Mortgage Guide
Understand your loan options before you shop.
The right loan can change what you can buy and what you'll pay every month. Here's a plain-English overview of the most common options in Florida.
By Dawn Spencer · Last updated
Compare Loan Types
The main loan programs at a glance
| Loan | Minimum down payment | Mortgage insurance | Good fit for |
|---|---|---|---|
| Conventional | As low as 3% for some buyers; 20% avoids mortgage insurance | Private mortgage insurance (PMI) below 20% down; can be removed later | Buyers with solid credit and steady income |
| FHA | 3.5% with a 580+ credit score | Upfront and annual mortgage insurance premiums | Buyers rebuilding credit or with smaller savings |
| VA | 0% for eligible borrowers with full entitlement | None; a one-time funding fee (some veterans are exempt) | Veterans, service members, and eligible surviving spouses |
| USDA | 0% in eligible areas | Upfront and annual guarantee fees | Moderate-income buyers in eligible rural and suburban areas |
| Jumbo | Varies by lender, often 10% to 20% | Varies | Luxury purchases above conforming loan limits |
Program rules, limits, and fees change. Your lender's Loan Estimate is the final word on your numbers.
VA loans
- No down payment and no monthly mortgage insurance for eligible borrowers
- Funding fee can usually be financed; veterans receiving VA disability compensation are exempt
- VA appraisal checks minimum property requirements
- VA loans are assumable, which can be an advantage when you sell
VA & military buyers · VA.gov home loans (opens in a new tab)
FHA loans
- 3.5% down with a 580+ credit score
- Flexible on credit history and debt ratios
- FHA appraisal includes minimum property standards
Florida down payment help
Florida Housing Finance Corporation (opens in a new tab) offers first mortgage programs and down payment and closing cost assistance for qualifying buyers, including the Hometown Heroes program for eligible workers, service members, and veterans. Funding opens and closes, so check current availability.
Florida Housing Finance Corporation (opens in a new tab)
Before you apply
- Get Loan Estimates from more than one lender and compare them
- Ask about rate locks, points, and lender credits
- Budget for taxes, insurance, and HOA dues, not just principal and interest
- Don't open new credit or change jobs before closing
Your Monthly Payment
What goes into a mortgage payment
Your monthly payment is usually four parts, often called PITI, plus any HOA or CDD fees. Try the Florida True Cost Calculator to add them up for a specific home.
- Principal and interest on the loan (see the table below)
- Property taxes: your home's taxable value times your local millage rate, divided by 12. Look up the current taxes on the county property appraiser's site, and remember the seller's homestead exemption doesn't transfer to you.
- Homeowners insurance (and flood insurance where needed), divided by 12. Get real quotes early.
- Mortgage insurance: PMI on conventional loans under 20% down, or FHA's annual MIP
Principal and interest per $100,000 borrowed (30-year fixed)
| Interest rate | Per $100,000 | On a $360,000 loan |
|---|---|---|
| 5.5% | $568 | $2,044 |
| 6.0% | $600 | $2,158 |
| 6.5% | $632 | $2,275 |
| 7.0% | $665 | $2,395 |
| 7.5% | $699 | $2,517 |
Rates shown are examples to illustrate the math, not current rate quotes. Each half-point of rate changes the payment by roughly $32 to $34 per $100,000 borrowed.
Conventional loan details
- As little as 3% down through programs for first-time and moderate-income buyers
- PMI applies under 20% down. You can ask to remove it at 80% of the original value, and it ends automatically at 78% on schedule
- Credit score and down payment both affect your rate and PMI cost
- Seller contributions are capped: 3% of the price with less than 10% down, 6% with 10% to 25% down, 9% with more than 25% down (primary residence)
FHA loan details
- Upfront mortgage insurance premium of 1.75% of the loan, usually financed
- Annual MIP, paid monthly, for most 30-year loans is 0.50% to 0.55% of the balance
- With less than 10% down, MIP lasts the life of the loan; with 10% or more, it ends after 11 years. Many buyers later refinance to drop it
- Seller contributions up to 6% of the price
- FHA loan limits are set by county each year; your lender will confirm the current Duval, St. Johns, Clay, or Nassau limit
Rate buydowns, explained
A buydown lowers your interest rate in exchange for money paid up front, often by a seller or builder as a negotiated concession.
- Permanent buydown (points): each point costs 1% of the loan amount and lowers your rate for the life of the loan. Ask your lender how many months it takes to break even.
- Temporary 2-1 buydown: your rate is 2% lower in year one and 1% lower in year two, then returns to the note rate. You qualify at the full rate.
- Builder incentives: builders often fund buydowns when you use their affiliated lender. Compare the full offer with an outside lender's Loan Estimate before you choose.
- Seller-paid buydowns count toward each loan program's seller contribution limit.
USDA loan details
- No down payment in eligible areas, which include some outlying parts of Northeast Florida
- Household income limits apply
- Check a specific address on the USDA eligibility map (opens in a new tab)
Ready for a Pre-Approval?
Talk with a lender
I'm glad to introduce you to experienced local lenders, including our affiliated mortgage company, Hi Home Loans (NuView Mortgage, NMLS 1876725) (opens in a new tab). Comparing more than one lender is always smart.
Affiliated business disclosure: Hi Home Loans (NuView Mortgage) and Hi Real Estate are affiliated companies under common ownership, and I may benefit from that relationship. You are never required to use an affiliated lender, and you are free to shop for and choose any lender.
Down payment and closing-cost help
Before you assume you need 20% down, check what's available: Florida and local programs, employer and profession-based grants, and tax credits.
What's the difference between pre-qualification and pre-approval?
Pre-qualification is a quick estimate based on what you tell a lender. Pre-approval means the lender has reviewed your documents and credit, which makes your offer much stronger.
What credit score do I need for an FHA loan?
FHA allows 3.5% down with a credit score of 580 or higher, and 10% down with scores from 500 to 579. Individual lenders may set higher minimums.
Can I use a VA loan more than once?
Yes. VA entitlement can be restored after a VA loan is paid off, and in some cases you can have more than one VA loan at a time. A lender can review your Certificate of Eligibility.
What is a Loan Estimate?
A standard three-page form every lender must give you within three business days of your application. It shows your rate, monthly payment, and closing costs, so you can compare lenders side by side.
This guide is general education, not lending advice or a commitment to lend. Dawn Spencer is a real estate sales associate, not a mortgage loan originator.
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Dawn Spencer, REALTOR® · Hi Real Estate