Lending 101

What to Expect

If you are a first-time home buyer or it has been a while since you have bought a home, the process of applying for and getting a home loan in a timely manner can be a challenge. Not to worry though because at Cast Home Loans we are proud to offer our assistance to all home buyers looking for a great mortgage in Palm Beach and throughout Florida. We work with you to help you effectively maneuver your way through the financial aspects of buying the home of your dreams. We pride ourselves in closing fast & efficiently which makes us the choice of many real estate professionals in Palm Beach.

So, how can we do this? We have years of expertise and knowledge in the mortgage broker industry that is constantly evolving. We partner with real estate agents to make buying your home as easy and simple as possible. Cast Home Loans is a South Florida based mortgage brokerage business that provides borrowers throughout Florida the knowledge and assistance they need to find the best possible loans for their specific needs.

With our expansive network and knowledge of the Florida real estate market, Cast Home Loans is able to work with you to ensure you meet all of Florida’s first-time home buyer program requirements. We treat you to the best home buyer assistance programs and we will work with you throughout the entire process.

We are here to help educate each client and help them understand the home loan process. This insight helps give clients a comfort level they do not get from many other lenders. We pride ourselves on customer satisfaction and welcome the chance to provide knowledge to our clients so that they can understand that they have a partner, in Cast Home Loans, throughout the lending process.

There has never been a better time to finally buy that home that you have always wanted or refinance your current home and take advantage of the equity you have created. Contact Cast Home Loans to get started today!

Find a loan that is right for you.

Whatever you are looking for in a loan we can help find the right type of loan. Feel free to reach out to ask any questions.

Phone: 561.990.LOAN (5626)

Email: loans@casthomeloans.com

FHA Loan

FHA loans are easier to qualify for than most mortgages even with a low credit score. Insured by the Federal Housing Administration, FHA home loans are government-assisted alternatives to conventional financing, FHA loans are available for homeowners looking to refinance, including an FHA streamline refinance and FHA cash out refinance. FHA mortgage loans for your home in the Palm Beach area provide more flexibility in credit, income, equity/down payment requirements. They do include a Mortgage Insurance Premium (MIP), as well as monthly mortgage insurance, but a fixed rate FHA loan enables many homeowners who wouldn’t qualify for conventional financing to purchase or refinance a home.

VA Loan

The VA Loan is available to United States Veterans, Service Members and not remarried spouses. You do not have to be a first time homebuyer to qualify. VA Home Loans are issued by private lenders and guaranteed by the U.S. Department of Veteran Affairs. If something goes wrong and you can’t make the payments anymore, the lending institution can recoup any losses they might incur from the VA. The VA loan guarantee works as the “insurance” provided to the lender. Get an affordable VA Loan from Palm Beach’s top mortgage company, Cast Home Loans.

WHY VA?

The guarantee VA provides to lenders allows them to provide you with more favorable terms, including:

No down payment provided the sales price doesn’t exceed the appraised value.

No private mortgage insurance premium requirement to the borrower.

VA rules limit the amount you can be charged for closing costs, reducing your out-of-pocket costs.

No prepayment penalties are allowed by the lender.

Conventional Loan

A conventional loan is not part of a specific government program, such as Federal Housing Administration (FHA), Department of Agriculture (USDA) or the Department of Veterans’ Affairs (VA) loan programs.There are two main categories of conventional mortgages:

Conforming: A conforming conventional home loan follows the guidelines put in place by Freddie Mac and Fannie Mae.

Nonconforming: These mortgage include both “jumbo loans” which exceed the loan limits imposed by government-backed agencies and special products for unusual circumstances.

Homebuyers will choose conventional mortgages because they tend to offer the best interest rates and loan terms, typically resulting in a lower monthly payment. Since most people choose a fixed-rate loan over an adjustable-rate mortgage, they don’t have to worry about rising mortgage rates, which makes it easier to budget your monthly expenses.

However, without the guarantee of the government, conventional loan borrowers pose a bigger risk to the institutions who issue the mortgage resulting in borrowers need to meet three basic requirements:

1. Large Down Payment

The standard down payment for a conventional loan is anywhere between 3 and 25 percent of a home’s value depending on the borrower’s credit and financial condition. For example, a $200,000 home could require a $40,000 down payment.

Depending on a lender’s specifications and the borrower’s credit, a borrower may be able to put down as little as 3 percent at closing.

2. Proof of Income

To qualify for a conventional loan, your monthly mortgage payments and monthly non-mortgage debts must fall within certain ranges, called your debt to income ratio (DTI). For instance, a lender may require your monthly mortgage payments (which may include taxes and insurance) not exceed 28 percent of your gross monthly income. In addition, your monthly mortgage payments, when combined with your other monthly debt payments (car loans, student loans, credit card bills, etc.) may be limited to a maximum of 36 percent of your gross monthly income.

3. Good Credit

Your credit score also plays a vital role when qualifying for a conventional loan. In fact, most lenders require a minimum FICO credit score of around 620 to obtain approval.

Jumbo Loan

A jumbo loan is one option when buying a higher-priced or luxury home. If your debt-to-income ratio is low and credit score is high, a jumbo loan may be right for you. The limit on conforming loans is $424,100 is most areas in Florida, with the exception of Collier and Monroe counties.

Adjustable Rate Mortgage

An adjustable-rate mortgage, or ARM, is a type of loan with an interest rate that can change periodically. This means that your monthly payments can go up or down.Typically, the initial interest rate is fixed for a period of time, then it resets periodically, from monthly to yearly. In many cases, ARMs come with rate caps that limit how high the rate can be or how drastically the monthly payments can change.

Lenders generally offer lower initial interest rates for ARMs than for fixed-rate mortgages. Initially, this makes your monthly payments lower than they would be with a fixed-rate mortgage for the same loan amount. Additionally, your ARM could be less expensive even over the term -for example, if interest rates remain steady or move lower.

However, you have to weigh the risk that an increase in interest rates would lead to higher monthly payments in the future. It’s a gamble-you get a lower initial rate with an ARM in exchange for assuming more risk over the long run. Our Palm Beach mortgage brokers can help you get an attractive ARM or any other kind of loan you desire.

HARP Loan

Created by the Federal Housing Finance Agency, HARP-the Home Affordable Refinance Program- is available to help homeowners who are:

Current on their mortgage payments

Have very little or no equity in their homes

Have a mortgage owned by Fannie Mae or Freddie Mac

Your mortgage was originated on or before May 31, 2009

If you qualify for HARP refinancing you could save thousands with a lower interest rate or other more favorable terms. No minimum credit score is required and closing costs can be folded into the new loan so you won’t need much cash up front. Additionally, an appraisal is not usually required saving you on fees that are typically associated with closing costs. Eligibility extends to your primary residence, second home and investment properties.