Jumbo Loans and How to Qualify
Jumbo loans or jumbo mortgages are a form of home financing where the total amount available exceeds the conforming loan limits that have been set in place by the Federal Housing Finance Agency or FHFA. These special jumbo mortgages are very different from conventional mortgages because they are not able to be purchased, secularized or guaranteed by Fannie May or Freddie Mac. Essentially designed to help finance luxury homes and properties, jumbo loans are most often utilized in real estate markets that are highly competitive. Additionally, they come with a set of unique tax implications and underwriting requirements.
How to Qualify for a Jumbo Loan
Interested in qualifying for a jumbo loan? If you have fallen in love with a home or property that costs around $500,000 or more and you have significantly less than that saved up, you’ll definitely need to consider a jumbo mortgage loan. And to get approved for one, you’ll need to meet much more than the credit requirements for homeowners who are applying for a conventional loan – because there is much more risk involved with super jumbo mortgages.
To get approved, you will need a credit score of 700 or above and a debt-to-income ratio that is below 43 percent, preferably closer to 36 percent. Additionally, you will need to prove that you have access to enough cash to make your jumbo mortgage payments.
Interest Rates for Jumbo Loans
One of the other great benefits of jumbo loans is the fact while they used to carry much higher interest rates than conventional mortgages, in recent years that gap has closed significantly. In fact, today’s interest rates for jumbo loans are often on par with conventional mortgage loans and in some cases, are even lower!
Contact Mortgage Investors Group Today
Want to learn more about the benefits of jumbo loans? Contact our friendly and experienced team today for more information.