First time home buyers here in Florida are usually focused on qualifying for the ever popular FHA home loan.  With all of  the recent changes for FHA home loans; it’s refreshing that many FL home buyers are now turning their eyes to the advantages of a conventional Fannie Mae or Freddie Mac backed mortgage. 

Earlier this year, the private mortgage insurance for an FHA borrower increased to 1.35% of the loan amount; making qualifying a bit more difficult with slightly higher monthly payments.  This increased was dwarfed by the news that starting June 3rd, the monthly mortgage insurance paid on an FHA loan will remain in effect for the life of the loan (assuming the minimum down payment of 3.5%).   The amounts to thousands of dollars spent over the life of the loan.

More and more FL home buyers are not starting their home shopping or new FL home construction, until they compare an FHA approach with a conventional Fannie Mae loan.  With a down payment of  only 5%, the advantages with the conventional Fannie Mae option are clear.

  • Save thousands and begin with more equity. FHA charges 1.75% as a financed  upfront mortgage insurance
  • Enjoy lower payments. The mortgage insurance can be half as much than FHA for qualified buyers
  • Future reduction in payments.  The mortgage insurance can eventually be dropped with sufficient equity. 
  • Short on funds for down payment? Gifted funds from family members are acceptable

With good credit and credit scores it pays to look at all your options when seeking to purchase or build your first or next FL home.  Who knows? You could even qualify and enjoy all the benefits of a conventional Fannie Mae loan.