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With a jumbo mortgage, you’ll get low rates for your big loan. Offering a choice between fixed or adjustable rates, our jumbo loans offer maximum flexibility for home financing for larger loans.
If you answered “Yes” to any of these questions, a jumbo loan might be right for you. Call us at (480) 699-1055, or click “Apply Online” to the right of this page to get started now!
Jumbo loans, also known as jumbo mortgage, is financing that has exceeded the limit set by the FHFA or Federal Housing Finance Agency. Fannie Mae or Freddie Mac cannot guarantee this type of loan and is designed to finance luxury purchases. A jumbo loan comes with its unique underwriting requirements and tax implications.
A jumbo loan is different in every state or county as the FHFA sets a limit size on the other areas annually.
When you plan to buy a new property, you may need a mortgage to finance the purchase. The federal government has a set limit on the amount that you can borrow, and as long as the property is within the limit, there is no problem.
However, when you plan to buy a jumbo house, you will need a jumbo loan that can give you more considerable funds. The credit requirements of this kind of loan are stricter than the conventional loan because there is a higher risk on the part of the lender being not guaranteed by Fannie Mae or Freddie Mac. The money involved in a jumbo loan is also high.
Jumbo loans have higher interest rates than conventional loans. Today, annual percentage rates for jumbo loans are at par with conventional mortgages, sometimes lower.
While the government entities cannot handle and guarantee jumbo loans, other financial institutions can securitize them.
Downpayment requirements for jumbo mortgages have lowered over time. In the past, lenders require 30% of the purchase price. Today, it has reduced to 10%-15% compared to the 20% downpayment for conventional mortgages.
Several factors determine the amount you can borrow, such as your assets, credit score, and the value of the property you plan to buy. Jumbo mortgages cater to high-income earners but do not have millions of extra cash or other accumulated assets. Here are some of the criteria for jumbo loans.
Credit score
Lenders will require your credit score to be 700 or higher, sometimes even 720.
Debt-to-income ratio
This is another factor that lenders consider. Some jumbo loan lenders will have a strict cap of 45%. This will ensure that you don’t become over-leveraged.
Cash in bank
When you have enough cash reserves, there is a higher chance of getting approved for a jumbo loan. This will show that you are capable of covering at least one year of mortgage payments.
Documentation
To further qualify for a jumbo loan, you need to provide documents such as full tax returns, W-2s, and 1099s. Investment accounts and bank statements may also be required.
Given that a jumbo loan can get quite tricky, you need a reliable mortgage lender. This is where Blake Mortgage comes into play. For over 20 years, we have helped many clients get their needed funds to purchase their dream homes. With Blake Mortgage, you can expect a personalized approach.