achieve their homeownership dreams. We offer personalized service, in-depth industry knowledge, and access to a variety of mortgage programs to meet the unique needs of our clients.
Conclusion
Conventional mortgages provide a flexible and accessible option for Florida homebuyers. By understanding the various mortgage programs and working with an experienced mortgage broker, you can confidently navigate the mortgage process and find the best loan product for your needs. Whether you're a first-time homebuyer or an experienced investor, Bennett Capital Partners is here to help you achieve your homeownership goals.
Ready to take the next step in your home buying journey? Contact our team at Bennett Capital Partners today for personalized guidance and support. Or, if you're ready to get started, complete our online mortgage application or request a quick quote to explore your mortgage options.
FAQ'S
What is a conventional mortgage and how is it different from government-backed loans?
A conventional mortgage is a loan that is not guaranteed by a government agency such as the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), or the United States Department of Agriculture (USDA). Unlike government-backed loans, conventional mortgages are not insured or backed by the government.
What are the types of conventional mortgages available for Florida homebuyers?
There are two main types of conventional mortgages available for Florida homebuyers: fixed-rate conventional loans and adjustable-rate conventional loans.
What are the benefits of choosing a conventional mortgage?
Conventional mortgages offer flexibility in loan terms, down payment options, and interest rates, and generally have higher loan limits than government-backed loans. Borrowers with a down payment of at least 20% can avoid mortgage insurance entirely.
How do I qualify for a conventional mortgage?
To qualify for a conventional mortgage, borrowers must meet specific credit and income requirements. Lenders typically prefer borrowers with a higher credit score, a debt-to-income ratio below 43%, a larger down payment, and a stable employment history of at least two years.
What are the steps involved in applying for a conventional mortgage?
The steps to apply for a conventional mortgage include evaluating your financial situation, contacting a mortgage broker, completing a mortgage application, submitting required documentation, receiving a loan estimate, and finalizing your mortgage.
Philip Bennett
Philip is the owner and Licensed Mortgage Broker at Bennett Capital Partners. He earned his degree in Accounting and Finance from Binghamton University and holds a Master's Degree in Finance from NOVA Southeastern University. With more than 20 years of experience, Philip has been a leader in the mortgage industry. He has personally originated over $2 billion in residential and commercial mortgages.
Learn more about Philip Bennett's background and experience on our Founder's page. Whether you're a first-time homebuyer or a seasoned real estate investor, our team is here to help you achieve your real estate goals. Don't wait any longer, contact us today and let us help you find the right mortgage for your needs.
Discover helpful tips and tricks on mortgages by reading our blog posts
Can I Get a Bank Statement Cash Out Refinance Loan? to learn more about how this program can help you get the cash out needed using bank statement deposits as income. Click here to read the full article
Fannie Mae Homepath Program: Everything You Need to Know to learn more about how this program can help you purchase a Fannie Mae Foreclosure Property. Click here to read the full article
Fannie Mae HomePath Program: Your Key to Finding Your Dream Home to learn more about how this program can help you finance a Fannie Mae foreclosure property. Click here to read the full article
Home Possible® Mortgage Income Limits & Guidelines to learn more about how this program can help first-time home buyers get a house with 3% down. Click here to read the full article
A Deep Dive into Fannie Mae's Condo Project Review Process to learn more about how the Fannie Mae condo project review department. Click here to read the full article
How To Get The Best Mortgage Rates In Florida to learn more about how you can get the best mortgage rate. Click here to read the full article