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As a first-time home buyer, one step you should never ignore when buying your new home is choosing the right mortgage & mortgage broker in Florida. Two loans we recommend are:
- FHA home loans in Florida
- VA loans
Both government-backed loan options provide unique benefits that can make homeownership more accessible. But here’s a quick question; which loan option is ideal for your current financial situation?
Understanding FHA Home Loans in Florida
As earlier mentioned, FHA loans are government-backed. The Federal Housing Administration rolls out these loans to assist buyers with limited savings. The loans are ideal if:
- You have limited savings
- You have a low credit score
One highlight of FHA home loans in Florida is they only require a minimum down payment of 3.5%, and can do down to 0% when combined with downpayment assistance programs. Buyers can also benefit from them because of their lenient credit requirements.
Another good thing about FHA loans is that they support higher debt-to-income (DTI) ratios. This offers more flexibility to manage your other financial obligations.
One setback, however, is that these loans require you to provide MIP. A Monthly Insurance Premium is required even with 20% or higher downpayments. This will certainly up your monthly costs.
Understanding VA Loans
As with FHA loans, VA loans are also government-backed. The Department of Veterans Affairs offers these loans to:
- American Veterans
- Service members and their surviving spouses
- National Guard members
These loans come with many benefits. They don’t have any down payment requirements. VA loans don’t also require any PMI or MIP. They often come with lower interest rates—hard to find with other loan options. Unless you’re a veteran with service-related disabilities, you will need to pay a one-time funding fee, which can be financed with the new mortgage loan.
Understanding How FHA Loans and VA Loans Compare
VA loans and FHA home loans in Florida have many differences. Below are a few factors to consider when comparing both options:
- Eligibility criteria
- Down payment
- Credit requirements
- Private mortgage insurance
- Loan limits
- Interest rates
- Closing costs
Eligibility Criteria
One big difference can be seen in their eligibility criteria. All home buyers have access to FHA loans. All they need is to meet credit and income requirements. VA loans, on the other hand, are specifically designed for veterans and service members.
Down Payment
VA loans are generally better. Unlike most FHA loans, they don’t require a down payment. For FHA loans, at least a 3.5% down payment is required in most cases. This means higher upfront costs.
Credit requirements
Both loans come with the following credit score requirements:
- For VA loans—the minimum FICO score is 580
- For FHA loans—the minimum FICO score is 500 FICO score
Private Mortgage Insurance (PMI)
VA loans don’t require any down payment. As such, you need not worry about PMI. FHA loans require you to provide MIP even when the down payment is less than 20%.
Loan Limits
With VA loans, you won’t experience any loan limits. But you can’t say the same thing about FHA home loans in Florida. With county loan limits, you may experience restrictions on how much you get to borrow.
Interest Rates
Both VA and FHA loans offer competitive interest rates. But when it comes to choosing the better one, VA loans excel. With a reliable loan from the Department of Veterans Affairs, you’ll enjoy a more affordable mortgage over time.
VA or FHA Home Loans In Florida: Which Is Better?
Two main factors that can influence your decision here are:
- Eligibility
- Financial situation
Unless you’re a veteran, active-duty service member, or surviving spouse, you have no business considering VA loans. FHA loans are ideal for non-veterans and service members, especially first-time buyers.
Are you eligible for VA benefits? If yes, then VA loans are for you. With no PMI, no down payment, and low interest rates, these loans will certainly make acquiring your home less stressful.
Why Partner with The Doce Group?
Understand that it can be very challenging to navigate the complexities of both VA and FHA loans. To speed up the process, it makes sense to seek professional help. Experts at The Doce Group can help simplify the entire process. This mortgage company has a team of expertly trained professionals. These experts understand the nuances of VA & FHA loans. As such, they’ll guide you and help you choose a program that aligns with your mortgage needs.
You can learn more about The Doce Group’s services by checking out its first-time home buyer programs in Florida. You can also see what past clients have to say about their experience with Alex Doce at thedocegroup.com.
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