When most people think of Florida, they imagine retirement central. Homes are bought in cash, and bingo is as prolific as sunblock.
But more and more first-time home buyers are looking to move the Sunshine State – particularly Southwest Florida. After all, there’s plenty of appeal here for growing families.
The Village of Estero, especially, expects to see a dramatic population boon in the next 20 years. With that comes new schools, new attractions, and plenty of new housing inventory.
Most first-time home buyers (or even second) will not be paying in cash. This is where your down payment comes in – and good advice from an experienced loan originator.
But not just a loan originator. Jeff Hedlund from Team Living The Dream Real Estate also happens to be a realtor. He and his wife, Nicole, fell in love with life in Southwest Florida. Today, they are helping people swap the snow shovel for a pool lounger.
Check out Jeff’s break down of the most popular down payment options for first-time home buyers in Florida. This way, you don’t have to wait for retirement to live the dream life.
Case in point? I wrote this by the pool.
All downpayment advice is courtesy of Jeff Hedlund of Fairway Financial Services, Inc. NMLS #: 383690, 328279.
The Classic 20% Down Payment
Pros of a 20% Down Payment
- Smaller monthly payments
- Lower principal balance means reduced monthly mortgage costs
- Better rates
- Lenders often offer lower interest rates due to lower risk
- Easier loan approvals
- Stronger financial profile enhances lender confidence
- Stronger purchase offer
- Sellers may prefer buyers with larger down payments, as it signifies financial stability
Cons of a 20% Down Payments
- Less appreciation while you save
- Waiting to save 20% could mean missing out on property value increases
- Potential interest rate increases
- Rising rates while you save could offset the benefit of a larger down payment
- Lost opportunity to invest
- Funds tied up in saving for a down payment could be used for other investments
- Less focus on the real estate long game
- Starting with a smaller down payment may allow earlier entry into the market and benefiting from appreciation over time
Other Down Payment Options (19.99% to 3%)
15%, 10%, 5% Conventional Loans
- Lower mortgage insurance costs compared to smaller down payments
- Builds equity faster than minimum down payment options
3.5% FHA Loans
- Backed by the Federal Housing Administration
- Attractive for first-time buyers with moderate credit scores
Zero% Down Payment Options
VA Loans
- Exclusive to eligible veterans, active-duty military, and their families
- No down payment, and no mortgage insurance required
USDA Loans
- For buyers in rural areas
- No down payment required, but there may be location and income restrictions
Sources of Down Payment Funds
- Savings
- The traditional method of setting aside personal funds
- Gifted funds
- Financial help from family or friends; lenders often require documentation
- Co-signer
- A co-signer can improve loan approval odds if credit or income is a concern
- 401(k) draw or loan
- Borrowing against retirement funds, though this can impact long-term savings
- Housing grants/down payment assistance
- State or local programs offering aid to first-time or low-income buyers
- Piggyback loans (80/10/10 or 80/15/5)
- A second loan covers part of the down payment, reducing the need for mortgage insurance
Interested in learning more about down payments? Make sure you reach out to Jeff and Nicole Hedlund from Team Living the Dream.
Real Estate & Loans
Team Living the Dream
We make buying and selling a home easier by handling both real estate and loans in one place— saving you time, money, and helping you live your dream sooner.
