Jumbo Loan

Jumbo Loan

You may need a mortgage to finance the purchase when you buy a new property. A jumbo mortgage can provide you the larger funds traditional loans do not cover — given that you
can find a lender that offers one, satisfy the requirements, and afford the higher cost.

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What Is a Jumbo Loan?

A jumbo loan is a mortgage used to finance properties that are too expensive for a conventional conforming loan. The maximum amount for a conforming loan is $766,550 in most counties, as determined by the Federal Housing Finance Agency (FHFA). Homes that exceed the local conforming loan limit require a jumbo loan.

Also called non-conforming conventional mortgages, jumbo loans are considered riskier for lenders because these loans can’t be guaranteed by Fannie and Freddie, meaning the lender is not protected from losses if a borrower defaults. Jumbo loans are typically available with either a fixed interest rate or an adjustable rate, and they come with a variety of terms.

A jumbo loan, also known as a jumbo mortgage, is a type of financing that surpasses the Federal Housing Finance Agency (FHFA) set. Unlike conventional mortgages, a jumbo loan cannot be purchased, guaranteed, or securitized. Jumbo mortgages are designed to finance luxury properties and homes in highly competitive local real estate markets and have unique underwriting requirements and tax implications. These mortgages have gained traction as the housing market recovered following the Great Recession.

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First-Time Homebuyer
Interest Rates
Hard To Qualify For
Buying A Modest Home
Super High Loan Minimum

First-Time Homebuyer

Risk Factor

You cannot get a jumbo loan as a first-time homebuyer.

Solution

But this is not the case. Even if you are buying your first home, you can apply for a jumbo loan. And you may be successful depending on your credentials.

Interest Rates

Risk Factor

You will pay a higher interest rate on a jumbo loan.

Solution

DSCR loan interest rates are comparable to conforming loans.

Hard To Qualify For

Risk Factor

Jumbo loans are hard to qualify for.

Solution

Jumbo loans are a bit more difficult to qualify for but not by very much as a credit score of 720 is fairly easy to achieve.

Buying A Modest Home

Risk Factor

You do not need a jumbo loan if you are not buying a mansion.

Solution

It is not uncommon for regular homes to require more financing to buy than you can obtain through the use of a conforming mortgage.

Super High Loan Minimum

Risk Factor

Jumbo loans require a super high loan minimum.

Solution

Jumbo loans don’t start at $1 million dollars. Instead, the minimum amount for a jumbo loan is anything above the conforming loan limit of $647,200.

Qualifying for a Jumbo Loan

Underwriting criteria for jumbo loans are stricter because the loans are more extensive and riskier for lenders.

  • Credit score: Lenders may need your FICO score to be higher than 700, sometimes as high as 720, to be eligible for a jumbo loan.
  • Debt-to-income ratio: Lenders will also assess your debt-to-income ratio (DTI) to guarantee you don’t become over-leveraged. However, they may be more flexible if you have ample cash reserves. Some lenders have a hard cap of 45% DTI, however.
  • Documentation: To verify your financial health, you’ll need extensive documentation, possibly more than a conforming loan. It would help if you were ready to provide your complete tax returns, W-2s, and 1099s when applying, in addition to bank statements and details on any investment accounts.
  • Cash reserves: You’re more likely to qualify for a jumbo loan if you have enough money in your bank account. Lenders usually ask jumbo loan borrowers to show they have enough cash reserves to provide one year of mortgage payments.
  • Appraisals: Some lenders may mandate a second home appraisal for the property you plan to buy.

Why Use a Jumbo Loan?

If you want to buy a more expensive house than usual, a jumbo loan can help you get the financing you require. Jumbo loans aren’t just used to buy a primary residence; this type of loan is also popular for investment properties and vacation homes.

“Housing is a great investment. In general, the people getting jumbo loans are the most creditworthy, and the money being leveraged is being put back into their businesses,” says John Lynch, the CEO of PCMA.

Suncoast Mortgage Firm LLC.

Our lending solutions use the perfect hybrid of human-driven insights and technical prowess to process loans faster and significantly reduce costs.

PHONE

(813) 599-3533

E-MAIL

tony@suncoastmortgagefirm.com

ADDRESS

8270 Woodland Center Blvd
Tampa, FL 33614

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Website Disclaimer : 

Effective Date: 9/1/2021
All loan approvals are conditional, not guaranteed, and subject to lender review of all information. A loan is conditionally approved when the lender has issued an approval in writing, but until all conditions are met, a loan cannot be funded. Specified rates may not be available for all borrowers. interest rates, and program guidelines, and are subject to change without notice based on applicant’s eligibility and market conditions. Suncoast Mortgage Firm LLC. is an Equal Opportunity Mortgage Broker headquartered in Tampa, Florida. This licensee is performing acts for which a mortgage broker license is required. Suncoast Mortgage Firm LLC. is licensed by the Florida Office of Financial Regulation, NMLS# 1936558. Suncoast Mortgage Firm LLC. is approved to originate Conventional, FHA, VA, and USDA loans, and has the ability to broker such loans to Conventional, FHA, VA, and USDA approved lenders. Suncoast Mortgage Firm LLC. is not acting on behalf of or at the direction of HUD/FHA or the VA.

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