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FHA Loan in Osceola County, Florida: Learn About the Low Down Payment Options

Are you an Osceola County, Florida homebuyer? You may have heard about FHA loans requiring lower down payments and more flexible income and credit guidelines than other government-backed mortgages. It allows you to purchase your dream home with down payments of as little as 3.5 percent of the purchase price.

This is a plus for first-time homebuyers compared to conventional loans that typically require 20% down to secure the best interest rates and lowest mortgage insurance premiums.

If you're ready to buy a home in Osceola County, Florida, an FHA loan could be your key to affordable homeownership. But you might have questions about the program, primarily if you've never dealt with it. One of the most common concerns with FHA loans is the 3.5% down payment requirement.

This article will explore everything you need to know about FHA loans, including the 3.5% down payment, down payment assistance programs from Florida Housing, loan limits, utilizing cash under the mattress for closing costs, and more fantastic things about Osceola County, Florida. Read on to find out more.

Basics of FHA Loans

An FHA loan is a mortgage insured by the Federal Housing Administration (FHA). The loan is widespread, especially among first-time home buyers, because it allows down payments of 3.5% and credit scores of 580+. However, borrowers must pay mortgage insurance premiums, which protects lenders if a borrower defaults.

To qualify for an FHA loan, you must have a good credit score and a steady income. On the other hand, there are limits to how much you can borrow, and you must be able to prove that you can afford the monthly payments.

Additionally, to take advantage of the 3.5% down payment if you must meet the requirements of a first-time homebuyer who hasn't owned any other properties in the last three years.

Below are more essential things about FHA loans you need to understand before gathering your paperwork for the loan application.

The 3.5% Down Payment

The minimum down payment for an FHA loan is 3.5%. This low-down payment option can make homeownership more attainable for first-time homebuyers or those with limited funds. This means you can get 100% home financing with a much lower down payment than a conventional loan.

However, it's essential to remember that you'll also need to pay closing costs, mortgage insurance premiums, and other upfront expenses when taking out an FHA loan.

Mortgage insurance protects the lender against loss if you default on your mortgage and your home goes into foreclosure. With an FHA loan, borrowers should carry two types of insurance—mortgage and hazard—to cover their obligation. Mortgage insurance protects the lender against loss if you default on your mortgage and your home goes into foreclosure; hazard coverage protects against damage due to natural disasters such as hurricanes and floods.

Payments for mortgage insurance premiums are calculated and paid with your interest and principal payments. Rates will vary depending on how much you put down on the home; if you put less down, your MIP will be higher. For example, if you put 3.5% down, your MIP will be 1.75%. If you put 10% down, your MIP will be 0.85%.

Down Payment Assistance Programs

Several down payment assistance programs available through the Florida Housing Finance Corporation can make starting your homeownership journey in Osceola County easier. Depending on your income, you may be eligible for one or more of these programs that assist you with the down payment and closing costs on your mortgage.

This can help ensure you don't have to pay an arm and a leg to get into your new place. Here's what you need to know about FHA down payment assistance programs from Florida Housing.

Basic eligibility is based on your household income and credit history, but this can vary by state and program. Many programs require an application, and on occasion, you may need to take a training course on how to obtain a mortgage or handle your finances. Every plan provides different levels of financial assistance. Some offer a percentage of the purchase price, while others base it on a predefined dollar amount.

One popular program that assists with the down payment on FHA-insured loans is the FL Assist Program, which offers up to $10,000 for a down payment and closing cost assistance. The program is not available to home buyers who already own property or plan on buying more than one property, as it is available only to qualified first-time home buyers.

If you meet the eligibility requirements, this second mortgage program will offer you the following benefits:

  • 0%, non-amortizing, deferred second mortgage.

  • You can qualify for up to $7,500 with a conventional loan and up to $10,000 with an FHA or USDA-RD loan (effective since June 1, 2021).

  • As long as you qualify for the FL First Mortgage Loan Program (FHA, USDA-RD, or Fannie Mae HFA Preferred) in any county, you'll automatically qualify since this isn't a stand-alone second mortgage program.

Other assistance programs are designed for military members, veterans, surviving spouses, and home buyers in certain areas. The state, local governments, private lenders, and non-profit organizations may also be able to help you with your down payment. In some programs, you don't have to repay grants or loans.

In others, you get an interest-free loan and may be forgiven if you live in the house for several years. A high credit score, a steady income, and an excellent debt-to-income ratio (DTI) are required by some assistance programs.

Is Cash Under the Mattress Usable for an FHA Loan?

If you are planning to buy a house with an FHA loan, the biggest question is whether you can use cash under the mattress for your down payment and closing costs when applying for an FHA loan. Will your bank account be assessed? If not, what's the best way to qualify for an FHA loan? Read on to find out the answers to these questions and more in this expert guide on using cash under the mattress for an FHA loan.

Keeping cash under the mattress can pose serious problems. Besides counting as secret money that can adversely impact your FHA loan approval, it also represents one of the worst places to save funds due to several disadvantages.

When financing an FHA-insured loan, the Federal Housing Administration and other federal institutions that back mortgages do not accept cash value as a qualified payment source. They do this to ensure these government-backed loans aren't used as money laundering schemes.

The trouble with mattress money or stashing money in hidden places in your home is that there's no paper trail. Your lender can't verify where the cash came from, when you started saving it, or whether it's part of your regular savings routine.

One of the main reasons for loan rejections or delays is the lack of proof that you can pay the mortgage closing costs with mattress money. Therefore, you must present evidence of regular income and savings to lenders before a loan is approved.

Lenders will not be impressed by cash stored under your bed; they want proof that you have a track record of managing your finances responsibly. An excellent place to start is opening up a checking account or bank and depositing all your savings there. It might seem old-fashioned, but banks are still very much in business because they provide tangible evidence of funds available for loans.

If you have money in the bank that you want to use for the down payment and don't want it to affect your qualifying ratio, make a quick cash deposit in a bank three months before you close. This will help you have mature funds in your bank account, and no substantial deposits will show up in your savings account when the lender examines your bank statements.

You can deposit the cash under your mattress into a bank account through an ATM that accepts cash deposits, your local bank, or log into your online banking account and make a deposit.

New homebuyer signing a contract to buy home

Family-friendly Activities in Osceola County, Florida

Osceola County is the perfect place to raise your family, and you'll find no shortage of fun and exciting things to do with your kids in this vibrant county. Whether you have energetic children or more mature youngsters, Osceola has many family-friendly activities, ranging from educational to entertaining and entertaining to awe-inspiring things to make your day truly memorable.

Whether you're searching for an exciting weekend with your kids or want to escape the mundane, check out the following eight family-friendly activities to try in Osceola County.

Visit the Fun Spot America in Kissimmee

Fun Spot America is the perfect place for a day of thrills and spills with the family. The park features a variety of rides and attractions, including go-karts, bumper cars, an arcade, a gator spot, coasters, and a Ferris wheel for everyone in the family to enjoy. This spot is conveniently located near all the major attractions in Kissimmee. So whether you're looking for a day of fun or a break from the parks, Fun Spot America is the place to be.

If your little ones are too young for go-karts, don't worry, the park has plenty of other activities for them to enjoy. And don't forget about the variety of food options available at the park. You can even preorder your food on their website so it will be ready when you arrive at the park.

Visit The Disney Wilderness Preserve

The Disney Wilderness Preserve is a great place to take the family for a day hike or nature walk. There are plenty of trails to explore, and you might even see some wildlife along the way. Plus, it's a great way to get some exercise and fresh air. You can make this trip any time of year, as there is no entrance fee and the preserve never closes. It's open from sunrise to sunset daily, so head on over today.

The preserve has more than 1,000 species of plants and animals from all over the world - perfect for animal lovers. See your favorite critters up close and personal in their natural habitats. From giraffes to tigers, all your favorites are here. A visit to The Disney Wilderness Preserve will be educational and exciting for kids and adults alike. It contains 3,500 acres of restored wetlands that capture rainwater, filter nutrients and replenish groundwater.

Osceola County Historical Society Pioneer Village

A visit to Osceola County Historical Society Pioneer Village will give you a natural feeling of what it was like to live in Florida over 100 years ago. With historical buildings housing antique farm machinery and tools, you can enjoy an outstanding educational experience while having fun taking a ride on an authentic steam train. All ages are welcome, but an adult must accompany children under 12.

Discover the remarkable past of Shingle Creek Regional Park during your visit to Pioneer Village. You'll get to visit dwellings of some of Osceola County's earliest settlers restored to appear as they would have in the late 19th century. At the Seminole Settlement, you'll see how Florida's natives lived off the land. Nature lovers can hike, bike, paddle through the trails, and get in touch with Florida's landscape.

Spirit of the Swamp Airboat Rides

Spirit of the Swamp Airboat Rides is a great way to spend time with the family while getting an up-close look at some of Florida's most beautiful wildlife. Take an airboat ride through the wetlands and see alligators, eagles, and other wildlife in their natural habitat. The tour guides are knowledgeable and can answer any questions about the animals and plants you see.

Along the way, your captain will tell you about this area's history and provide educational information on various animals. You'll also get a history lesson on how Kissimmee got its name. It's great for any age group and a safe place to go if you have small children who are curious about wildlife. It's worth checking out if you're interested in learning more about the Everglades or want to take a relaxing boat ride around nature.

The Great Magic Hall

The Great Magic Hall is an excellent place for a family outing. They offer a wide range of magic performances and a magic shop full of surprises. You and your children can learn about the art of magic and watch some fantastic tricks. Plus, there's a gift shop where you can buy some souvenirs to remember your trip. Be sure to visit this one if you're looking for fun activities in Osceola County and discover where magic lives.

Go Shopping and Stop By a Restaurant for a Delicious Hispanic Cuisine

There are many great places to shop in Osceola County, whether you're looking for clothes, groceries, or souvenirs. Plus, it's a great way to spend quality time with your loved ones. Below are some of the famous shopping spots in Osceola County:

  • The Loop Kissimmee
  • Plaza Del Sol
  • Bealls Outlet
  • The Florida Mall
  • Poinciana Marketplace
  • Walmart Supercenter
  • Celebration Town Center
  • The Crosslands Shopping Center

If you're looking for a delicious and affordable meal, you'll want to check out one of the many Hispanic restaurants in Osceola County. From Cuban to Mexican and everything in between, there's something for everyone to enjoy. Plus, the friendly atmosphere is perfect for families. Below are several restaurants/cafes to get some Hispanic cuisine:

  • Sazón Latino Mexican Restaurant
  • Perico Ripiao Latin food
  • Rancho Chico
  • Jalapenos Mexican Restaurant
  • Don Pepe Taqueria
  • Unidos Restaurant
  • El Tenampa Mexican Restaurant
  • Abuelo's Mexican Restaurant
  • Los Cabos Mexican and Cuban Cuisine

Bottom Line

An FHA loan is designed to help you afford the high costs of buying a home by reducing the amount you need to put down on your mortgage loan. If you're considering purchasing a home in Osceola County, Florida but have limited funds, you may be interested in the 3.5% low down payment option available through FHA loans.

However, before you apply for an FHA loan in Osceola County, Florida, it's essential to understand what these loans entail and how they differ from other types of loans. Please contact an FHA-approved lender or visit your local FHA offices to confirm your eligibility status and the paperwork you need to start the application process.

With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.

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