Home Loans In Palm Bay

Palm Bay is a city in Florida’s Brevard County. The city is the county’s most populated and largest by land mass. Palm Bay is a major city in the Palm Bay-Melbourne-Titusville Combined Statistical Area. The city is frequently divided into four quadrants: Northwest, Northeast, Southwest, and Southeast, each containing various zip codes. The Northeast has the most densely populated areas. Southwest has the most rural area, which includes The Compound. “The compound” region is mainly used by off-road vehicles and people participating in various recreational activities.

Palm Bay’s real estate market is somewhat competitive. Homes are sold in 70.5 days. Palm Bay’s median sale price per square foot is $192, up 3.8% from the previous year.

Home Loan Programs in Palm Bay

There are multiple mortgage programs available for homebuyers in Palm Bay, Florida. Among them are the following:

• Conventional Loans

Conventional loans are mortgages that are not guaranteed by the Federal Housing Administration (FHA) or the Veterans Administration (VA). They often adhere to the loan rules established by Fannie Mae and Freddie Mac, two government-sponsored enterprises that buy and guarantee mortgages generated by eligible lenders.

Conventional mortgages in Palm Bay, Florida, provide versatility because they can be used to purchase not only a primary dwelling but also an investment property or a vacation home. Conventional loans can have either an adjustable or fixed interest rate, and borrowers can choose a loan term that works best for them. As of 2023, the conventional loan limitations in Palm Bay are $726,200 for a one-unit home, $929,850 for a two-unit home, $1,123,900 for a three-unit home, and $1,396,800 for a four-unit home, respectively.

A credit score of at least 620 is usually required to qualify for a conventional loan. However, a 620 credit score is commonly considered a low score for a conventional loan, and those with a score this low may end up paying a higher mortgage rate.

The debt-to-income ratio (DTI) is the percentage of your gross monthly income for making your monthly debt payments. Lenders prefer a DTI of 43% or less for conventional loans. If the DTI ratio surpasses 36%, the loan must meet the credit score and reserve standards that apply to DTI ratios greater than 36% and up to 45%.

Overall, satisfying the credit score and DTI requirements increases your chances of being approved for a conventional loan. Other considerations, such as your employment history, income stability, and down payment size, also play a vital role in the approval process.

• FHA Loans

An FHA loan is a mortgage backed by the Federal Housing Administration, a United States Department of Housing and Urban Development subsidiary. These loans are popular among first-time homebuyers because they frequently require a lower minimum down payment and credit score than conventional mortgages. As of 2023, the limits for FHA loans in Brevard County in Palm Bay, Florida, are $472,030 for single-family homes, $604,400 for duplexes, $730,525 for triplexes, and $907,900 for four-family dwellings.

To be eligible for an FHA loan in Palm Bay, Florida, your home loan must be less than the local FHA lending limits. In addition, a 3.5% down payment and a credit score of 580 or above are usually required. Folks with credit scores between 500 and 579 may be able to qualify, but they’ll need to put down a higher 10% down payment.

You must apply to an FHA-approved lender to apply for an FHA loan. The application process entails typically submitting information about your income, assets, debts, and credit history. Remembering that each lender may have unique criteria is crucial, so it is best to consult our FHA Loan Specialist directly to determine what is required.

• VA Loans

VA home loans are government-backed mortgages accessible to qualified veterans, active military personnel, and eligible surviving spouses. These loans are intended to assist those qualified to become homeowners by allowing them to purchase, construct, repair, keep, or adapt a home for personal occupancy. While there is no maximum dollar amount for VA loans, lenders who sell their VA loans in the secondary market must conform to Ginnie Mae regulations.

Buying a home with VA benefits in Palm Bay, Florida, can be simple, and veterans may even be able to purchase with no down payment. It is also important to note that VA loans can be used to refinance your existing mortgage.

To qualify for a VA-guaranteed home loan, you must fulfill specific credit, income, and service history requirements. You must also present your lender with a current Certificate of Eligibility (COE).

• USDA Loans

USDA home loan services are available across Brevard County, including Palm Bay. USDA loans are government-backed mortgages available to low to moderate-income borrowers in rural and suburban locations. These loans are guaranteed by the United States Department of Agriculture and processed and funded by USDA-approved lenders. 

To qualify for the USDA loan program, you must satisfy a set of requirements, which vary depending on the lender. Loan funds are mainly used to assist low-income individuals, or households purchase rural dwellings. The funding can also be used to build, repair, refurbish, or relocate a home or to buy and prepare the land, including supplying water and sewage infrastructure. 

USDA loans provide qualifying borrowers various advantages, including 100% financing due to the 0% down payment requirement, lower mortgage insurance premiums, and competitive interest rates. The loan can also accommodate gift funds and down payment assistance programs. 

In addition, the Section 504 Home Repair program offers loans to low-income homeowners to repair, remodel, or modernize their houses and grants to senior low-income homeowners to alleviate health and safety issues.

• Jumbo Loans

Jumbo mortgages are loans designed to fund luxury homes or houses in high-cost real estate markets where conventional conforming loans may not suffice. These loans can be used to finance homes or properties too expensive for traditional or standard loans. Mortgages in Palm Bay above $726,200 are classified as “jumbo” for 2023.

Jumbo loans are more significant than conventional mortgage loans, and the typical jumbo loan eligibility requirements are the following:

• Down Payment

Since jumbo loans are more extensive than conventional loans, lenders may require a larger down payment, typically between 10 and 20% of the loan amount. 

• Credit Score

Credit requirements for jumbo loans are typically more stringent than those for conventional loans. Typically, a minimum credit score of 700 is required, although this can vary by lender. Some lenders require a FICO score of 740 or higher to qualify for a jumbo mortgage.

• Debt-to-Income Ratio

This ratio is calculated by dividing your monthly debt payments by your monthly total income. Jumbo loan lenders typically prefer a DTI ratio of 43% or less, though this can vary.

• Income

You must provide evidence of a stable, high income supporting the larger loan payments. This typically involves submitting W-2 forms, tax returns, and pay stubs.

• Reserves

The reserve requirement for a jumbo mortgage refers to the cash the borrower must have remaining after the loan closes. The purpose of these reserves is to demonstrate to the lender that the borrower has sufficient funds to make mortgage payments in the event of unforeseen circumstances.

The amount required can differ significantly based on the lender, the size of the loan, and the borrower’s financial situation. Still, it typically ranges from several months to more than a year’s mortgage payments.

These reserves can typically be held in various liquid or semi-liquid accounts, such as checking, savings, money market, or retirement accounts. Typically, the borrower must provide evidence that these funds exist, such as bank statements or retirement account statements.

Apply for a Home Loan in Palm Bay

Capital Home Mortgage is a direct lender and servicer of home loans in Palm Bay. We offer various home loan programs to fit borrowers’ needs and budgets.

Call our Palm Bay Home Loan Specialists at (561) 245-5434 to understand the specific requirements for your situation.