This is a challenging time to shop for a home with respect to logistical considerations. But it is also a time when you can take advantage of a market with fewer competing buyers.
Along with needing to conduct a lot of the business of buying a home over the internet and phone and not in person, you might also face challenges such as:
- Not having the ability to make a large down payment.
- A reduction in your income impacting how much home you can afford.
- A decline in your credit score if you have fallen behind on some recent bills.
- Difficultly meeting the expectations of the traditional loan process because of uneven income.
What type of mortgage is most suitable for helping you circumnavigate these issues and successfully and affordably purchase a home in Florida currently?
There is no one right answer to this question. Several different mortgage products could potentially be ideal, depending on your specific circumstances.
Types of Loans for Home Buying
- Conventional loans
If you still have a solid credit score, one type of mortgage you could consider is a conventional loan.
There are a couple of reasons why conventional mortgages may be beneficial at this time. For starters, they are common. Lenders are generally efficient with processing them. So, you may have your pick of a wide range of offers and applying for a conventional loan could be fast and easy.
For another thing, conventional loan down payments can be quite low if your credit score is reasonably high. In fact, you might only need to put 3% down on a home you purchase with a conventional mortgage in Miami.
So, if money is a little bit less liquid than usual right now but you want to move into a home immediately, a conventional mortgage could be a suitable option.
- FHA loans
What if you cannot afford a large down payment, but your credit score has taken a hit during these challenging times?
If that is your situation, an alternative to a conventional mortgage might be an FHA loan in Miami insured by the Federal Housing Administration.
You can qualify for a down payment as low as 3.5% with an FHA mortgage, even if your credit score is as low as 580. If your credit score is between 500 and 579, you could qualify for a down payment as low as 10%.
The thing to know about FHA mortgages, however, is that they do require you to pay for mortgage insurance.
So, you will need to be able to afford that ongoing payment if you want to purchase a home with this type of loan.
Even with this additional expense, however, FHA loans tend to be affordable because they have competitive interest rates.
- VA loans
If you are shopping for a home right now as a veteran, active-duty military member, or eligible surviving spouse, the first type of mortgage you should investigate is a VA loan.
This type of mortgage is backed by the Department of Veterans Affairs.
The advantages of VA mortgages are numerous. Like FHA loans, they have low credit qualifications and competitive rates.
Unlike FHA mortgages, however, they do not require you to pay for mortgage insurance each month.
Also, there is no lower down payment option you are going to find, because VA mortgages do not require you to make a down payment at all.
So, even if you cannot afford a down payment right now at all, have had issues with your credit score, and cannot afford to pay high interest rates, you can move into a home now with a Miami VA loan.
VA mortgages have many other financial benefits as well. We can tell you more about them during your home loan consultation.
- Hard money loans
Another option worth considering with a low credit score is a hard money loan in Miami. With this type of mortgage, rates are usually less competitive. But this type of loan is easy to qualify for and fast and easy to process.
- Stated income loans
If you are having a difficult time getting through the traditional loan application process because of income changes this year, you may find that using our alternative stated income loan process facilitates the rapid and simple processing of your mortgage application.
Buy a Home Affordably in Miami, FL Today
COVID-19 has created challenges for many home buyers in Florida in the form of reduced income and credit scores as well as lower availability of funds for down payments.
But as you can see, there are many different lending products which can help to meet your needs and get you into a new home in Miami or the surrounding region quickly, easily and affordably at this time.
To find out what type of mortgage is ideal for you, get started today by giving us a call at 786-220-1100 to schedule your consultation. With our large network of lenders throughout the state, we can connect every Florida homebuyer with a suitable home loan.