Most first-time buyers focus on the down payment and call it done. Then they get to closing and find out there are closing costs on top of that, and in some cases, a reserve requirement on top of that. These aren't surprises buried in fine print. They're standard items in most mortgage approvals. Knowing all three numbers before you start saves a lot of stress near the finish line.
Number One: The Down Payment
The down payment amount depends on the loan type and your credit score. Here's how the main programs break down:
- VA loan: 0% down for eligible veterans and active military. No PMI, no down payment requirement. One of the strongest programs available.
- USDA loan: 0% down for eligible properties in qualifying areas. More Florida zip codes qualify than most buyers expect.
- FHA loan: 3.5% down with a 580 or higher credit score. 10% down if your score is between 500 and 579.
- Conventional loan: 3% minimum for first-time buyers with strong credit. Most buyers put down 5% to 10%.
The minimum isn't always the smartest move. A larger down payment lowers your monthly payment, can eliminate PMI, and improves your rate. But it also keeps more cash out of your hands at a time when you might need it. The right amount depends on your full financial picture, not just what the program requires. See our guide to pre-approval options to understand what lenders look at when reviewing your down payment source.
Number Two: Closing Costs
Closing costs in Florida typically run 2% to 5% of the purchase price. On a $350,000 home, that's $7,000 to $17,500 on top of the down payment.
These costs cover lender fees, title insurance, appraisal, prepaid property taxes, homeowner's insurance, and recording fees. Florida buyers also pay documentary stamp taxes on both the deed and the mortgage note, costs that most out-of-state buyers don't anticipate.
You can ask the seller to contribute toward closing costs. On FHA loans, sellers can contribute up to 6% of the purchase price. On conventional loans, it's 3% to 9% depending on your down payment. In a balanced market, seller concessions are worth negotiating. If you need help covering upfront costs, also check what's available through Florida down payment assistance programs.
Know Your Number Before You Fall in Love With a Home
A 20-minute pre-qualification call gives you all three numbers: down payment, closing costs, and reserves. You'll know exactly what you need before you start shopping.
Number Three: Reserves
Some loan programs require you to have money left in your account after closing. This is called reserves, and it's measured in months of mortgage payments. If your loan program requires two months of reserves and your payment is $2,000 a month, you need $4,000 still sitting in your account after the down payment and closing costs are paid.
Conventional loans backed by Fannie Mae often require two months of reserves for second homes and investment properties. Some lenders apply reserve requirements to primary residences as well, especially for higher loan amounts or lower credit scores.
Many buyers hit their reserve requirement problem by accident. They spend down savings to cover the down payment and closing costs without realizing there's a third number in the calculation. By the time a lender flags it, they're two weeks from closing.
How to Know Your Number Before You Apply
Your total savings target is the sum of all three: down payment plus closing costs plus reserves. Getting a real number requires a quote based on your loan type, purchase price, credit profile, and the specific property you're targeting.
A pre-qualification conversation can usually produce a solid estimate within 20 minutes. You'll know which loan type fits, what your down payment requirement looks like, and whether reserves are likely to apply. That number gives you an actual savings goal instead of a guess.
At 14 Days To Close, we run these numbers at the start of every conversation. There's no point getting excited about a home before you know what you're walking into financially. The first conversation is free. Take a look at our FHA loan guide for first-time buyers if you're still figuring out which program fits your situation.
