Jumbo Loans Are Back!
Jumbo loans have returned to the market at up to 90% LTV on purchases.*
If you are looking to purchase a home in California and your loan will exceed the conventional loan limits, you need a jumbo loan.
See information below on what a jumbo loan is in detail and how to qualify for financing.
*California Properties Only
What is a jumbo loan?
First of all, when properties are too expensive for a conventional conforming loan, a Jumbo Loan is a mortgage option that can be used. The maximum amount for a conforming loan in most counties is $510,400. The limits are determined by the Federal Housing Finance agency (FHFA). If you exceed the loan limit for your county, you need a jumbo loan.
Also, check your county limit here: California Conforming Loan Limits by County.
Furthermore, jumbo loans are also called non-conforming conventional mortgage and are considered a high risk loan for lenders because Fannie and Freddie do not guarantee the loan. Meaning, the lender is not protecting in the event of default by the borrower.
Finally, a fixed interest rate or an adjustable interest rate is typically available.
How do I qualify for a jumbo loan?
Jumbo Loans are back!
- Typically require a minimum 700 credit score, in some cases 720.
- Max 45% debt to income ratio. The lender requires this to ensure you are not over-leveraged. If you have a large amount of cash reserves the lender may be more flexible on DTI.
- Cash reserves are typically required in the amount to cover 12 months PITI payment.
- Jumbo loans require MORE documentation than a conforming loan. These items include but are not limited to Full Tax Returns, w-2’s and 1099’s, in addition to bank statements and information on investment accounts.
- Some lenders may require a second appraisals.
Some additional Facts about Jumbo Loans:
What you need to know about Jumbo Loans
- As low as 10% of the purchase price for down payment.
- Interest Rates are higher than those conforming loans.
- Closing costs tend to be higher with a jumbo loan.
Finally, please feel free to give us a call to answer any questions on the Jumbo Loan and/or discuss your loan and get today’s current rates and pricing.
Jumbo Loans are back!
Be safe out there during this time and remember VALOR IS STILL serving YOU!
In conclusion, we are never too busy for your referrals.
