(Mar 20, 2023)
In the sections below, we have covered more about FHA loans and how you can apply for one in Gilchrist County. We have also rounded up some fun outdoor activities you can enjoy with your family once you decide to reside in this part of Florida.
What are FHA Loans
An FHA loan is a home mortgage insured by the federal government through the Federal Housing Administration. This means that FHA protects lenders such as banks if borrowers default on the loan terms.
FHA loans are designed to help low and moderate-income earners who find it challenging to borrow mortgages from other private lenders.
Are you a Hometown Hero? Find out your eligibility for the Hometown Heroes Loan Program in Gilchrist County, Florida.
Who Qualifies for FHA Loans
FHA loans come with a set of eligibility requirements that borrowers must satisfy. Typically, FHA loans have 'floor' and 'ceiling' limits.
These figures vary per State and County, but the rough estimate is that the floor limit is 65% of the area's conforming loan limit, while the ceiling limit is 150% of the conforming loan limit.
In Gilchrist County, the 2022 floor limit (loan limit for single-family homes) is $420,680, while the ceiling limit (loan limit for a four-family unit) is $809,150. Below are the other FHA loan requirements.
Credit Score Requirements
Your credit score determines your creditworthiness based on your past credit histories, such as your loan repayment, the amount borrowed, duration of the loan, etc.
Your credit score will typically lie between 300 and 850. The higher your number, the more the chances of securing a loan.
FHA mortgages usually allow a credit score as low as 500, which is way lower than the 620 required for conventional mortgages. In addition, your credit score will also determine the amount of down payment your lender will require you to pay.
Down Payment Requirements
A down payment is a portion/percentage of your property's purchasing price that you must pay upfront when closing your home loan.
According to FHA guidelines, the minimum down payment is 3.5%. However, this could go as high as 10%, i.e., if your credit score lies between 500 and 579.
Debt to Income Ratio
The debt-to-income ratio (DTI) compares your monthly debt repayment to your gross monthly income. Lenders use the DTI ratio to determine your ability to repay your loan. The lower your DTI ratio, the higher your chances of being considered for a loan.
For FHA loans, 43% is the highest allowed DTI ratio a borrower can have to qualify for a mortgage. However, some lenders may accommodate borrowers with a higher DTI ratio if they have an excellent credit score.
Income Requirements
The FHA-insured loan has no minimum or maximum salary that could prevent you from qualifying for the mortgage. You will need your most recent tax returns, investment status, and paychecks to prove this.
More important is a steady income for the past couple of years and proof that you can make payments in the future. In addition, you will be required to have a minimum of two well-established credit accounts, such as credit cards and cash accounts, that can pay the down payment.
Besides the financial documents, the other documents required when applying for an FHA mortgage include valid government identification documents such as ID, passport, or driver's license. A valid social security number will also be required.
Property Requirements
Besides meeting the above requirements, the property to be purchased must also meet some conditions. These include:
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The property shouldn't be a house flip, i.e., the home shouldn't have changed ownership in the last 90 days.
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Once you purchase the property, its title should be under your name or that of a living trust settlement.
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The property should be residential, i.e., occupied by at least one borrower within sixty days of closing the loan.
- The home can be a single-family or a multi-family property of up to four units where the borrower must occupy one.
FHA Loan Mortgage Insurance
When buying a home through a lender, you must always pay mortgage insurance unless you have made at least a 20% down payment. With an FHA loan, the lender will charge you a mortgage insurance premium (MIP), which in most cases is higher than the other mortgage products.
The FHA MIP features an upfront fee (1.75% of the loan amount) and an annual fee that varies based on the loan terms, size, and the loan-to-value ratio. As the loan amount and the LTV increase, the annual MIP also increases. More often, this yearly rate varies from 0.45% to 1.05%.
Borrowers who don't have the 1.75% upfront fee often roll the cost to the loan balance, increasing monthly payments. FHA MIP is payable until you have built at least 20% equity in your home.
How to Apply for FHA Loan in Gilchrist County, Florida
You'll need to follow several procedures when applying for an FHA loan. One important thing to note is that your source of income and financial status will largely determine whether you'll be considered for the loan.
Before getting started with the process, it's always advisable to prepare in advance so you can boost your odds of passing pre-approval and the underwriting process.
A rule of thumb is to have money deposited in your bank account and let it sit for at least 60 days. If you don't have a working/active bank account, you want to get a checking or savings account, which the FHA will use as proof of monetary deposit.
And while you can transfer the money into the account using any method, such as cash deposits, wire transfers, or checks, you must always substantiate the source of the deposits so the lender can count it during pre-approval.
That said, below is a step-by-step FHA loan application process.
Find a Reputable Lender
The first step when applying for an FHA loan is finding a reputable FHA-approved lender. FHA financing is available from banks, credit unions, mortgage brokers, and online lenders.
Choosing the best lender is a matter of researching and comparing the loan terms and rates from various lenders.
Knowing what you want and understanding your financial standing are essential when exploring options. Ideally, you want to pick a lender that meets your unique needs.
For instance, if your credit score is below 600, not all lenders will readily accept your application. Similarly, some will only accept borrowers with a higher down payment and low debt-to-income ratio.
Begin the Application Process
Once you have identified a lender, your next step is to prepare to submit the loan application. The process often begins with a simple pre-qualification. Here, you'll submit a few details about your income, active debts, and the loan amount you want.
If you pass the pre-qualification, you'll proceed to pre-approval. This is often a more thorough process requiring a hard credit pull and personal and financial documents submission.
Some documents often requested by lenders include W2s and tax returns, bank statements (from the previous two months), financial statements, proof of income, and recent pay stubs. The lender will also require personal details to pull the credit reports and check your credit score.
House Hunting
After applying for the loan, the lender will provide a loan estimate within three working days. This document shows the borrower's estimated interest rate, closing costs, and monthly mortgage payments.
If you are okay with the loan estimate and have passed pre-approval, the lender will give you a certificate of pre-approval, which you'll use during house hunting.
Working with your agent, you'll find an FHA-approved property, negotiate the home pricing and reach an agreement. Where possible, you want to find a seller who can agree to pay a portion of the closing fees. You'll then sign a purchase agreement and proceed to schedule a home inspection.
Underwriting
If the property passes the inspection process, the next step is underwriting. Here, the lender may require additional information about your income, whether to prove your source of income, to know who offered you the gift money, etc. This is quite common underwriting and shouldn't be a cause for concern.
Closing
Once your loan application passes underwriting, you are set to close. Your agent will communicate with the seller, the lender, and the title company to schedule a closing date.
After closing, you'll be required to move into the property within 60 days. You'll assume ownership of the property right away and will be responsible for the mortgage.
Benefits of FHA Loans
FHA loans are a popular home financing option, thanks to their many benefits, especially for borrowers with a low credit score. Credit qualifications are often less strict than conventional loans, and the interest rates are more flexible.
If you've had some major credit event, such as a foreclosure or bankruptcy, and you meet all the FHA requirements, you won't have to wait as long before you can qualify for a mortgage. This isn't often the case with conventional loans.
Here are the other reasons why FHA loans are so attractive.
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You can qualify for a loan with a higher DTI. The standard DTI is 43%, but some lenders can stretch beyond this, provided you have compensating factors, such as an excellent credit score and significant savings.
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It allows for seller concessions. The seller can contribute towards the closing costs, i.e., up to 6% of the sales price. Closing costs comprise property taxes, homeowners insurance, title insurance, escrow and lender fees, etc.
- You can use gift funds from family, an employer, close friends, a union, or government down-payment assistance programs. These programs can come from grants, forgivable loans, low-interest loans, or deferred-payment loans. A perfect example is Florida down payment assistance programs offered by Florida Housing. This option allows borrowers to qualify for up to $10,000 down payment assistance.
5 Family Activities You Can Enjoy in Gilchrist County, Florida
Now that you know how to apply for an FHA loan and the minimum requirements you must meet, let's see if Gilchrist County is a great place to call home. Ideally, you want to reside in a peaceful neighborhood with friendly locals and plenty of fun and family-friendly activities.
In the sections below, we have highlighted five outdoor activities you and your loved ones can explore in Gilchrist County.
Try Out a Mexican Dining Spot
If you want to take your entire family out for lunch or dinner, there are plenty of great restaurants in and outside of Trenton.
One popular dining spot is the El Taco Regio, a local restaurant specializing in Tacos and Mexican cuisine. The eatery is kids friendly, and the menu features some signature dishes you won't probably find anywhere else.
Similarly, lunch specials are served every day from 11.00 am to 3 pm, so you are never late for those spicy beef tacos or chicken burritos. Another popular Mexican café is the Elle Cocina, which offers incredible Spanish food at affordable prices.
You can also try the many Italian, Chinese, or regular American Barbecue spots in your family dine-out based on your preferences.
Visit the Gilchrist Blue Springs State Park
Gilchrist Blue Springs is a famous State Park in Gilchrist, with several fun activities ideal for your entire family. The park is affordable as it charges per car, unlike most private parks that charge per person.
This park offers several recreational activities, from swimming and tubing to camping and hiking. You will also take cute pictures of different animals inside the park. Picnic tables, covered areas, grills, and restrooms are conveniently available.
The park is quite popular among locals and tourists, so that it could be busy during weekends and holidays. The main spring inside the park is the Gilchrist Blue spring, where you can swim comfortably.
Others include Johnson Spring, Little Blue Spring, and Naked Spring, which may or may not be open depending on the seasons or time of the year.
Paddle the Santa Fe River
The Santa Fe River features a 26-mile scenic paddling trail that curves past hardwood hammocks and beautiful riverside vegetation.
The trail is suitable for beginner, intermediate, and expert kayakers, depending on the water levels. You can beat the traffic by visiting this river on weekdays or during the pleasant winter months.
When planning a paddling trip in the Santa Fe River, choose a trip length you are comfortable with, for instance, a three-mile (90-minute) trip, seven-mile (3-hour) trip, or the longest 15-mile, 8-hour trip.
If you time those months with strong currents, you could do up to 15 miles in less than 6 hours without feeling exhausted. You can also make stopovers to explore a dozen springs, hardwood forests, and oak trees.
This will primarily depend on who you are paddling with. When kayaking with your kids, perhaps you should choose a shorter, more manageable trail.
Tour the Gilchrist County Springs
Gilchrist County is home to several springs, from the privately-owned Ginnie Springs to the beautiful Hart Springs alongside the famous Suwannee River.
Other springs include the Lumber Camp Springs, Sung Springs, Bell Springs, and Lilly Springs, located in various parts of the County. Most of these springs have moderate depth; hence they are ideal for intermediate to expert swimmers and divers.
If you are on a budget, a spring located inside a state park would be a good alternative; otherwise, you can choose a privately owned spring that's not congested and with on-site guides and safety personnel.
Regardless of your needs, you'll always find a great spring where you and your entire family can spend some fun time together.
Explore the Butterfly Rainforest – Florida Museum of Natural History
The Butterfly Rainforest is located 27 miles from Gilchrist County – the Florida Museum of Natural History, located on the UFL (University of Florida) Campus in Gainesville. The museum is one of the country's top five natural history museums featuring hundreds of free-flying butterflies and bird species from across the globe. Also, unique species of fish and turtles call this museum home.
Most vegetation in the Rainforest museum is tropical trees and multi-variegated flowering plants found near waterfalls and walking paths. This makes this Rainforest a must-visit exhibit for nature lovers. The museum fees vary per age; for instance, seniors and children/teens pay less than adults.
Bottom Line
To boost your odds of success and ensure a smooth application process, you want to have all your financial documents ready. Once you have identified a lender to work with, the loan officer will walk you through the loan application process. And assuming you meet all the requirements, you'll be on your way to becoming a homeowner.
Gilchrist County, Florida offers many growth opportunities for young families, and most importantly, you'll have several outdoor activities to enjoy with your loved ones. Get pre-approved today and make your homeownership dream a reality.
(Mar 20, 2023)
