FHA loans in Treasure Coast home purchases and refinancing are popular mainly due to the low down payment requirements, which can go as low as 3.5%. But there are other items to consider when weighing which home loan option is best.

For example, what is the final cost of the loan? 

When you’re buying a home in Florida, you have several home loan options. Two of the most popular are conventional and FHA loans in Treasure Coast. When comparing the amount you’ll pay in interest between an FHA loan and a conventional, you’ll notice that FHA interest rates fare better for buyers.

However, FHA loans have a “built-in” insurance fee that endures for the loan’s term. This is a cost you can avoid with a conventional loan once you’ve reached 20% equity. 

Generally speaking, FHA loans from Element Home Loans on the Treasure Coast are less expensive than traditional mortgage loans. Here are other factors that should be considered about FHA loans. 

Lower Interest Rates

The cost for your FHA loan will be lower than a regular mortgage since you pay lower interest rates. Rates are lower since FHA loans are backed by the Federal Housing Administration, making them a “lower risk” for lenders.

To know exactly how much you need to pay for your loan, you can use an FHA mortgage calculator usually found on your lender's website. Be sure to also review FHA qualifying guidelines for Florida. 

Loan Limits

FHA loans have size limitations on what you can borrow. As of the writing of this article, the FHA loan limit is $420,860 but it can go up significantly higher in more expensive Florida counties. 

Credit Score and Down Payment Requirements

Depending on the down payment, FHA loans often require a 580 or higher credit score. If you can put down 10%, you may qualify for an FHA loan with a credit score as low as 500.

Compare that with conventional loans, where the requirement is a minimum score of 620.

FHA loan down payment requirements is based on the borrower’s credit score. If you score 580 and above, a 3.5% down payment is required. When your score is in the 500 to 579 range, the lender may ask for a minimum of 10% down payment.

To know more about FHA qualifications in Florida, you can inquire about our home loan from Element Home Loans Treasure Coast.

Loan Uses

FHA loans can be used to buy properties with as many as four housing units. Take note, however, that FHA loans only work for owner-occupied properties. This means that you can buy a duplex, but you need to live in one of the units. 

Conventional loans, on the other hand, don’t have owner-occupancy requirements which means you can use them for a vacation home or an investment property.

Need Help With Your FHA Loan?

Compared to conventional loans, FHA loans are easier to qualify for and allow lower credit scores.

Now that you’ve figured out that an FHA loan is the best loan option for you, you need to partner with a trusted lender to help you every step of the way.

There is no one size fits all loan product out there and it can be quite challenging to figure out if a loan fits your current situation or not. For the best loan advice regarding your FHA loan, why not consult the experts?

Element Home Loans at Treasure Coast mortgage services offers excellent service and helps remove the stress throughout your home buying experience.

Get in touch with our loan officers today, they would be glad to take your call.