Are you interested in purchasing a home that has a higher than average price tag? Housing prices have increased throughout certain areas of the United States, and if you have your eye on a more expensive home, you may need to apply for a jumbo loan, which is a mortgage designed to finance homes that exceed the limits of a traditional loan. If you are interested in purchasing a higher-priced property in Jacksonville, Florida, the loan specialists at North Star Mortgage Network, Inc. are here to help. Read on to learn more about how to finance a home with a jumbo loan.

Jumbo Loans: Essential Information

Jumbo loans are considered non-conforming loans, meaning they are too expensive to be classified as a conforming loan. Non-conforming loans exceed the limits set by Freddie Mac and Fannie Mae, which are government-sponsored entities, (GSEs), that buy conforming conventional loans from lenders and sell them to investors. These government-sponsored entities set a maximum loan limit, which is currently set at $548,250. If the amount for a loan exceeds that limit, it is then considered a non-conforming, or jumbo loan. Jumbo loans are often considered riskier loans for lenders since the loans are not insured by GSEs and the lender isn’t protected from losses if the borrower is unable to make payments, therefore, the qualifications are stricter.

If you are searching for a notably more expensive or luxury home, a jumbo loan may be your best financing option. You can use a jumbo loan to purchase a new property, or refinance your current home for better rates or terms. If you have a high credit score, are able to make a significant down payment, and have sufficient financial resources, you could qualify for a jumbo loan.

Factors to Consider with a Jumbo Loan

Because jumbo loans are a higher risk for lenders, the underwriting for the loans are stricter for borrowers. Some common qualifications and factors to consider when applying for a jumbo loan are:

  • A FICO score of 700 or higher
  • A maximum debt-to-income ratio, (DTI) of 40%
  • A 90.01%-95% LTV (loan-to-value) up to 1.75 million dollars
  • A 95.01%-96.5% LTV up to 1.5 million dollars
  • There is no mortgage insurance minimum
  • The home can only be your primary residence
  • Manual underwriting is available only

Buying Your Dream Home with a Jumbo Loan

If you are looking for a luxury home located in a high-priced area in Jacksonville, Florida, and have solid financial resources available, the loan specialists at North Star Mortgage Network, Inc. can help you finance your home with a jumbo loan. Our team will work closely with you to find the best financing option for your situation.