What Are Jumbo Mortgage Loans?
For home buyers with higher net worth and income and who want to purchase a high end home, they may not qualify for a conforming mortgage loan not because the home buyer’s credit is bad but because the mortgage amount they are seeking is higher than the $417,000 conforming limits. A conforming loan is a mortgage loan that conforms to Fannie Mae and/or Freddie Mac mortgage lending guidelines which is capped at $417,000. Any mortgage loans that is greater than $417,000 is called a non-conforming loan and a Jumbo Mortgage falls in the non-conforming category.
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 a high end property. In the event of a mortgage loan default, it will take longer to liquidate a Mac Mansion than it would a standard average home. Jumbo mortgage loans are mortgage loans that are higher than $417,000. Jumbo Mortgage lenders expect stellar credit from Jumbo Mortgage loan applicants. Lowest credit scores to qualify for a Jumbo Mortgage is 700 FICO. For the best Jumbo Mortgage rates, a Jumbo mortgage loan borrower should have credit scores north of 740 FICO.
Jumbo Mortgage Loans Lending Guidelines
Home buyers can qualify for a conventional mortgage loan with a 3% down payment. However, that is different with Jumbo loans. Most Jumbo Mortgage lenders will require a minimum of 20% down payment. Many other Jumbo mortgage lenders will want 25% down payment or 30% down payment for Jumbo mortgage loans higher than $1 million. To get the best Jumbo mortgage rates, you would need to put a 25% down payment because the larger down payment minimizes risk to the Jumbo mortgage lender. The more down payment you put down on a Jumbo mortgage, the lower your interest rate will be. The higher your credit score, the lower your interest rate on a Jumbo mortgage will be. Multi million dollar jumbo loans may require larger down payments.
10% Down Payment On Jumbo Mortgages
There are 10% down payment on Jumbo Mortgage loans, however, plan on paying 5.0% or higher interest rates on such program. Also, to qualify for a 10% Jumbo mortgage loan, you need a credit score north of 740 FICO and 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 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 $417,000 plus a second mortgage at the same time for a home purchase. The home buyer will need to check with the primary conventional mortgage lender whether or not they will allow that. There is a loan to value and their is a culmulative loan to value which is referred to as CLTV. Many conventional mortgage lenders will permit a home buyer to have a maximum CLTV of up to 90% which means you take a first mortgage with 10% down payment, get a second mortgage for the difference and your first mortgage will be capped at $417,000.
Jumbo Mortgage With Low Credit Scores
I can help high end home buyers who are seeking a Jumbo Mortgage with low credit scores. If you credit scores is under 680 FICO and you have a debt to income ratio under 40% DTI, I can qualify your for a Jumbo Mortgage. You can contact me at 262-716-8151 or click APPLY NOW FOR JUMBO MORTGAGE and complete the 4 page online mortgage application. I will contact you once your submit your Jumbo Mortgage loan application and see if I can get you approved for your Jumbo Loan.
Gustan Cho NMLS 873293
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