Resources
Purchase Loans
The Insider's Guide to Buying a Home in Pensacola
Whether you're a first-time homebuyer, considering a second home, or venturing into investment property — Coastal Funding Corporation has the loan programs and expertise to guide you every step of the way.
Loan Programs
Understanding Home Loans
Conventional Loans
The Basics of Conventional Loans
Conventional loans are a popular choice among homebuyers with strong credit scores and a solid financial history. Unlike government-insured loans, conventional loans are not backed by a federal agency. They offer more flexibility in terms and conditions — no upfront mortgage insurance premiums, and for those who put down 20% or more, ongoing mortgage insurance may be waived.
- No upfront mortgage insurance premium
- 20%+ down = no ongoing PMI
- Primary, second home, or investment
- Flexible terms and conditions
FHA Loans
What You Need to Know
FHA loans are ideal for first-time homebuyers or those who may not qualify for conventional financing. Backed by the Federal Housing Administration, these loans feature more lenient credit score requirements and a lower minimum down payment — as low as 3.5%. Perfect for buyers with less saved or lower credit scores.
- Down payment as low as 3.5%
- More lenient credit requirements
- Primary residence only
- Home inspection required
VA & USDA Loans
A Closer Look
VA loans are an exclusive benefit for military service members, veterans, and eligible surviving spouses — offering no down payment, no mortgage insurance, and competitive interest rates. USDA loans target rural homebuyers in eligible areas like Pace, Milton, and Navarre, also offering no down payment for qualifying borrowers.
- No down payment required
- No mortgage insurance (VA)
- Competitive interest rates
- Rural & military eligible
Buyer Types
First-Time Homebuyers & Investors
First-Time Homebuyers
Primary Residence vs. Second Home
A primary residence is where you plan to live for the majority of the year — lenders offer better rates for these properties. For first-time buyers, focusing on a primary residence is usually the best course of action, as numerous loan programs are specifically designed to help.
Investment Property
Investing in Real Estate
Investment properties differ from primary residences in both purpose and financing. Lenders typically require a larger down payment — sometimes 20% or more — and charge higher interest rates. Consider location, rental income potential, and your financial readiness to manage additional expenses.
Income Documentation
The Mortgage Process
For Self-Employed and W2 Workers
W2 Employees
For W2 workers, lenders look for a stable job history and consistent income verified through recent W2 forms and pay stubs. This provides a clear picture of annual earnings, making the approval process more straightforward.
- Recent W2 forms and pay stubs
- Stable employment history
- Consistent verifiable income
Self-Employed Borrowers
Self-employed individuals must provide more documentation to prove income stability — typically two years of tax returns and 1099 forms. We also offer bank statement programs, allowing borrowers to use bank statements as proof of income.
- 2 years of tax returns and 1099 forms
- Bank statement programs available
- Strong credit score and down payment help
Financial Preparation
Deciphering Your Tax Returns
How Tax Returns Affect Your Application
Lenders use tax returns to verify income and assess financial stability. The adjusted gross income (AGI) is especially important — lenders typically average this figure from the last two years. Because self-employed borrowers often have numerous deductions that reduce taxable income, the AGI may not accurately reflect cash flow available to pay a mortgage.
Pro Tip
Consult with a tax advisor and a knowledgeable mortgage professional well in advance of purchasing a home to ensure your finances are optimally positioned for loan approval.
Expert Guidance
Choosing the Right Realtor
A Realtor plays a pivotal role in the home buying process — your advocate, advisor, and negotiator from the initial home search to the final closing. Realtors possess a deep understanding of the local real estate market, providing insights into neighborhood trends, school districts, and property values.
Looking for a Trusted Pensacola Realtor?
We work closely with Angee Kent of LPT Realty — a Pensacola area specialist with deep knowledge of Escambia and Santa Rosa County.
Ready to Purchase Your Home?
Our team at Coastal Funding Corporation is ready to guide you through every step of the home buying process. Schedule your free consultation today. NMLS #103035.