Question 1

How much house can I afford?

Accepted Answer

A common guideline is the 28% front-end debt-to-income (DTI) rule: your monthly housing payment — including principal, interest, taxes, and insurance — should not exceed 28% of your gross monthly income. For example, if your household earns $7,000 per month, aim for a total housing payment of $1,960 or less. Lenders also look at your total DTI (all debts), which should generally stay below 36-43%.

Question 2

What is PMI and when can I remove it?

Accepted Answer

Private Mortgage Insurance (PMI) is required on conventional loans when you put down less than 20%. It protects the lender — not you — if you default. PMI typically costs 0.5% to 1% of the loan amount per year. You can request PMI removal once you reach 20% equity in your home, and your lender is required to automatically cancel it when you reach 22% equity based on the original purchase price.

Question 3

What's the difference between fixed and adjustable rate mortgages?

Accepted Answer

A fixed-rate mortgage locks your interest rate for the entire loan term (typically 15 or 30 years), so your principal and interest payment never changes. An adjustable-rate mortgage (ARM) starts with a lower introductory rate for a set period (commonly 5 or 7 years), then adjusts periodically based on market indexes. Fixed rates offer predictability; ARMs offer lower initial payments but carry the risk of higher payments after the introductory period ends.

Question 4

How much should I put down on a house in Florida?

Accepted Answer

Down payment requirements in Florida depend on the loan type. FHA loans require as little as 3.5% down. VA loans (for eligible veterans and active military) require 0% down. Conventional loans start at 3% down for first-time buyers. Putting 20% or more down eliminates the need for private mortgage insurance (PMI) and gives you instant equity. Your ideal down payment depends on your savings, monthly budget, and loan program.

Question 5

What closing costs should I expect in Florida?

Accepted Answer

Closing costs in Florida typically range from 2% to 5% of the purchase price. For buyers, this includes lender fees, appraisal, title insurance, title search, recording fees, prepaid property taxes, and homeowners insurance. On a $400,000 home, expect $8,000 to $20,000 in closing costs. Florida does not have a state transfer tax for buyers, but sellers pay documentary stamp taxes. Your lender will provide a Loan Estimate within three days of your application with itemized closing cost projections.

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