Buying Your First House? Understand Your Mortgage Options

If you are a first-time homebuyer, the joy of owning your own home can be particularly overwhelming. For most people, however, the dream of becoming a homeowner is often thwarted by insufficient funds. Fortunately, there are certain programs for first-time homebuyers that you can take advantage of if you live in Florida. Here are a few. 

FHA Loans

FHA loans are offered by the Federal Housing Administration. This program allows you to pay only a 3.5% down payment (instead of the usual 20%) when purchasing your home. Even more, qualifying for an FHA loan is relatively easy, as the program is available to virtually anyone with a credit score of 580 or above. 

VA Loans

VA loans are issued by the Department of Veterans Affairs. A down payment is not required, as an incentive to help our service members be able to afford housing. The borrower does not have to buy private mortgage insurance as the government will cover part of the risk. Additionally, VA loans can come with lower closing costs than conventional mortgages. Veterans typically need a credit score of 620 or above in order to qualify. 

USDA Loans

USDA mortgages are sponsored by the United States Department of Agriculture. This program is suitable for you if you are looking to buy a home in a rural or semi-rural area. No down payment is required, as long as you have a decent credit history. To be eligible for this loan, your income should not be more than 115% of the national median. 

You also have to show that you have tried to obtain a conventional mortgage without any success. You generally need a credit score of 680 or above to secure the loan. If it is slightly lower than that, you can just pay a down payment of about 10% of the property’s value and you are all set. 


An adjustable rate mortgage, also known as a variable rate mortgage or an adjustable rate loan, is a program that relies on a predetermined index to establish its interest rate. The index is usually the one-year treasury bill, the federal funds rate, or the Libor rate. Lenders use these rates to determine how many percentage points they’ll add to the ARM rate. 

For instance, if the Libor rate is 0.5%, the lender may add 2 percentage points to get an ARM rate of 2.5%. This rate can remain constant for a certain period of time (3 years or 5 years, depending on the terms of the loan, after which it resets at regular intervals. 

Most people focus on the down payment when it comes to purchasing a home, but it is also important to consider moving and closing costs. One smart way to ensure that you are on the right track is to consult an experienced real estate lawyer. At The Law Office of Ray Garcia, P.A., our attorneys are always available to help potential new homebuyers anywhere in South Florida. Contact us today.

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Law Office of Ray Garcia, P.A.

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