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What Should You Know About FHA Loans?

FHA loans are an extremely popular Florida mortgage option, and there are a lot of reasons why. Generally speaking, a mortgage loan insured by the Federal Housing Administration (FHA) is one of the easiest types of mortgages to qualify for because it requires a low down payment and your credit doesn’t have to be perfect. If you’re considering an FHA loan, here’s some things you should know.

  • Attractive interest rates. Because the loan is insured by the FHA, lenders typically offer lower interest rates for FHA loans than conventional mortgages. The lenders face less risk so they don’t have to charge as much in interest.
  • Lower minimum credit scores. A perfect FICO (Fair Isaac Corporation) credit score is 850, but very few people have perfect credit. In fact, the Fair Isaac Corp. estimated in 2010, only 0.5 percent of consumers have a perfect score. With an FHA loan, though, you don’t need perfect credit. Borrowers with a score of 600 can qualify for an FHA loan with a low minimum down payment of 3.5 percent of the purchase price. People with credit scores at 580 can still qualify, but will need a down payment of at least 10 percent.
  • Required mortgage insurance premiums (MIPs). These premiums are required for FHA loans. They are charged as an up-front premium of 1.75 percent of the loan, and there is an annual premium that you pay on a monthly basis. The up-front premium can be paid as part of the closing costs or rolled into the mortgage. The annual premium is based on the borrower’s loan-to-value (LTV) ratio, the amount borrowed, and the length of the mortgage.
  • Closing costs may be covered. With an FHA mortgage, lenders, builders, or the seller are allowed to pay some of the closing costs, like appraisals, credit reports, or title expenses.
  • Cash available for home repairs.  The FHA typically requires that a property meets certain standards to qualify for a loan, but it also offers a special loan for people who are buying fixer-uppers. You may be able to finance up to $35,000 for non-structural repairs.
  • Maximum mortgage limits. There are FHA loan limits that vary by state and county. In Florida, for example, limits range from $271,050 for a single-family home to $529,000.
  • Other requirements. Some other typical requirements include a steady employment history (at least two years), at least two years out of bankruptcy with good credit reestablished, and at least three years out of foreclosure with good credit reestablished.

Getting an FHA loan

The FHA doesn’t make loans, it insures them. And only FHA-approved lenders can make FHA loans. So if you’re in the market for a Florida mortgage, you’ll need to find an FHA lender. Remember that different lenders offer different interest rates, costs, and other charges, even on the same FHA loan. It’s worth your time to shop around. If you’re interested in learning more about FHA loans, Embrace Home Loans can help. We’re experts in Florida FHA lending. Please browse the website for more information, or call 407-733-6425.

Conventional vs. FHA Mortgage: Which Is Right for You?

Both conventional and FHA loans are very popular options for Florida residents who want to finance a home purchase. But which option is the best for you? That’s not an easy question to answer, and it depends heavily on your personal situation. Let’s look at both types:

  • FHA mortgages are insured by the Federal Housing Authority (FHA), and can be issued by any FHA-approved lender. FHA loans are designed to help lower-income borrowers qualify for mortgages. Since they’re backed by the federal government, lenders are protected from people who default on their loans, and that means the lenders can offer more competitive interest rates to prospective borrowers.
  • Conventional mortgages are simply any mortgages that are not insured or guaranteed by the federal government. Because they’re not protected by the government, they tend to require borrowers to have better credit scores and higher down payments.

At a Glance

The chart below highlights some of the key differences between the conventional and FHA loans.

FHA Loans Conventional Loans
Lower down payment requirements (3.5% minimum) Higher down payment requirements (usually between 5-20%)
Approved gift funds can cover all closing costs and down payments Many more loan program lenders and loan options
Lower credit score requirements Higher credit score requirements
Lower mortgage rates Generally higher mortgage rates
Mortgage insurance is usually required and increases your costs Mortgage insurance may not be required
Less flexible (typically offers only 15- or 30-year fixed or adjustable-rate mortgage) More flexible (many more loan types and terms)
Only available on owner-occupied properties Can be used for second homes and investment properties
Not all properties (for example, some condominiums) are approved for FHA financing Can be used on all types of property
Usually no reserve requirement Reserves may be required to qualify

What’s the Right Answer for You?

Speaking very broadly, FHA loans are a good solution for people who can’t make a large down payment (or who need help from family members or other donors to make the down payment), and who have low credit scores. People with high credit scores and who are able to make a large down payment may benefit from conventional loans, because they can be very flexible and offer a wide range of potential options. Again, though, mortgage terms and conditions can vary widely, based on your individual situation, so you’ll need to sit down with an experienced mortgage expert who can help guide you to the loan that’s right for you.

Crunch the Numbers

If you’re thinking about purchasing a home in Florida, or even refinancing an existing loan, an experienced Florida mortgage professional can help you review your financial situation and choose the best mortgage option for you. Call 407-733-6425 to learn more about the differences between FHA and conventional loans and which one is the best fit for you.


Stephen Thaggard, NMLS 356309,  Sr Loan Officer, licensed in Florida

Embrace Home Loans, NMLS 2184,, 485 N Keller Road, Suite 550, Maitland, FL 32751


First time home buyers choose FHA or VA home loans

When a FL first time home buyer chooses a licensed Realtor and begins the search for their new FL dream home; many are eager to keep as much of their savings to furnish or spruce up their new home. There are several mortgage programs with low down payment requirements and these are just two:

One of the best FL mortgage programs available with no down payment requirement is a VA Home Loan. Veterans may qualify for their first home without the need of any down payment. In fact, a seller can contribute up to 4% of the purchase price towards the Veterans closing costs, prepaid interest, property taxes and homeowners insurance. With little or sometimes no out of pocket expense, Veterans can keep more of their savings.

Another practical first time home buyer program is the use of a FL FHA home mortgage. FHA mortgages allow first time buyers to put as little as 3.5% towards a down payment. Also, sellers can contribute up to 6% towards the buyers closing costs, prepaid interest, property taxes and homeowners insurance. At a loan-to-value of 96.5%, an FHA mortgage has proven to be one of the most popular mortgage loan choices of first time home buyers.

Although there are more FL mortgage programs with little or no down payments; the VA home loan and FHA mortgage loan are a couple of the most popular choices for qualified first time buyers and Veterans. For more specific information on these mortgage loans and others, please feel free to contact me, Stephen Thaggard, at 407.733.6425 or email.

Welcome to Embrace Home Loans

My name is Stephen Thaggard, Sales Manager and Loan Officer for Embrace Home Loans in Viera, Florida.  As a Florida mortgage industry expert, with over 21 years of experience, I am passionate about finding the right mortgage solution for your needs. As an employee of Embrace Home Loans, Inc. NMLS #2184,,  I am licensed, highly trained and educated in the field of Florida residential home mortgage loans.

Here are a few types of mortgages we offer for qualified buyers:

  • Conventional – Fannie Mae and Freddie Mac
  • VA and FHA loans
  • Jumbo Loans
  • First-Time Home Buyer Programs

My focus of assisting new home Builders, Florida Realtors, and their first-time buyers, as well as seasoned home buyers, is not limited to just Brevard County, but the entire state of Florida.  Additional programs include FHA Rehab loans, Fannie Mae Homestyle Rehab loans, Freddie Mac Home Possible, and USDA loans.

Credit, stable income and savings play a large part in your overall mortgage financial success here in Florida.  Whether purchasing an existing home or building a new dream home, Florida home ownership can be an exceptional experience with the right Loan Officer on your side.

My target is to share my knowledge and experience, ensuring you are able to sail through the approval process faster, and meet or exceed your close date. Remember to speak with a knowledgeable  Florida Mortgage Professional before beginning your first or next Florida home purchase or jumping into refinancing your current interest rate and/or remaining term.

When you have doubts or questions about a FL mortgage, “get my perspective!”

Four Myths About VA Mortgages

Home mortgages guaranteed through the Department of Veterans Affairs, better known as VA mortgages, are one of the best ways for qualified veterans and military families to finance the purchase of a home. In fact, more than 630,000 veterans took advantage of the VA loan program in 2015, and another 415,000 have already used their loan benefit as of May of this year.1 With a program this popular, it’s hard to understand why some eligible veterans might not apply for a VA mortgage. Let’s look at some VA loan myths that might keep veterans from using their loan benefits:

VA loans are more expensive: In fact, nothing could be further from the truth. VA mortgages were designed to help veterans purchase homes. The fact that VA loans are guaranteed helps keep their interest rates low. According to the September 2016 Ellie Mae Origination Insight Report2, the average 30-year rate for a VA loan was 3.52 percent in September, compared to 3.73 percent for FHA loans and 3.81 percent for conventional loans.

VA loans are slow: Again, this simply isn’t accurate. VA loans that closed in September took an average of 51 days, compare to 49 days for FHA loans and 48 days for conventional loans, according to Ellie Mae. In fact, Embrace Home Loans is known to close VA loans in under 30 days

VA loans are risky: This myth stems from the fact that VA loans don’t require a down payment. In fact, VA loans have the lowest foreclosure rate of any mortgage, according to the Mortgage Bankers Association.3 As of the first quarter of 2016, only 1.24 percent of VA loans were in foreclosure. In contrast, 2.41 percent of FHA loans and 1.63 percent of conventional loans were in foreclosure.

VA loans require perfect credit: Again, VA loans are intended to help veterans, so they have much more flexible credit guidelines. Ellie Mae says the average FICO score for a VA loan to purchase a home in September of this year was 708, and many lenders will accept scores as low as 620.

Separate fact from fiction

At Embrace Home Loans, we’re experts in VA mortgage lending. We can help you understand your VA mortgage benefit, and we’ll work with you to get the financing you need for your new home. Call us today at 407-733-6425 and get the facts about VA mortgage loans.




Could a Smaller Jumbo Mortgage Be an Option?

With home prices on the rise and as the market recovers from the mortgage crisis of 2008, more people are looking for larger mortgage amounts. The Washington Post reports that 23.5 percent of mortgage loans in 2014 were jumbo loans, and jumbo mortgages were up 9.8 percent in the first quarter of 2015.

The answer for some people may be smaller jumbo loans. Smaller jumbo loans sound like an oxymoron, like “jumbo shrimp.” The term, however, applies to loans that fall between the normal conventional loan limit, $417,000, and the traditional starting point for jumbo loans, about $625,500. The reason these loans exist is that, in certain high-cost geographic areas, the normal conforming limit set by the FHA is increased. In Florida, the 2015 conforming loan limit for Collier County is $448,500, and for Monroe County, it’s $529,000. These loans may also be called “conforming jumbo” loans, “agency” loans, or “high balance” loans because they still conform to Fannie Mae and Freddie Mac guidelines for purchase.

Different Standards

Typically, non-conforming jumbo loans (those that exceed the conforming loan limits) require higher credit scores than conforming loans and a standard 20 percent down payment. That’s because the mortgage company must keep the loan on their own books rather than sell it to Freddie Mac or Fannie Mae.

Conforming jumbos, however, can still be backed by government agencies and borrowers typically pay lower interest rates, have lower down payment requirements and have lower qualification requirements (these requirements vary from lender to lender). So a first-time home buyer in Monroe County who can choose between a conforming and non-conforming loan for $529,000 might very may well choose a conforming loan backed by the FHA with a 3.5 percent down payment, rather than a 20 percent down payment. A veteran eligible for a VA loan might choose a conforming jumbo VA loan.

Know Your Options

The differences between conforming and nonconforming jumbo mortgage loans can be complex, so it’s a good idea to research your mortgage options. At Embrace Home Loans, we are experts in jumbo mortgages and can help you understand what financing may be available to you. Please browse our website for more information, or call 407-733-6425, and we’ll answer your questions about mortgages in the Sunshine State.

Tips for Central Florida Homebuyers

The housing market in Central Florida is looking up, according to, home sales shot up by 22% in August 2015, and the median home value has increased by 11% to $182,000. If you’re among the many people currently shopping for a home, here are some tips to help you:

  • Check Your Credit: A solid credit score could save you thousands of dollars in interest over the life of your mortgage. Your score is calculated by the major credit-rating agencies (Experian, TransUnion, and Equifax) based on your credit history. Borrowers with low scores usually face higher interest rates. Order a free copy of your credit report, and check it for mistakes.
  • Save up Your Down Payment: A substantial down payment saves you money by reducing the amount on which you’ll be paying interest. If your down payment is 20% or more, you may also be able to avoid private mortgage insurance (PMI). And the less you owe on your house, the more easily you’ll be able to sell it if you need to relocate.
  • Get Preapproved: A mortgage preapproval shows sellers that you’re a legitimate homebuyer. More importantly, it shows you how much you can afford, so you’re not wasting your time with homes that don’t fit your budget.
  • Plan for Your Home: Think about exactly what you need from a house. It’s tempting to get the biggest house you can afford, but that may not make sense for you. Remember, you’ll be responsible for maintenance and upkeep, and you’ll be paying for any major repairs your home needs. A popular rule of thumb says you should set aside 1% of your home’s value each year for ongoing maintenance. So if your house costs $180,000, you should plan to spend $1,800 annually on maintenance.
  • Research, Research, Research: A home is probably the biggest purchase most people will ever make. It only makes sense to research locations, schools, roads and transportation, local amenities, crime rates, and anything else that will affect you. You’ll also need to research your mortgage options, particularly if you qualify for Federal Housing Administration (FHA) or Veteran’s Affairs (VA) mortgages, down payment assistance, or other programs.

Talk to the Experts

If this seems like a lot for you to handle, talk to the experts. At Embrace Home Loans, we’ve worked in the Central Florida real estate market for years, and we can help you review your options and plan your purchase. Call us at 407-733-6425, or browse the Embrace Home Loans’ blog for more information.

HUD Houses: An Affordable Way to Buy a Home

The US Department of Housing and Urban Development (HUD) administers the Federal Housing Administration (FHA) residential lending program. The FHA helps people get low down-payment mortgages, primarily to buy single-family homes. However, when those people default on their mortgages, HUD frequently ends up owning the property, which is sold to recover the money lost on the foreclosure.

This means you’ve got a motivated seller, which can frequently lead to good deals. For example, in Florida, qualified buyers with FHA financing who plan to occupy the home may be able to pay only $100 as a down payment. HUD homes are initially offered to people who are buying the home as their primary residence. After 30 days, unsold properties are available to any buyer, including investors.

  • Take a Closer Look: HUD homes are not under warranty and HUD will not pay for any repairs, so the new homeowner will be responsible for any work that’s needed. That makes it very important to have the home inspected by a licensed home inspector to accurately determine its condition before making any offers.
  • Loans for Repair: If you’re interested in a HUD home that needs repair, the FHA offers a 203(k) rehabilitation loan that allows homebuyers to finance both the purchase and the repairs of a home with a single mortgage. Part of the loan is used to pay for the home, and the remaining funds are placed in an escrow account and are used to pay for the home repairs. Repairs must total more than $5,000, but no more than $35,000.
  • Special Programs: Some buyers may be eligible for special programs through the FHA. For example, HUD homes in designated revitalization areas may be available at reduced prices to law enforcement officers, teachers, firefighters, emergency medical technicians, and others.

Finding a home

HUD homes are listed on the official HUD website (, along with other information about buying HUD homes. At Embrace Loans, we have extensive experience in HUD homes, as well as 203(k) rehabilitation mortgages. If you have questions about qualifying for a HUD home, rehabilitation loans, or special incentive programs that may be available in Florida, call us today at 407-733-6425.

What the HomePath Program Means to You

We’ve all heard about the surge in foreclosed homes that was one of the results of the financial crisis in 2008. Some of those homes became the property of banks and other lending institutions that held the mortgages. Many others, though, became the property of Fannie Mae, one of the government entities that buys loans after they are originated.

HomePath is a program that Fannie Mae set up in 2009 that allows buyers to purchase Fannie Mae-owned properties. The agency has set up a website,, where buyers can find more information and can search for homes owned by Fannie Mae that are available for sale. These foreclosed properties can be great opportunities for Florida first-time home buyer, homeowners looking for a bigger home, people shopping for second homes, and investors.

How does it work?

The process for buying a HomePath property is similar to buying any other property. You’ll need to work with a real estate professional, since Fannie Mae only accepts offers through its network of real estate listing agents. However, there are some differences.

Remember, you are dealing with properties that have been acquired through foreclosure or forfeiture. Fannie Mae may choose to make some repairs, but many of these properties are in an “as-is” condition, and Fannie Mae will not make any repairs after settlement. As a buyer, you should thoroughly understand the condition of the property, and the cost of any repairs you may need to make. If Fannie Mae is aware of a hazard, they must disclose it to any buyers. However, as you might well imagine, with thousands of homes, Fannie Mae may not be aware of any problems. As usual, it’s a good idea to have any property thoroughly inspected by a home inspection professional.

Financing options

Homes purchased through the HomePath program can be financed like all other homes, using these available options:

  • FHA Loans: With this loan, it requires only a 3.5% minimum down payment, and all the funds needed to close can be in the form of a gift from a family member. An FHA home loan is also attractive because sellers can contribute up to 6% towards the buyer’s closing costs and prepaids, property tax and homeowner’s insurance escrows.
  • Fannie Mae: This program is available to qualified borrowers who haven’t owned a home in the last three years and can only be used to by a single-unit primary residence. Homeowners can refinance up to 97 percent of the value of their homes and can use up to $2,000 of their home’s equity to pay closing costs.
  • VA: The FL VA home loan is available with no down payment, up to $417,000 with full entitlement, has no monthly private mortgage insurance, and Sellers can contribute up to 4% towards the buyer’s closing costs and prepaids.
  • FHA 203K: Worried about the costs associated with fixing that HomePath home? The FHA 203K is a great option as it combines your mortgage and a construction loan into a single home loan. This allows you to save money on closing costs and makes the home renovation process a little less stressful.

Learn More

To find out more about HomePath properties that are available in Florida, contact us at 407-733-6425, or browse our website for more information. Embrace Home Loans has the expertise and the resources to help you negotiate the process for a HomePath home, whether you are a Florida first-time home buyer or want a second home.

Answers to Your Questions From a VA Home Loan Expert

A Veterans Administration (VA) home loan has a lot of advantages over other types of home financing. These benefits allow active-duty military personnel, veterans, and their families to save significant amounts of money when purchasing a home. How does this unique and powerful loan program work? Let’s look at some questions and answers from your Florida VA Mortgage experts at Embrace Home Loans.

Who is eligible for a VA loan?

VA loans are available for veterans, active duty military personnel, reservists or National Guard members, and some surviving spouses.

How much can I borrow with a VA loan?

In most parts of the US, qualified veterans can buy a home worth up to $417,000 with no money down. In some high-cost areas, this limit may be higher.

Is a VA loan complicated?

No! In fact, the ease of a VA loan is one of the biggest reasons borrowers choose them. You’ll need to request a Certificate of Eligibility, based on your military service, to apply for a VA loan. You can then apply for a VA home loan at any mortgage company that is VA approved. The VA home loan process has been streamlined over the years so that now it can be easier than some conventional mortgage programs.

What makes a VA loan better than other loans?

Because VA loans are backed by the government, they offer a lot of advantages, including:

  • 100% financing (no money down) for purchasing or refinancing a home (up to certain limits).
  • Closing costs are limited by the VA, and the program allows the property seller to pay most or all of those expenses.
  • Lower interest rates and monthly payments.
  • Less stringent qualification requirements and more flexibility.
  • No pre-payment penalty.
  • A streamlined refinancing, or interest rate reduction refinance loan (IRRRL) option, for homeowners with VA loans who want to refinance to a lower mortgage rate.

Do VA loans require private mortgage insurance?

Private mortgage insurance (PMI) is generally required for Federal Housing Authority (FHA) or conventional mortgages to protect the lender if the borrower doesn’t pay back the mortgage. However, because VA loans are guaranteed by the government, PMI isn’t required.

I already had a VA home loan. Can I get another?

Under certain circumstances, yes, you can have your entitlement restored to use again on another home. These include:

  • The property has been sold, you no longer own it, and you’ve paid off your previous VA loan in full.
  • A qualified veteran has agreed to assume the outstanding balance on the loan and substitute his or her entitlement for yours.
  • A one-time-only entitlement restoration for eligible veterans who have paid their prior VA loans in full, but haven’t disposed of the property securing the loan.
  • Also, many Veterans are choosing the option of renting their current VA home, and with enough remaining Entitlement, they can be eligible for a new VA home loan for their new primary home purchase.

I have a conventional mortgage. Can I get a VA loan?

Yes, you can still qualify for a VA loan if your current mortgage is not a VA loan.

Find out more

The loan experts at Embrace Home Loans are ready to help you understand your benefits as a veteran and work with you to get you a Florida VA mortgage. Call us today at 800-620-6292 for more information about VA loans and how they can benefit you.