Do I Actually Have to Put 20% Down on a Conventional Loan in Florida?
No. You don't have to put 20% down on a conventional loan in Florida. First-time homebuyers who meet the program rules can get a conventional loan with as little as 3% down, and repeat buyers can purchase with 5% down, so more of your savings stays in the bank.
Big banks and outdated financial advice often push the "20% rule" because it limits the bank's risk. However, waiting years to save 20% means you're missing out on property appreciation and paying thousands in rent. As an independent Florida mortgage broker, AAA Capital Funding uses modern Fannie Mae and Freddie Mac guidelines to help you buy a home now while preserving your liquid cash. Here's the income needed for a $400K mortgage in Florida, if that's your price range.
How Much You Really Need Down on a Conventional Loan
1. The 3% First-Time Buyer Rule
If you haven't owned a home in the last three years, Fannie Mae and Freddie Mac consider you a first-time homebuyer. That opens up the 3% down conventional program, as long as you meet the program's credit and income rules.
2. The 5% Repeat Buyer Rule
Even if you already own a home or have purchased before, you don't need 20%. Repeat homebuyers can purchase a primary residence in Florida using a conventional loan with a minimum 5% down payment.
3. The Reality of PMI
If you put down less than 20%, you'll pay Private Mortgage Insurance (PMI). However, conventional PMI is often very cheap for borrowers with good credit, and unlike an FHA loan, Conventional PMI automatically drops off once you reach 20% equity.
Run the Math Today.
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AAA Capital Funding, Inc. · NMLS #374739 · Jason J. Sarji, NMLS #374700