Jumbo Loan Guide
Loan Type: Jumbo Home Loan
Specific Uses: 0% Down, 100% Financing, New Construction, First Time Home Buyers, Refinance, Debt Consolidation, Large financed loan amounts, Cash Out.
What is a Jumbo Mortgage?
A Jumbo mortgage is a Home Loan that exceeds the mortgage home loan limit in the specified county in which the residence is located. Usually this means that the anticipated financed amount is over $417,000. This amount can and will be different based on the area in which the property is located. Some higher costs counties, such as in New York City, Los Angeles and San Francisco have a loan limit of $625,500. These loans may be Fixed Rate Mortgages, Adjustable Rate Mortgages and in some cases, Interest-Only Home Loans. Not all banks and lenders will have a Jumbo Mortgage product. We have identified the lenders in your area that can offer this product, click here to view lenders.
Jumbo Home Loan Summary:
Qualifying for a Jumbo Mortgage is very much the same as a Conventional Mortgage except there may be 2 separate appraisals. This will depend on the lender. For a purchase loan, the down payment can range from 15% – 30%. These types of loans carry more risk so the guidelines might be slightly different depending on the bank or lender that you work with. The lower the property’s Loan-to-Value Ratio is could allow you to finance a higher loan amount.
Jumbo Home Loan Guidelines:
- DTI: (Debt-to-Income) Ratio must not exceed: 43%
- Max Loan Amount: This depends on the county and its Loan Limits
- Reserves: 6 to 12 months (meaning the monthly payment could be made for this long)
- Income: 2 Years full tax returns required
- Min Credit Score: 700 (depending on Lender)
- Max LTV: (Loan-to-Value) on an Jumbo Home Loan is 100%
- Collections: Any Collection balances over $2,000 must be collected or have made payment arrangements prior to closing.
- Cash Out Max: There is no maximum cashout amount. Depends on county loan limits.
- Max Loan Amount: Up to around $1.5 million
- Down Payment: 15% – 30% Down Payment required on Jumbo Home Purchase loans
- Missed a Payment? Only two 30 Day Mortgage Late Payments allowed in the last 12 months.
Jumbo Home Loan Facts:
- Jumbo Loan Interest Rates are higher than Conventional Home Loan rates.
- Jumbo Loans can require Mortgage Insurance.
- Jumbo Loans are not sold to Fannie Mae or Freddie Mac. They are sold to outside investors.
- Jumbo Loans do not cover Manufactured Homes. (Depends on whether Lender will cover)
- Gift Funds allowed for closing cost assistance.
- 2 Appraisals may be required on Purchase and Refinance JUMBO Home Loans.
- Minimum FICO (Credit Score) Required = 700. Sometimes lower depending on the Lender.
**An alternative to having a higher interest rate on a Jumbo Mortgage would be to separate the mortgage into a 1st and 2nd mortgage. Just be sure that you would be paying less interest if you decide to go this route**
There is still much more information about Jumbo Home Loans. Reach out to your bank or lender for more specifics on what you can qualify for.
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