85% LTV Jumbo loans now available
A jumbo loan is a portfolio loan which exceeds $417,000 loan amount. Jumbo Loans are also called non-conforming loans because they do not conform to Fannie Mae and Freddie Mac Mortgage Lending Guidelines. Fannie Mae and Freddie Mac cap all Jumbo Loans to a maximum of $417,000 loan size. Any home loan greater than the $417,000 loan limit is considered a Jumbo Loan. Most jumbo loan lenders require a 75% loan to value for new purchase mortgage loans and refinance mortgage loans. There are a few jumbo mortgage lenders that will accept a 80% loan to value mortgage loan. Any mortgage loans over the 80% loan to value mark require private mortgage insurance. We now have a special product called LPMI 85% LTV Jumbo loans. LPMI stands for Lender Paid Mortgage Insurance and the mortgage loan borrower does not need to pay the monthly private mortgage insurance. The private mortgage insurance premium is built into the rate. Current rates on 85% LTV Jumbo loans start at 5.625%.
Qualifications for 85% LTV Jumbo loans
To qualify for 85% LTV Jumbo loans, the borrower must have a minimum of a 740 FICO credit score, and have a debt to income ratio no greater than 41% and must meet Freddie Mac underwriting guidelines. To qualify for 85% LTV Jumbo loans, the borrower must also have four months of reserves which can be cash, securities, or retirement accounts. The new home needs to be their primary residence and the borrower’s assets, income, and liabilities are taken into account. The borrower cannot have any lates on any mortgage payments in the past 12 months and no lates on any credit account in the past 6 months.
Compensating factors for 85% LTV Jumbo loans
If borrowers do not qualify for 85% LTV Jumbo loans, we can take a look at your credit and financial profile and see what we can do to qualify them. If the borrower’s credit score falls below the 700 FICO credit score, we can see what we can do to boost the borrower’s credit score to hit the 700 FICO minimum credit score requirement. It can be as simple as paying down a loaded up credit card and doing a rapid rescore. If the debt to income ratio exceeds the 41% minimum debt to ratio requirements, a quick fix might be to pay off a credit tradeline or two or even an auto loan and then doing a rapid rescore. We can probably used asset based income to qualify for additional income. We can use 5% of your assets as additional income. Assets can be cash, pension, securities, retirement accounts, or other liquid investment accounts.