How Do I Qualify For Jumbo Mortgage Loans On A High-End Home
October 25, 2021 - 4 min read
How Do I Qualify For Jumbo Mortgage Loans During Booming Housing Market
How Do I Qualify For Jumbo Mortgage Loans Versus Traditional Government And Conventional Loans
How Do I Qualify For Jumbo Mortgage Loans versus government and conventional loans? Qualifying for a jumbo loan is not much different than qualifying for a government and/or conventional loan with the exception of a higher down payment and higher rates. The jumbo mortgage process and the paperwork required by lenders are the same. The borrower’s credit scores and the down payment requirements can be different. Jumbo loans are considered higher-risk loans. In the event of a foreclosure, it will just take weeks or a few months to have a traditional home under contract. However, it may take months and/or years to sell a foreclosed higher-end home. The ability to repay a jumbo loan is an important factor analyzed by lenders. Lenders will require a lower debt to income ratio on jumbo loans. Most lenders will require six months to 12 months of reserves on jumbo mortgages. Due to the higher risk factors on financing higher-end homes, lenders will charge a higher rate, require a higher down payment on jumbo loans, lower debt to income ratio, and/or reserves. Reserves are one month’s of principal, interest, taxes, and homeowners insurance.