WHAT IS A JUMBO LOAN
A jumbo loan is a mortgage used to purchase or refinance properties that are too expensive for a conventional conforming loan. They are also called non-conforming conventional mortgages because they cannot be guaranteed by the federally-backed mortgage companies Fannie Mae and Freddie Mac.
You may not know much about jumbo loans, but they are quite common.They are different from conforming loans that must meet the guidelines set forth by Fannie Mae, the Federal National Mortgage Association, or Freddie Mac. These loans with a different set of guidelines, or requirements for getting one, are important because average home prices vary widely across the United States, within states, and even cities and communities. The limits are based on average home prices. Jumbo loans are available with fixed or adjustable interest rates and come with a variety of terms.
The criteria for jumbo loans are more strict than the criteria for conforming loans. This is because the loans are larger and riskier for lenders. PrimeLending can help you understand the strict criteria and guide you through the process of qualifying for one.
QUALIFYING FOR A JUMBO LOAN
Just like all other mortgage loans, jumbo loans come with a series of steps and a list of qualifications that must be met. Some of these are:
● A debt-to-income ratio lower than 43%
● A credit score above 700
● Cash reserves—it is common for lenders to require proof that you have a large cash reserve
● Be prepared to show extensive financial documentation such as complete tax returns, W-2s, 1099s, bank statements, and information on any investments.
PrimeLending can help you decide if a jumbo loan is right for you and then help you through the application process. The process is similar to qualifying for a conforming loan, you just have to meet the stricter guidelines.
WHY SHOULD I USE PRIMELENDING FOR MY JUMBO LOAN?
PrimeLending can help all types of borrowers . Here are just some of the benefits of using PrimeLending:
● They offer loans up to 80% of the home’s value that require 20% down
● Fixed-rate and adjustable-rate jumbo loans are available
● Some jumbo loan programs allow down payments in the form of a gift
PrimeLending knows that the home-buying process is different for everyone. Just because the home prices on a jumbo loan are high, it doesn’t necessarily mean the borrower is particularly wealthy. Not everyone has the same needs, budgets, advantages or options. Often, you’re at the mercy of the market, which is different depending on where you live. That’s what makes a jumbo loan so appealing. That $500,000 house in a small town in the Midwest could be quite extravagant, but a house for the same cost in parts of California could be quite modest. Many jumbo loan borrowers need this type of mortgage to buy large, expensive homes. But for others, this loan is used by a wider range of people looking for a mortgage in a housing market where the home prices are high, well above the local or national average.