Need a Jumbo Loan for your dream home? You’re in the right place.
Through the use of a jumbo loan, you can afford the beautiful home you’ve always wanted.
How can a Jumbo Loan help you move into your dream home?
Forget working with multiple lenders to access the funds you need for one home. With a Jumbo Loan, you can stick with one lender, and keep your savings intact. Take advantage of all that a Jumbo Loan can offer you and your homeownership goals.
What is a Jumbo Loan?
A Jumbo Loan is a mortgage that permits higher loan amounts than a conventional loan would traditionally allow. The current conventional conforming loan amount is capped at $453,100 and up to $625,500 in real estate markets of higher value. Fannie Mae and Freddie Mac loans set this limit on what they will purchase from a lender on a conventional mortgage (in order for the lender to have more liquidity to offer future loans). Thus, since Jumbo Loans go above the conventional amounts of Fannie Mae/Freddie Mac loans, the lender has to be willing to back the loan themselves.
Benefits of a Jumbo Loan
Flexibility of a Jumbo Loan
If you qualify for a Jumbo Loan, you’ll have a variety of options to choose from when it comes to how you want to set up the loan program. This flexibility will allow you to select a 30 year fixed-rate loan or a mortgage with an adjustable-rate (ARM). Once you qualify for a Jumbo Loan, your options of how to manage it are up to you, because lenders want to work with borrowers with a great credit history.
No Private Mortgage Insurance Required for Jumbo Loans
Because Jumbo Loans are often given to highly-qualified borrowers, private mortgage insurance is not required as long as no more than 80% of the home’s value is borrowed.
Access to the Home You Want
One of the most appealing benefits of Jumbo Loans to borrowers is the fact that they can finally purchase the home their dreams.
With a Jumbo Loan, you can buy a home that you previously weren’t able to acquire through a conventional loan. Luxury home and multi-unit properties are popular reasons for borrowers to seek out Jumbo Loans.
Tax Benefits of a Jumbo Loan
As with any mortgage, Jumbo Loans are allowed to be used a tax deduction on your yearly taxes. Depending on the value of your mortgage, you can typically deduct up to $1 million on your tax return with a Jumbo Loan!
Jumbo Loan FAQs
How do I qualify for a Jumbo Loan?
To qualify for a Jumbo Loan, be prepared to offer documents that prove your income, credit score, and history of your debt-to-income ratio. Additionally, be ready to offer 20% for the down payment.
To show your income level, bring two years’ worth of tax documents that will show your lender that you have a stable and regular source of income. Additionally, many lenders will hope to see that you have the liquidity available to cover at least six months of mortgage payments. You’ll also need to show documentation of any other loans you currently hold, and ownership documents of any other non-liquid assets (i.e. other properties).
What credit score do I need to qualify for a Jumbo Loan?
Credit scores play a critical role on your Jumbo Loan application. Minimally, applicants need a credit score of 620 to even be considered for a Jumbo Loan, but the average credit score is 680 for Jumbo Loan applicants. There are no nation-wide standards for minimum credit scores of Jumbo Loan, so they’re all based upon the lender’s decision.
What are the debt-to-income ratio requirements for a Jumbo Loan?
Most Jumbo Loan applications need to have a debt-to-income ratio of less than 43%. If an applicant has debts higher than 43% of their income, the lender will have to make a decision based on other documents that prove the likelihood of the loan being repaid.
What is the minimum down payment for a Jumbo Loan?
The traditional down payment for a Jumbo Loan is the same amount as for a conventional loan—20%. However, down payment requirements have become a bit more flexible in recent years, and some lenders accept 10% down payments for Jumbo Loans. However, a 10% down payment for a Jumbo Loan will likely affect the interest rate. Because it’s a greater risk for the lender to offer a Jumbo Loan with only a 10% down payment, interest rates will be higher. Strive to have 20–30% available for a down payment on your Jumbo Loan in order to keep your interest rates as low as possible.
Have a question or want to talk with a Jumbo Loan lender?