Jumbo Mortgage Guidelines During The COVID-19 Pandemic

This Article On Jumbo Mortgage Guidelines During The COVID-19 Pandemic

UPDATED 2020 Jumbo Mortgage Guidelines During The COVID-19 Pandemic On Jumbo Loans:

As Americans continue to struggle with the COVID-19 coronavirus outbreak, the mortgage industry is still feeling the ripple effect
While mortgage companies are very busy, many jumbo mortgage products have changed procedures and qualifications
Most lenders have added additional LENDER OVERLAYS to their mortgage products during these times, jumbo mortgage products were hit even harder
In this blog, we will explain what a jumbo mortgage means and detail on how to obtain a jumbo mortgage during the coronavirus outbreak

In this article, we will discuss and cover the 2020 UPDATED Jumbo Mortgage Guidelines During The COVID-19 Pandemic.

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What Are Jumbo Loans

What is a jumbo mortgage?

A jumbo mortgage is any mortgage loan where the loan amount is greater than the county conforming loan limit
The conforming loan limit is $510,400 for the calendar year of 2020 in most counties across the United States
There are many counties across the nation that are considered “high balance”, where the average median cost of a home is greater than $510,400
In areas such as San Francisco California, Denver Colorado, and Fairfax, Virginia the average home costs more than the conforming loan limit
Fannie Mae and Freddie Mac will allow counties to have high balance loan limits all the way up to $765,600
In a high balance county, any loan amount above that number will be considered a jumbo mortgage

Click this MAP to see where the high balance areas are located.

Jumbo Mortgage Guidelines During The COVID-19 Pandemic: Eligibility Requirements

Are the qualifications for jumbo mortgages different?

The qualifications for a jumbo mortgage are much more strict compared to a conventional or FHA financing
Since you are borrowing such a large sum of money, it makes sense for the guidelines to be more strict
The main difference between a conventional and a jumbo mortgage is the reserve requirement
Reserves are liquid assets available after you pay down payment and closing costs
Many jumbo products require 12 months of the mortgage payment to be in your bank after closing

There are jumbo programs that allow less and they are jumbo programs that require more reserves.

Credit Score Requirements On Jumbo Mortgages

Credit score requirements on jumbo mortgages are also higher.

Some of the most favorable jumbo mortgage products require a 720 or even a 740 credit score or higher
Generally speaking, the higher the credit score the better loan terms you look at in the lower reserve requirement
You can still obtain a jumbo mortgage with credit scores in the 600’s

Most jumbo programs will start at credit scores of 680 or higher, but programs are available with lower credit scores.

Changes On Jumbo Mortgage Guidelines During The COVID-19 Pandemic

During the COVID-19 coronavirus outbreak, we saw many loan programs disappear overnight.

Most jumbo mortgages and NON-QM mortgage lending products were put on hold
NON-QM programs have slowly returned with more strict underwriting requirements
It used to be possible to get a jumbo NON-QM mortgage loan with a 600 credit score and only 3 months reserves
Now the requirements are upper 600’s with at least 6 months of reserves
However, we see the trend going back to normal

As we deal with the COVID-19 coronavirus, we should see improvements to the NON-QM products moving forward.

VA Jumbo Mortgage Guidelines

VA jumbo mortgages:

With the Blue Water Navy Vietnam Veterans Act of 2019, there is no longer a loan limit for VA mortgage lending
VA mortgages used to follow the conforming loan limit until January 1, 2020
After January 1, there is no longer a max loan limit before a down payment is required for VA mortgage lending
Our investors will go up to a loan amount of $3 million without a down payment
Of course, the veteran must qualify based on credit, payment history, and reserve requirements

Since there is no longer a loan limit, the industry refers to a VA jumbo mortgage as a VA loan above $510,400 (for 2020).

Non-QM Jumbo Mortgage Guidelines During The COVID-19 Pandemic

Non-QM jumbo mortgages. NON-QM jumbo mortgages are just now returning since the outbreak started.

As mentioned above, they do have additional requirements
BANK STATEMENT LOANS are incredibly popular for self-employed borrowers
These programs went away right after the outbreak but are now available again
There are additional requirements based on the current bank statement
An underwriter must prove that you have been able to work during the outbreak
Your income will be calculated accordingly
If you have not had an income since the outbreak, you are more than likely not eligible to qualify for a Jumbo loan

You must have current business-related deposits to verify your business has current income.

Traditional Jumbo Mortgage Guidelines

Standard jumbo mortgage product. It is no secret that interest rates are incredibly low during these unprecedented times.

The economy is in a tailspin and the FEDERAL RESERVE cannot raise rates on the American people right now
Jumbo mortgage rates are very low
If you feel like your rate is high please give us a call today on 630-659-7644
Mike Gracz will be able to provide you with a rate quote from a licensed loan officer in your state
Most jumbo mortgage products typically require a 12-month reserve threshold as well as a 680 credit score or higher
Depending on the loan program, your debt to income usually needs to be below 43%
Many products were as low as 41%
The highest loan to value currently available is 90% CLTV
That means combined loan to value

The first jumbo mortgage will be up to 80% loan to value and you are eligible to use secondary financing for the remaining 10%.

95% LTV Non-QM Jumbo Loans

95% jumbo mortgage loan without mortgage insurance.

This loan program is currently on hold due to the COVID-19 coronavirus outbreak
We have received many phone calls during these months asking if this product is available
As of today, it is not available
There is no clear timeline on if and when this product will be available again.

There is no clear timeline on if and when this product will be available again. Gustan Cho Associates will keep our viewers updated when the 95% LTV Non-QM loan program becomes available.

Refinancing Jumbo Mortgage Guidelines

Jumbo refinance?

Many Americans who are currently in a jumbo mortgage can benefit greatly from refinancing their mortgage loan
Interest rates are incredibly low, and this can be a great time to take it vantage of the market
Cash-out jumbo mortgages are currently back in circulation
This could be a great opportunity to lower your overall monthly payments with the equity in your home
For a cash-out jumbo mortgage, quote call Mike Gracz on 630-659-7644 or email mgracz@gustancho.com

Gustan Cho Associates are your one-stop-shop for mortgage questions. We have more mortgage programs available than most lenders. We have a full slate of jumbo mortgage products to assist our clients. Please call Mike Gracz on 630-659-7644 to discuss any jumbo mortgage questions you may have. We are available seven days a week and on weekends.