Jumbo Loans With Low Down Payment And Bad Credit On Purchases


Jumbo Loans With Low Down Payment And Bad Credit On Purchases

This BLOG On  Jumbo Loans With Low Down Payment And Bad Credit On PurchasesWas Written By Michael Gracz Of Gustan Cho Associates Mortgage Group

Jumbo Loans With Low Down Payment And Bad Credit On Purchases are starting to make a comeback across the United States. Since these are not agency loans, requirements and guidelines vary from lender to lender.

An agency loan fits into the categories of the following:

  • Freddie Mae
  • Fannie Mac
  • VA
  • USDA
  • FHA

Borrowers must follow the respective agency guidelines. All agency mortgage loans have maximum mortgage loan amounts associated with them. So what happens if home buyers want to buy a home for an amount over their maximum loan amount?

There are two options

  1. Pay the amount over the max loan amount in cash
  2. Or obtain a JUMBO mortgage

Mortgages After 2008 Real Estate Meltdown

In the year 2018 we are still seeing many side effects from the market crash of 2008. Jumbo Loans With Low Down Payment And Bad Credit were non-existent until recently. Jumbo Mortgage Lenders want the cream of the crop borrowers.

  • This crash affected many Americans
  • Over the past decade some of those effected have done a great job recovering
  • Jumbo financing comes with very strict guidelines on many financial events such as the following:
    • credit score requirements
    • debt to income ratio requirements
    • down payment requirements
    • bankruptcies
    • foreclosures
    • short sales
    • deed in lieu
    • even late payments on credit report

Many Americans who were hurt in the real estate crash of 2008 are now once again in the jumbo market. But may find themselves unable to qualify for Jumbo Loans With Low Down Payment And Bad Credit.  In this case home buyers who need to qualify for Jumbo Loans With Low Down Payment And Bad Credit may want to take a look at Non-QM jumbo loans. Please contact Michael Gracz of Gustan Cho Associates at 630-659-7644 for more details and see if you fit into a Non-QM Loan.

What Are Non-QM Loans And Who Are Eligible?

The term “Non-QM” stands for non-qualified mortgage. Please reference blog (https://gustancho.com/non-qm-mortgages-for-self-employed-borrowers ).

  • A Non-QM loan simply means it does NOT have to follow Freddie Mac and Fannie Mae FHA, USDA, or VA guidelines
  • Allowing many more borrowers to qualify
  • These loans require at least 10% to 20% down payment on home purchase
  • Down Payment is based on borrowers credit scores
  • They may require a slightly higher down payment for lower credit score borrowers
  • There are also asset depletion and Bank Statement loans available
  • Using alternative income does have a slight change on the interest rate

Please contact Mike Gracz of Gustan Cho Associates Mortgage Group at 630-659-7644 for further information. Mortgage Borrowers calling from a state Mike Gracz is not licensed in, they will be referred to another associate of The Gustan Cho Team. Borrowers who have been turned down for a jumbo loan can now qualify with us and will benefit for researching this Non-QM product.

Key Features On Jumbo Loans With Low Down Payment

What are some key features about a Non-QM Jumbo Loans With Low Down Payment?

  • The main advantage is the ability to only need 10% down without any added mortgage insurance or secondary financing
  • The 10% down payment jumbo Non-QM loan only requires a minimum credit score of 660
  • Reserve requirement of six months PITI
  • This is incredibly lax compared to most jumbo financing guidelines
  • This is true for long amounts up to $2 million

Not too many folks believe that home buyers can qualify Jumbo Loans With Low Down Payment and Bad Credit. However, it is true. Gustan Cho Associates Mortgage Group are experts in NON-QM Jumbo Mortgages and alternative financing loan programs. We are direct lenders with no mortgage overlays on government and conventional loans.

Jumbo Loans With Low Down Payment With 600 Credit Scores

Let’s use another situation for a borrower and a credit score of 600.

  • This loan program they would only require a 15% down payment and six months of reserves
  • These also have a maximum debt to income of 40/45%
  • Majority of jumbo financing is capped at 36% back in debt income ratio
  • Please read that again, a JUMBO mortgage with 15% down and a score down to 600!!!

If borrowers have more than one applicant on the mortgage, the primary wage earners middle credit score is used to calculate down payment needed and interest rate. That right there is a game changer! They take a common sense approach to underwriting. If you have a unique situation and would like to get your scenario reviewed by an underwriter, please contact Mike Gracz on 630-659-7644.

Reserve Requirements On NON-QM Jumbo Mortgages

Very lax reserve requirements for Jumbo financing. 6 month reserves are needed.

  • THERE ARE exceptions on a case by case basis
  • Let’s circle back to common sense underwriting
  • A few key characteristics that will allow the reserve waiver lowered or even eliminated:
  • 24 months of on time Mortgage/ rental payments
  • High credit scores
  • Larger down payment
  • No Bankruptcy or foreclosure, short sales, deed in lieu for 60 plus months

In other words, if the only parameter you do not meet is the reserve requirement, borrowers more than likely will get a waiver. Michael Gracz from The Gustan Cho team is the expert!

If you’re apprehensive about the Non-QM jumbo mortgage, please understand the requirements for documentation are the same for all loan programs. We will try to fit you in your everyday jumbo mortgage loan, if you qualify. As talked about in this article, many borrowers looking to enter a jumbo mortgage have suffered financially over the past 10 years. These loans can be used as a band aid loan, meaning you can refinance out of them. When utilizing a Non-QM jumbo mortgage on an owner-occupied property, there will never be a prepayment penalty. This is a great option to get you into your dream home while you wait for foreclosure, short sale, or deed in lieu seasonings and in some cases bankruptcy seasonings to elapse. Please contact Mike Gracz at 630-659-7644 or text Michael for faster response to go over Non-QM Jumbo mortgage and long term mortgage goals!

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