If you’re new to the home buying process, you may not be aware of jumbo loans as they are generally used by those in the investor field. Although they are lesser unknown, it’s still a good idea to get information on the varying types of funding available just in case it happens to work for your situation.
A jumbo loan is a type of loan used to purchase a home when the limits of government-backed loans, aren’t enough to cover the cost. There is a limit on mortgages which is set by Fannie Mae and Freddie Mac, when those limits are exceeded, you will find yourself in need of a jumbo loan. These are called non-conforming loans and the maximum varies by lender, so it is important to weigh out your options and talk to different lenders.
How Do I Qualify?
The qualifications will vary depending on the type of loan and lender, but jumbo loans typically have more stringent requirements. Your finances will be reviewed fairly closely as these loans have a strict underwriting process, so it is not advised to apply for this type of loan unless you are in a stable financial position.
The reason these loans have more guidelines is that they involve more risk than a government-backed loan. Although they do have more to gain since the loan itself is higher and can be more profitable to the lender.
In order to qualify for a jumbo loan, you will need to have a larger income, high credit score, and a generous down payment and savings. You’ll need to be able to prove you have enough money to pay off the monthly payments for the first 6-12 months when applying for a jumbo loan as well. If you do not meet these requirements, you can always discuss your options and the specific situation with a lender directly as having a low debt to income ratio can outweigh or lower credit score.
Is It Right For Me?
Jumbo loans are not right for every situation but they can be the perfect choice if you are in a situation where a loan backed by Fannie and Freddie are outside of the terms that you need for your purchase. It is possible to get a decent interest rate and finance your home even if have a budget that exceeds those limits. Jumbo loans are also good if you are seeking to purchase a piece of land as land and build on it later. That way you don’t have to take out more than one loan for the same project.
Reach Out Today!
If you’re in the market to purchase a property and haven’t secured financing, a jumbo loan might just be the best choice for you. We want to make sure you are making the best decision for your next purchase, so please contact North Star Mortgage in Jacksonville, FL today!
What is a Jumbo Loan?
A jumbo loan, also known as a jumbo mortgage, is a home loan that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). Jumbo loans are designed for properties that are more expensive and require larger loan amounts than conforming loans. Contact us today to find out the loan limits for your area.
Who is eligible for a Jumbo Loan?
Jumbo loans have stricter eligibility requirements compared to conforming loans. To qualify for a jumbo loan, you typically need a higher credit score, a lower debt-to-income ratio, and a larger down payment. Lenders may also require additional documentation, such as income verification and asset statements.
What are the benefits of a Jumbo Loan?
A jumbo loan can provide several benefits for homebuyers who need to borrow larger amounts of money to purchase their dream home. One of the primary benefits of a jumbo loan is that it allows homebuyers to finance properties that exceed the conforming loan limits. This can be especially helpful for buyers in high-cost areas where homes prices can easily exceed the limit. Jumbo loans can also be a good option for borrowers with high credit scores and low debt-to-income ratios.
Why should you get a Jumbo Loan?
If you're in the market for a home that qualifies for a jumbo loan, this program may be a perfect fit for your needs. Jumbo loans can enable you to buy a larger or more expensive property than you would be able to finance with a conventional loan. They can help you avoid the hassle of taking out multiple loans or having to use your savings to finance a large down payment. These factors can help you qualify for lower interest rates and better terms, which can save you money over the life of the loan.