Home Loans In West Palm Beach

West Palm Beach is the county seat of Palm Beach County in Florida. It is west of the neighboring Palm Beach, on a barrier island across Lake Worth Lagoon. West Palm Beach is a major city in the Miami metropolitan area, with a population of over 6 million. It is the oldest incorporated municipality in South Florida, established in November 1894. West Palm Beach is roughly 68 miles north of downtown Miami.

West Palm Beach has a Neutral Housing Market, which indicates that prices are generally affordable and homes are on the market for an average amount of time. The typical sale price of a home in West Palm Beach was $398K, a 5.1% decrease from the previous year. West Palm Beach’s median sale price per square foot is $283, up 1.4% from last year.

Home Loan Programs in West Palm Beach

Numerous mortgage options are available to homebuyers in West Palm Beach, Florida, each with advantages and disadvantages. Specific mortgage offerings can vary, and you may contact our West Palm Beach Home Specialists to learn more about how each of these mortgages differs and may be a good fit for you.

• Conventional Loans

Conventional loans are those offered to homebuyers by private lenders rather than government agencies. They are frequently compared to government-backed Federal Housing Administration (FHA) loans. However, they typically have higher interest rates.

Conventional loans have various advantages:

• Cost: Conforming loans, a type of conventional loan, are often less expensive than FHA loans.
• Loan Limit: Conforming loan limits for Palm Beach County in 2023 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, respectively.
• Qualification Time Frame: Some applicants may qualify for a conventional loan faster than a government-backed loan.
• Long-Term Savings: A conventional loan may save a borrower more money in the long run than an FHA loan. For the past 30 years, conventional fixed-rate loans have been regarded as the gold standard in lending.

To qualify for a conventional loan, a borrower’s credit score must be at least 620. A higher credit score, on the other hand, will allow the borrower to take advantage of lower interest rates. It’s also vital to remember that different lenders may have additional qualifying requirements, such as income verification, a down payment, and a credit history assessment.

• FHA Loans

An FHA (Federal Housing Administration) loan is a type of mortgage insured by the federal government, making it one of the easiest mortgage loans to qualify for due to its lower down payment requirement and less stringent credit score guidelines.

FHA loans have the following benefits:

• Low Down Payments: FHA loans typically require a 3.5 percent down payment.
• Less Stringent Credit Score Requirements: Compared to conventional loans, FHA loans may have less stringent credit score requirements. Borrowers only need a credit score of 580 to qualify for a 3.5% down payment.
• Higher Loan Limits: Depending on where the property is located, you may be able to borrow more with an FHA loan. The FHA loan limit for single-family home loans in Palm Beach County is $557,750 as of 2023. However, the loan ceiling for a duplex is $714,000, a triplex is $863,100, and a fourplex is $1,072.600.

A 3.5% down payment, a credit score of at least 580, and a Debt-to-Income (DTI) ratio of no more than 43% are generally required to qualify for an FHA loan. However, while the government insures these loans, the funding is provided by FHA-approved lenders, and each lending institution may have slightly different qualifying standards. 

• VA Loans

A VA (Veterans Affairs) home loan is a mortgage loan guaranteed by the United States Department of Veterans Affairs. The VA home loan program is designed to provide long-term financing to eligible American veterans or their surviving spouses.

The following are the primary benefits of VA home loans:

• No Down Payment: VA loans typically require a down payment if the sales price is equal to or less than the home’s appraised value.
• No Private Mortgage Insurance: Unlike many other loans, VA loans do not require borrowers to pay private mortgage insurance, which saves the borrower a significant amount of money.
• Lower Interest Rates: Compared to conventional loans, VA loans frequently have lower interest rates.

To qualify for a VA home loan, you must be a service member, a veteran, or an eligible surviving spouse. Your military background and current duty status decide your eligibility. In most circumstances, a Certificate of Eligibility (COE) will be required to demonstrate to your lender that you are eligible for this benefit. You can apply for a COE through the VA’s website, or your lender may be able to get one for you. The VA loan program also requires that you have the necessary income and credit for the loan amount.

It’s worth noting that surviving spouses who remarry after age 57  before December 16, 2003, may be eligible for the house loan benefit. To prove eligibility, a surviving spouse who remarried before December 16, 2003, and, on or after age 57, must have applied by December 15, 2004.

• USDA Loans

The USDA Home Loan Program in Palm Beach County, Florida, provides government-backed mortgage loans to qualified rural and suburban home buyers. These loans are part of the United States Department of Agriculture’s (USDA) Single Family Housing Direct Home Loans and Single Family Housing Repair Loans & Grants programs. This program aims to help low- and moderate-income families buy or repair homes in designated rural areas.

USDA Home Loans are available in three varieties:

• Direct Loans: These are loans made directly by the USDA to low and very low-income earners. The earnings criteria vary depending on where you live.
• Guaranteed Loans: These are for low and moderate-income mortgage borrowers and are also known as USDA Section 502 Guaranteed Loans. The loans offer low-cost, government-insured mortgages.
• Home Repair Loans and Grants (Section 504): This program offers low-income homeowners loans to repair, improve, or modernize their houses, as well as grants to elderly low-income homeowners to remove health and safety issues.

A potential homebuyer in West Palm Beach must meet strict eligibility criteria to qualify for a USDA Loan. The house must be in excellent condition, with no imminent maintenance needs. The household income must be less than the area median. Even if a person is not a borrower, their income is considered when assessing eligibility.

This loan needs no down payment for homebuyers interested in applying for a USDA home loan in Palm Beach County. Specific application phases would be required, detailed on the USDA website. For further information, please get in touch with one of our USDA Home Loan Specialists.

• Jumbo Loans

A jumbo loan, often known as a jumbo mortgage, is financing that exceeds the Federal Housing Finance Agency’s (FHFA) lending limits. Unlike conventional mortgages, Jumbo loans are not guaranteed by Fannie Mae or Freddie Mac and may be offered to borrowers who need to borrow more than the conventional loan limits.

A jumbo loan is one that exceeds $726,200 in West Palm Beach, Florida. These loans can be utilized for primary residences, vacation homes, and investment properties as long as you meet your lender’s standards.

The following are standard eligibility requirements for jumbo loans in West Palm Beach, Florida:

• Down Payment: Jumbo loans frequently require a higher down payment than standard loans. On Lendersten require a 20% down payment.
• Credit Score: On jumbo loans for single-family homes, your credit score is essential when looking for a jumbo mortgage. Although a credit score of 700 is recommended, some lenders require a FICO score of 740 or higher to qualify for a jumbo mortgage.
• Debt-to-Income (DTI) Ratio: Another critical factor is your DTI ratio, which analyzes how much money you earn vs. the amount of debt you have. Lenders often prefer a lower DTI since it indicates that you have a healthy balance of income and previous debt obligations. A DTI ratio of less than 43% on jumbo loans is often required.
• Cash Reserve: A reserve is the cash or liquid assets that a borrower has on hand after completing a home purchase. The reserves are intended to provide a safety net for the borrower in the event of unforeseen financial challenges. Having these reserves ensures that the borrower will not fail on the mortgage and will be able to qualify for more advantageous housing programs. A reserve of 6 – 12 months is a typical requirement for jumbo loans. However, some lenders may require a reserve of up to 24 months.

Remember that these are basic recommendations, and your specific scenario may necessitate different criteria. To understand the precise requirements for your circumstance, it is essential to talk with our Jumbo Loan Specialist.

Apply for a Home Loan in West Palm Beach

Capital Home Mortgage can assist you in purchasing a home in West Palm Beach. We provide home financing solutions to meet your needs, whether you are buying a primary residence or an investment property.

Call our West Palm Beach Home Loan Specialists at (813) 664-3350. We are here to help you with your home loan needs and will walk you through the entire process, from application to closing and funding.