Getting a mortgage in Florida: what you need, what it costs, and why the payment is bigger than you think

How much down payment do I actually need?

As little as 3%, and 20% only matters because it is where mortgage insurance stops.

What credit score do lenders want?

580 opens FHA, 620 opens conventional, and 740 is where pricing stops improving much.

The score does two things: it decides whether you qualify, and it sets your rate. The second is where the money is. The difference between a 660 and a 760 score can be half a percentage point or more — on a $320,000 loan, roughly $100 a month for thirty years.

What moves a score in weeks rather than years:

• Paying down revolving balances. Utilisation is heavily weighted and it updates monthly. Getting cards under 30% — better, under 10% — is the fastest lever.
• Disputing errors. Common, and correctable.
• Not opening anything new. A new card or a financed car between pre-approval and closing can undo the approval entirely.

What is pre-approval, and why does it come first?

A lender has reviewed your credit and documents and issued a letter for a specific amount. Without one, in Florida, many listing agents will not present your offer.

What they will ask for: two years of tax returns and W-2s, recent pay stubs, two to three months of bank statements, and identification. Self-employed buyers should expect two years of returns plus a profit-and-loss statement.

Two things to insist on when you get it:

• That the lender is quoting Florida taxes and Florida insurance for the actual county, not national averages.
• That you ask about down payment assistance at this stage. Most programmes require an approved lender and a homebuyer education course — both take time you will not have once you are under contract.

Why does the same income buy less house in Florida?

Because underwriting works from the total monthly payment, and in Florida taxes and insurance are a far bigger share of it.

On a $400,000 home, property tax and homeowners insurance run around $1,280 a month — roughly 63% of the size of the mortgage payment itself. In most of the states people move from, those two lines are about a third of that.

Since the lender caps you on the total payment, the larger those two lines are, the smaller the loan they will approve. Two consequences:

• A pre-approval based on your current state’s cost assumptions will overstate what you can buy here. Get pre-approved with a lender quoting the county you are actually buying in.
• Where you buy inside Florida changes your approval amount. Insurance in a Kissimmee ZIP code and in a Broward coastal ZIP code differ by thousands a year — which translates directly into how much house the same income supports.

Fixed or adjustable?

Fixed unless you have a specific, dated reason to expect to be gone — and “I’ll probably refinance” is not one.

A fixed rate is certainty: the interest never changes, though your payment still moves as taxes and insurance move. An adjustable rate starts lower for a fixed period — commonly five, seven or ten years — then adjusts on a schedule, within caps.

An ARM makes sense when the horizon is genuinely shorter than the fixed period: a known relocation, a property you will sell. It makes less sense as a bet that rates will fall, because if they do you can refinance out of a fixed loan anyway — and if they do not, you keep the fixed rate.

If you take one, read three numbers: the index it adjusts against, the margin added to it, and the caps — per adjustment and lifetime. The lifetime cap is your worst case, and you should be able to afford it.

Bank or mortgage broker?

A broker shops several lenders; a bank offers its own products. For anything unusual, the broker usually wins — and in Florida “unusual” includes a lot of ordinary situations.

Whichever you use, get two Loan Estimates on the standardized federal form and compare them side by side. Section A is where the differences live, and lenders know most buyers never do this.

One Florida-specific point: if you are buying a condominium, ask early whether the lender has approved the building. Condo project review — reserves, litigation, owner-occupancy, and since 2022 the milestone inspection status — can disqualify a building for conventional financing regardless of how strong your file is.

Can I negotiate the rate I’m offered?

Yes, in three different ways, and only one of them is asking.

• Competing offers. A second Loan Estimate is the most effective negotiating tool that exists, because it is specific and verifiable.
• Discount points. One point costs 1% of the loan and typically lowers the rate by 0.125% — an eighth of a point, not a whole one. To move the rate a full percentage point you would buy eight points, 8% of the loan. Worth it only if you hold long enough to earn it back, which is usually five to seven years.
• Seller or builder credits. In a slower market these are common, and a rate buydown funded by the seller is often easier to get than an equivalent price cut.

Can I buy without U.S. residency or credit history?

Yes. Foreign national loans exist and are routine in South Florida — with a larger down payment and a higher rate.

What to expect:

• 30–40% down is typical, sometimes more depending on the property type.
• A rate above what a resident with the same profile would get — a premium your lender should be able to quantify rather than wave at.
• Documentation from your own country instead of U.S. credit: bank references, an international credit report, proof of income, and passport.
• No U.S. credit history required — these programmes are built for exactly that.

A DSCR loan is the other route for an investment property: underwritten on the property’s rent rather than on your income, with no tax returns. Note that in Florida the ratio includes taxes and insurance, so a high-insurance ZIP code can fail the test on a property that would pass elsewhere at the same rent.