Frequently Asked Questions

Frequently Asked Questions About Mortgages in Florida

1. What is a mortgage?

A mortgage is a home loan used to purchase or refinance a property. The borrower receives money from the lender and repays the loan through scheduled monthly payments.

The borrower’s loan balance typically decreases as principal payments are made.

2. What types of mortgages are available in Florida?

Florida borrowers may have several financing options, including:

Conventional loans

FHA loans

VA loans

USDA loans

Jumbo loans

First-time homebuyer programs

Fixed-rate and adjustable-rate mortgages

Rate-and-term or cash-out refinances

The best option depends on your income, credit, available funds, military eligibility, property type, and financial goals.

3. How much of a down payment do I need to buy a home?

The required down payment depends on the loan program. Some conventional programs permit down payments as low as 3%, while FHA financing may allow a down payment as low as 3.5%. Eligible VA and USDA borrowers may qualify for financing without a down payment.

A larger down payment may reduce your monthly payment, improve your loan terms, or eliminate the need for private mortgage insurance.

4. What credit score is needed to qualify for a mortgage?

There is no single minimum credit score for every mortgage. Credit requirements vary based on the loan program, lender guidelines, down payment, debt-to-income ratio, and the rest of the borrower’s financial profile.

A higher credit score may help you qualify for a lower interest rate, but borrowers with imperfect credit may still have financing options.

5. What documents will I need when applying?

Mortgage applicants are commonly asked to provide:

Recent pay stubs

W-2 forms or tax returns

Bank and investment statements

Identification

Employment history

Documentation of other income

Information about current debts and real estate

Self-employed borrowers may need to provide personal and business tax returns, profit-and-loss statements, balance sheets, or other business records.

6. What costs are included in a Florida mortgage closing?

Closing costs may include lender charges, appraisal fees, credit-report fees, title services, title insurance, recording fees, government taxes, prepaid interest, homeowners insurance, and property-tax escrows.

Florida mortgage transactions may also include documentary stamp tax on the promissory note and a nonrecurring intangible tax on the mortgage obligation.

Your Loan Estimate will provide an itemized estimate of the loan terms, payment, and closing costs.

7. Will I need mortgage insurance?

Mortgage insurance may be required depending on the loan program and down payment.

Conventional loans commonly require private mortgage insurance, or PMI, when the borrower puts down less than 20%. PMI may later be removable when eligibility requirements are met. FHA loans generally include FHA mortgage insurance, while VA loans do not require monthly mortgage insurance.

8. How are Florida property taxes and homeowners insurance handled?

Property taxes and homeowners insurance are often included in the monthly mortgage payment through an escrow account. The lender collects a portion of these expenses each month and pays the bills when they become due.

Because Florida homeowners insurance costs can vary significantly by location, roof age, property condition, wind-mitigation features, and flood risk, insurance should be researched early in the homebuying process.

Flood insurance may also be required when a property is located in a designated high-risk flood zone.

9. What is the difference between prequalification and preapproval?

A prequalification is generally an initial estimate based on information supplied by the borrower. A preapproval usually involves a more detailed review of income, assets, credit, and debts.

A preapproval can help you understand your purchasing power and may make your offer more attractive to a seller. However, it is not a final loan approval. The property, appraisal, title, insurance, and updated borrower documentation must still meet the lender’s requirements.

10. What happens after my mortgage application is submitted?

After the application is completed, the lender reviews the borrower’s credit, income, assets, debts, and employment. The property is also evaluated through an appraisal, title search, insurance review, and any inspections required for the loan program.

The borrower receives a Loan Estimate showing the proposed loan terms and estimated costs. Before closing, the borrower receives a Closing Disclosure containing the final loan details. The Closing Disclosure generally must be received at least three business days before the scheduled closing.

Every mortgage is subject to underwriting, property approval, program requirements, and final lender approval.