A popular request for FL first time home buyers is approval for an FHA home loan.  FHA offers a low down payment of 3.5%, is more flexible with credit and Sellers can contribute up to 6% towards the buyers closing costs and prepaids (property tax and homeowners insurance escrows). But with the soon to be increasing mortgage insurance premiums associated with FHA, first time home buyers may also want to consider the advantages with a conventional Fannie Mae or Freddie Mac home mortgage loan.

Starting April 1st, 2013 , FHA will increase the annual mortgage insurance premium, which is paid in monthly payments as part of the overall mortgage payment.  Currently, with a 3.5% down payment, the mortgage insurance is 1.25% of the base loan amount.  It will increase to 1.35% on April 1st, 2013.  Also remember, FHA still requires an upfront mortgage insurance premium which is typically rolled into the loan amount.  That would be another 1.75%! Is there a better option?  Maybe…

In contrast, with good credit scores, credit history and a little more towards down payment, 5%, a FL first time home buyer could enjoy a lower monthly payment with a conventional Fannie Mae or Freddie Mac mortgage. In fact, the mortgage insurance could be dramatically lower for qualified buyers and there is no upfront mortgage insurance required, which lowers the amount borrowed.

Remember the basic three considerations for most FL mortgage loan approvals; credit, employment and savings.  The stronger your credit history and scores; the more stability in your employment; and the more money you have saved towards your first home purchase – the better.  With these basics, you may have more mortgage options to choose from; may enjoy a lower interest rate; and increase your opportunity for your FL mortgage loan approval.

If you have questions on qualifying for your FL first mortgage loan; please feel free to email or call 800.333.3004 extension 3560.

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

Embrace Home Loans, NMLS 2184,  5500 Murrell Road Suite 201, Viera, FL 32940