Jumbo Mortgage Loans With Lower Credit Scores And No Tax Returns
This BLOG On Jumbo Mortgage Loans With Lower Credit Scores And No Tax Returns Was UPDATED And PUBLISHED On August 17th, 2019
For home buyers with higher net worth and income and are in the market to purchase a higher-end home, they may not qualify for a conforming mortgage loan. This is not because the home buyer’s credit is bad but because the mortgage amount they are seeking is higher than the $484,350 conforming limits.
- A conforming loan is a loan that conforms to Fannie Mae and/or Freddie Mac mortgage lending guidelines which is capped at $484,350
- Any mortgage loans that are greater than $484,350 is called a non-conforming loan
- Jumbo Mortgage falls in the non-conforming category
In this article, we will cover and discuss Traditional Versus Non-Conforming Jumbo Mortgage Loans.
Traditional Jumbo Mortgage Lenders
Jumbo mortgage lenders have tougher mortgage lending guidelines than government and conventional mortgage lenders.
- The reason being is due to the higher risk involved with higher-end properties
- In the event of a loan default, it will take longer to liquidate a Mac Mansion than it would a standard average home
- Jumbo mortgage loans are home loans that are higher than $484,350
- Jumbo Lenders expect stellar credit from traditional Jumbo borrowers
- Lowest credit scores to qualify for traditional Jumbo Mortgages is 700
For the best Jumbo Mortgage rates, the borrower should have credit scores north of 740.
Traditional Jumbo Mortgage Loans Lending Guidelines
Homebuyers can qualify for a conventional mortgage loan with a 3% down payment.
- However, that is different with Jumbo loans
- Most lenders will require a minimum of 20% down payment
- Many other lenders will want 25% down payment
- 30% down payment for Jumbo mortgage loans higher than $1 million
- To get the best Jumbo mortgage rates, borrowers would need to put a 25% down payment
- This is because the larger down payment minimizes risk to lenders
- The more down payment down on a Jumbo mortgage, the lower the interest rate will be
- The higher the credit score, the lower the interest rate
Multi-million dollar jumbo loans may require larger down payments.
10% Down Payment On Traditional Jumbo Mortgages
There are 10% down payment on Jumbo Mortgage loans. However, plan on paying higher interest rates on such a program.
- Also, to qualify for a 10% Jumbo mortgage loan borrowers need a credit score north of 740
- Debt to income ratios not greater than 40% DTI
- No bankruptcies, foreclosures, deed in lieu of foreclosures, or short sale in the past 7 years
Interest rates on Jumbo mortgage loans are generally higher than conventional loans. This is due to the risk factor the Jumbo mortgage lender is taking.
Conventional Loan Plus Second Mortgage On High-End Home Purchase
To take advantage of the lower down payment requirement and lower interest rate, a high-end home buyer can take out a conventional loan of $484,350 plus a second mortgage at the same time for a home purchase.
- The home buyer will need to check with the primary lender whether or not they will allow that
- There is a loan to value requirement
- Cumulative loan to value which is referred to as CLTV
- Many lenders will permit a home buyer to have a maximum CLTV of up to 90%
- This means homebuyers take the first mortgage with 10% down payment, get a second mortgage for the difference
The first mortgage will be capped at $484,350.
Non-Conforming Jumbo Mortgage Loans
Gustan Cho Associates Mortgage Group offers non-conforming Jumbo Mortgage Loans.
- There are Non-QM loans where there are no waiting period requirements after housing event and/or bankruptcy
- We also offer Jumbo Mortgages For Self Employed borrowers where there is no income tax required
- We require 12 months of bank statements
- Personal or business bank statements are allowed
- If borrowers decide on using 12 months bank statement deposits averages, then 100% of deposits are averaged over 12 months and that figure will be borrowers monthly gross income
- If business bank statement deposits are averaged, then 50% of deposits are averaged over the past 12 months and that figure is borrowers monthly gross income
- Withdrawals do not count
- 10% to 20% down payment is required and the amount of down payment depends on borrowers credit scores
- Lowest credit scores for Non-QM Jumbo Mortgages allowed is 500 FICO
The higher the credit scores and larger the down payment the lower the mortgage rates.
Jumbo Mortgage With Low Credit Scores
I can help high-end home buyers who are seeking a Jumbo Mortgage with low credit scores. Homebuyers with credit scores under down to 500 FICO and debt to income ratio under 45% DTI, we can qualify borrowers for a Jumbo Mortgage. Home Buyers can contact us at Gustan Cho Associates Mortgage Group at 262-716-8151 or text us for faster response. Or click APPLY NOW FOR JUMBO MORTGAGE and complete the 4-page online mortgage application. Or you can email us at firstname.lastname@example.org.
Gustan Cho NMLS 873293