Best Mortgage Lenders in Tallahassee, FL

How to choose a mortgage lender in Tallahassee

Tallahassee is known for its beautiful lakes and hiking trails, but many consider living here for the city’s career and educational opportunities. Home prices in Tallahassee have risen slightly recently, but the median home selling price is still $180,000, which is significantly lower than the $231,000 average for Florida.

Financial advisors suggest spending no more than 28 percent of your monthly income on a mortgage. Many loans require you to pay a certain percentage of the home price upfront. While this number has traditionally been 20 percent, required down payments are now significantly less for many types of loans, making home ownership possible for more people.

Applying for mortgages in Tallahassee

Before applying for mortgage loans, it’s helpful to know your credit score. Mortgage lenders use this to determine your eligibility and interest rate. Some lenders work with people with credit scores as low as 580, and it may be possible to receive a government-backed mortgage with a score of 500.

Mortgage companies offer a variety of loans for homebuyers, and a representative from the lender can help you choose which is best for you. The most common mortgage loans in Tallahassee are:

• Conventional loans: These are the most common mortgage loans and are offered from many banks, credit unions and other lenders. These loans often require higher credit scores and larger down payments than other options.
• Jumbo mortgages: These loans are a type of conventional mortgage for high-value houses. They are not eligible to be purchased or guaranteed by Fannie Mae or Freddie Mac. Qualifying for a jumbo mortgage usually requires excellent credit because of the loan value.
• FHA loans: The Federal Housing Administration backs these loans. Homebuyers with lower credit scores may qualify for these loans, but the loan requires mortgage insurance. FHA loans require 10 percent or less for a down payment and have low interest rates.
• USDA loans are backed by the U.S. Department of Agriculture and are available for homes in specified rural areas. These low-interest loans do not require a down payment.
• VA loans: VA loans are low-interest loans that require no down payment. They’re offered to veterans, members of the armed forces and surviving spouses by the Department of Veterans Affairs.

Comparing mortgage loans in Tallahassee

Once you’ve chosen the type of loan to use for your mortgage, there may be other considerations, such as:

• Fixed vs. variable rate loans: Fixed-rate mortgages have a predetermined interest rate that doesn’t change during the life of the loan, making them easier to budget. Variable-rate are less predictable and rise and fall with market conditions.
• Loan terms: Extended loans offer lower monthly payments but increase the total cost of the loan. Your type of loan may determine your term options. FHA loans, for example, are for either 15 or 30 years.
• Down payment: Your lender may set your down payment, and it may be necessary to make a more substantial down payment if you have bad credit. Factors such as your income level, debt-to-income ratio and credit score also determine how much you are expected to pay upfront.
• Financial assistance: There are a variety of assistance programs available for homebuyers, including loans or grants for first responders, military members or certain federal and state employees. Assistance is usually given to low-income homebuyers or Tallahassee residents in specific career fields.

Some local resources could help you cover the cost of purchasing a home. The City of Tallahassee provides a Down Payment Assistance loan that helps with your down payment and closing costs up to $7,000. First-time homebuyers and low-income residents may qualify for more assistance. Some home buyers may also be eligible for a 3 percent grant.

You may also save when you purchase a fixer-upper since the Tallahassee government allocates some funds to homeowner rehabilitation costs. If you are an employee of the City of Tallahassee, you could be eligible for a $5,000 loan.