If you need to take out a loan to purchase a high-value property, there is a chance that you will be applying for a jumbo mortgage.
This type of loan is similar to a conventional mortgage both in terms of qualification requirements and characteristics.
Although there is a tendency for interest rates to range higher for jumbo mortgages, they can also fall within the same range.
To understand what a jumbo mortgage is and why it is needed, you must first understand what a conventional loan is. A conventional mortgage is for borrowing an amount below the conforming loan limits set by the Federal Housing Finance Agency (FHFA) for Fannie Mae and Freddie Mac.
A jumbo loan is what you need in order to borrow above those limits.
The conforming loan limits are set by county across the country.
For most locations in the contiguous US as well as in the District of Columbia and Puerto Rico, the general conforming loan limits are as follows:
In high-cost areas, as well as all of Alaska and Hawaii, the conforming loan limits are:
If you are not sure what the conforming loan limits are for your county, we can let you know during your jumbo loan consultation.
The same basic factors which are assessed to qualify a borrower for a conventional loan are also used to qualify a customer for a jumbo mortgage.
Down payment amount.
(usually two rather than one).
When you take out a jumbo mortgage, you are borrowing more money than you would for a conventional loan, which presents more risk to the lender.
For this reason, lenders do set higher standards in terms of credit score and DTI ratio requirements as well as cash reserves. Your down payment could be higher than it would be for a conventional mortgage, or it could be within the same range, depending on all factors which are assessed during the application process.
If you are ready to apply for competitive jumbo financing to purchase a home anywhere in the country, The Best Home Loans is here to bring you affordable rates and favorable terms. Schedule your consultation today by calling (800) 293-2133. We offer jumbo loans in California, New York, Texas, Florida, and all 50 states.
The Best Home Loans is an Equal Housing Lender. As prohibited by federal law, we do not engage in business practices that discriminate on the basis of race, color, religion, national origin, sex, marital status, age, because all or part of your income may be derived from any public assistance program, or because you have, in good faith, exercised any right under the Consumer Credit Protection Act. Disclaimer: Programs subject to change without notice. All borrowers must qualify per program guidelines.