First-time home buyers are on the rise. According to Realtor.com1, in August of 2015, 35 percent of buyers said they were first-time buyers. Jump forward to August 2016, and 51 percent of buyers identified themselves as first-time buyers. But buying a home and getting a Florida mortgage for the first time comes with a unique set of challenges. Here are some of the things first-time buyers in Florida will face:

  • Down payments: The biggest challenge faced by most first-time buyers is coming up with enough money for a down payment. For conventional mortgages, many first time buyers believe they need to come up with a 20% down payment. On a $200,000 house, that’s $40,000. However, if those same buyers pursued a mortgage that’s insured by the Federal Housing Administration (FHA), they only need a down payment of 3.5 percent. On a $200,000 house, that’s $7,000. In fact, well qualified first time buyers can consider a Conventional loan with as little as 3% towards down payment.
  • Credit scores: Mortgage lenders depend on your credit score to determine who will get mortgage loans and what rate they’ll be charged. FICO scores range from the high 300s to the low 800s, and first-time buyers often don’t have long, established credit histories. That can mean a lower score. Lower credit score buyers should consider the credit flexible FHA loan approach and perhaps even compare it to a Conventional mortgage option, although conventional programs generally require stronger credit profiles and scores.
  • Employment history: Mortgage lenders prefer borrowers who have worked for the same employer for at least two years. This can be a problem for first-time buyers, who are still establishing their careers and may have changed jobs recently. Some first time buyers may qualify for an FHA with as little as 6 months with current employer.

Know your options

At Embrace Home Loans, we work with all kinds of borrowers in Florida, including first-time buyers. We can suggest strategies that will help you meet the first-time buyer challenges, including:

  • Low-down-payment mortgages or down payment assistance programs: In addition to FHA loans, which require a lower down payment, there are a number of down payment assistance programs available in Florida.
  • Financial organization: You can improve your FICO score by staying organized, paying your bills on time, and double-checking your credit for errors.
  • Steady income: While mortgage lenders like to see steady employment, many will overlook a short job history if you can show a steady source of income that will cover your mortgage payments.

Find out more

If you’re a first-time home buyer looking for your Florida mortgage, contact Embrace Home Loans at 407-733-6425. We’re experts in mortgage lending, and we can review your financial situation and help you find ways to improve your credit, locate a loan that’s right for you, and find a new home.