Choosing the right mortgage type can save you tens of thousands of dollars over the life of your loan. Here's a clear breakdown of the most common mortgage types available to Florida homebuyers.

Conventional Loans

Conventional loans are not insured by a government agency. They are the most common type of mortgage in the U.S.

  • Down payment: As low as 3% for first-time buyers; 5–20% for others
  • Credit score: Typically 620+ (720+ for the best rates)
  • PMI (Private Mortgage Insurance): Required if down payment is less than 20%; can be removed once you reach 20% equity
  • Loan limits (2024): Up to $766,550 for single-family homes in most Florida counties (conforming loan limit)
  • Best for: Buyers with good credit and the ability to make a larger down payment

FHA Loans

FHA loans are insured by the Federal Housing Administration and designed to make homeownership more accessible.

  • Down payment: 3.5% with 580+ credit score; 10% with 500–579 credit score
  • Mortgage Insurance Premium (MIP): Upfront MIP (1.75% of loan amount, financed into the loan) plus annual MIP (0.55% or higher depending on loan terms) — MIP lasts the life of the loan if down payment was less than 10%
  • Loan limits: Vary by county; in Broward County, approximately $524,225 for single-family (2024)
  • Best for: Buyers with lower credit scores or limited down payment; first-time buyers

VA Loans

VA loans are guaranteed by the U.S. Department of Veterans Affairs and available to eligible veterans, active-duty service members, and surviving spouses.

  • Down payment: $0 (no down payment required)
  • PMI: None — a major benefit; instead, a one-time VA Funding Fee is charged (waived for veterans with service-connected disability)
  • Credit score: No VA minimum; most lenders require 620+
  • Best for: Eligible veterans and military — one of the best mortgage programs available

USDA Loans

USDA Rural Development loans are designed for eligible rural and suburban areas. Most of Broward County does not qualify due to population density, but some areas of western Broward may be eligible.

  • Down payment: $0
  • Income limits: Must be at or below 115% of the area median income

Jumbo Loans

Jumbo loans exceed the conforming loan limits (above $766,550 in most of Florida for 2024). In South Florida's high-priced market, many buyers need jumbo financing.

  • Down payment: Typically 10–20%+
  • Credit score: Typically 700+ required
  • Reserves: Lenders often require 6–12 months of reserves
  • Rates: May be slightly higher than conforming rates but not always

Fixed-Rate vs. Adjustable-Rate Mortgages (ARM)

  • Fixed-rate: Interest rate is locked for the life of the loan (15 or 30 years). Predictable payments. Best when rates are low or you plan to stay long-term.
  • Adjustable-rate (ARM): Interest rate is fixed for an initial period (e.g., 5, 7, or 10 years), then adjusts annually based on a market index. Initially lower rates — can be advantageous if you plan to sell or refinance before the adjustment period begins.
Which Loan Is Right for You? The best mortgage depends on your credit score, down payment, military status, income, and how long you plan to stay. Always get quotes from at least 3 lenders and compare both interest rates and total closing costs. HP Singh can refer you to trusted local lenders with strong track records in Broward County.
Questions about your situation? Contact HP Singh at Coastal Group Brokers.