Home Loans In Lakeland

Lakeland is the largest and most populous city in Polk County, Florida, part of the Tampa Bay Area. It is a principal city of the Lakeland–Winter Haven Metropolitan Statistical Area. It is also the 22nd largest city in Florida and has a growing rate of 1.33%. People flock to this city because of its amazing lakes. Lakeland is constantly growing! More and more people are moving into this city and for mainly its affordable cost of living. The overall cost of living is lower than the national and state average, making Lakeland one of Florida’s cheapest places to live.

The Lakeland housing market is somewhat competitive. Lakeland property prices were down 5.8% from last year, with a median price of $300,000 sold. The average home sells for 2% less than the asking amount and goes pending in roughly 25 days. 

Home Loan Programs in Lakeland

There are several mortgage loans available in Lakeland, Florida. From traditional home loans to government-guaranteed and jumbo loans, there is a plethora of home loans for every home buyer.

• Conventional Loans

These are the most prevalent and readily available mortgage options in Lakeland. These loans are appropriate for borrowers with solid credit, a balanced income, some debt, and some down payment. They are frequently the most straightforward approach to obtaining the most versatile financing options.

Conventional loans have strict qualification requirements. While these may differ slightly from lender to lender, they often include the following:

• Credit Score

Conventional loans require a better credit score than government-backed loans. The typical minimum credit score necessary is generally 620, while some lenders might require 640 or higher.

• Debt-to-Income Ratio

This is the percentage of your monthly gross income that goes toward debt repayment. This ratio is usually required to be less than 43% for a conventional loan. However, this figure may be lower if the applicant does not have an excellent credit history.

• Down Payment

Conventional loans typically have a more significant down payment requirement than government-backed loans. The actual amount varies based on the borrower’s credit score, but it is generally between 3% and 5% of the home’s purchase price. For down payments of less than 20%, Private Mortgage Insurance (PMI) is required.

• Loan Limit

Conventional mortgages must meet the local Federal Housing Finance Agency (FHFA) requirement to be considered conforming. This means the FHFA limit would decide the maximum loan amount for the given location. In 2023, the conforming loan limitations for Lakeland, Polk County are $726,200 for a single-family house, $929,850 for a duplex, $1,123,900 for a triplex, and $1,396,800 for a fourplex.

• Loan Conformance

Conventional loans (also known as “conforming” loans) are those that meet the requirements of Fannie Mae and Freddie Mac. These government-sponsored enterprises purchase home loans from lenders to provide liquidity, allowing lenders to continue providing home loans to buyers.

• FHA Loans

The Federal Housing Administration (FHA) insures these loans against default, removing the risk from the originators. They provide easy mortgage qualification and down payment assistance. This could appeal to people trying to buy a property in Lakeland, FL, at a low interest rate.

FHA-insured loans have specific eligibility requirements:

• Credit Score

To qualify for an FHA loan, borrowers must have a credit score of at least 580. This is a less stringent guideline than many conventional loans. 

• Employment

Borrowers must have a two-year verifiable work history to be eligible for an FHA loan. Recent college grads and those with proof of current military service are exempted from this requirement.

• Debt-to-Income Ratio

The standard DTI ratio for an FHA loan is 45%. However, the DTI ratio may be as much as 50% with compensating factors. Borrowers with high credit scores may have a 55% DTI ratio.

• Down Payment

A down payment of 3.5% is required for borrowers with credit scores of 580 and above. However, borrowers with scores between 500 – 579 may still be eligible for an FHA loan with a minimum of 10% down, and certain restrictions may apply.

• Loan Limits

The FHA loan limits for Polk County in 2023 are $472,030 for a one-unit home, $604,400 for a duplex, $730,525 for a triplex, and $907,900 for a fourplex, respectively.

• VA Loans

VA home loans are mortgage loans backed by the United States Department of Veterans Affairs (VA) and are accessible to Service members, Veterans, and eligible surviving spouses. Private lenders, such as banks and mortgage companies, provide these loans. The VA guarantees a portion of the loan, allowing lenders to offer favorable terms to borrowers.

The VA home loan programs can assist you in purchasing, building, or improving your home and refinancing your current mortgage. There’s also a VA Rehab and Renovation Loan program that allows qualified borrowers to fund the purchase price of a property as well as certain renovations in a single package.

To be eligible for a VA home loan, you must first get a Certificate of Eligibility (COE), which certifies your eligibility based on your military service history and current duty status. The following elements determine qualifying for a VA loan:

• Service History

There are specific service requirements to be eligible for a VA loan. These are determined by the era or wartime period in which you served, and you must have been discharged under conditions other than dishonorable.

• Duty Status

Active duty service personnel, as well as veterans, may be eligible. Members of the National Guard and reservists are also eligible.

• Surviving Spouses

A surviving spouse who remarries after age 57 and before December 16, 2003, may be eligible for a home loan benefit. Surviving spouses must meet additional requirements.

For specific eligibility based on your service, contact the U.S. Department of Veterans Affairs or speak with one of our VA Home Loan Specialists.

• USDA Loans

A USDA home loan is a mortgage option for low-income borrowers in designated rural locations, such as Lakeland, Florida, in Polk County. This loan is accessible through the USDA Rural Development’s Section 502 Direct Loan Program, which aims to provide a road to homeownership for low- and very-low-income families living in rural areas.

The USDA provides two types of loans: direct loans and guaranteed loans. Direct loans are issued directly by the USDA and include financial help through subsidies. Guaranteed loans, on the other hand, are provided by USDA-approved lenders.

A USDA home loan’s eligibility requirements include credit, income, property usage, and home location. The USDA establishes these guidelines to provide safe, sanitary, and secure housing for low to moderate-income households.

• Income

Applicants must meet specific income guidelines. The USDA is intended to help low- to middle-income individuals and families.

• Credit

While credit score criteria differ by lender, candidates must have a reasonable credit history. To be eligible for a USDA-Guaranteed Home Loan, most lenders require a credit score of 640 or above.

• Property Location

The home to be purchased must be in a USDA-defined eligible rural area. This often refers to locations having a population of 35,000 or fewer people.

• Property Usage

The property being purchased must be the borrower’s primary residence. It cannot be an investment property, a second home, or an income-producing property.

• Property Size

The property must be at most 2,000 square feet.

• Loan Purpose

A USDA home loan can be used to buy, build, remodel, improve, or relocate a home in a qualifying rural area.

• Citizenship or Residency

Applicants must be U.S. citizens or lawfully admitted Qualified Aliens.

• Jumbo Loans

Jumbo loans are non-conforming mortgages that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA) and the government-sponsored enterprises Fannie Mae and Freddie Mac.

The fundamental benefit of a jumbo loan is that it allows borrowers to finance a property that exceeds the Federal Housing Finance Agency (FHFA) limits. In other words, these loans enable customers to purchase luxury or higher-priced properties.

Borrowers must typically meet tighter eligibility requirements than those applying for conventional loans. Among these requirements are the following:

• Higher Credit Score

Jumbo loans require a score of 700 or higher. Some lenders require a score of 740 and up to qualify for a jumbo loan.

• Lower Debt-to-Income Ratio

Borrowers typically need a lower DTI ratio of less than 43% to qualify for a jumbo loan.

• Larger Down Payment

Due to the risk of a higher loan amount, lenders require a down payment of 10 – 20%, depending on the borrower’s credit score.

• Cash Reserve

One of the major prerequisites for jumbo loans is cash reserves. These are funds that you can easily access after you close on your home. They assure the lender that you have the resources to cover your mortgage payments in the event of a financial emergency.

The amount of cash reserves required varies, although many lenders require reserves equal to six to twelve months’ worth of mortgage payments. However, depending on the borrower’s financial situation and the loan terms, some lenders may require reserves equal to many years’ worth of mortgage payments.

It’s vital to remember that these assets must be “seasoned” – that is, they must have been in your ownership for at least two months and aren’t a recent gift or loan.

Enough cash reserves decrease the lender’s risk and benefit the borrower by increasing the likelihood of loan approval. 

Apply for a Home Loan in Lakeland

Capital Home Mortgage is a direct mortgage lender and servicer that provides a wide range of Florida mortgage products to meet clients’ needs. Whether you have lived in Lakeland or are new to the area, our Capital Home Mortgage Team will work with you to find the loan program that best matches your budget and personal needs.

Call our Lakeland Home Loan Specialists at (863) 513-1790 to begin your home-buying process!