Gustan Cho Associates are experts in helping high-end homebuyers qualify for jumbo mortgages with countless traditional and non-prime jumbo mortgage options. Traditional jumbo mortgages have higher credit and income requirements than conventional loans. Jumbo loans are riskier loans for lenders. It takes longer for a high-end home to sell if the home was foreclosed. Due to the higher risk on jumbo loans, credit requirements and terms are tougher than conforming loans. Mortgage rates are higher than conforming mortgage rates. We will explain the differences between traditional and non-prime jumbo mortgage options for borrowers of high-end homes.
USEFUL LINK: Types of Jumbo Mortgage Loan Options
What Are Jumbo Mortgages?
Jumbo mortgages are mortgage loans that exceed the maximum conforming loan limits. Jumbo loans are called non-conforming loans because they do not conform to the maximum Fannie Mae and Freddie Mac conforming loan limit. Fannie Mae and Freddie Mac are the two largest buyers of mortgages in the secondary market. Fannie Mae and Freddie Mac will not purchase loans that exceed the maximum loan limits. Gustan Cho Associates has traditional and non-prime jumbo mortgage options for our borrowers.
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What Are High-Balance Mortgage Loans in High-Cost Areas?
Any mortgage loans exceeding the maximum conforming loan limit of Fannie Mae and Freddie Mac are jumbo mortgages. Jumbo mortgages are any home loan that exceeds the maximum conforming loan limit set by the FHFA. By 2022, the maximum conforming limit on conventional loans is $647,200 in standard counties in the United States. There are counties in the United States that have higher than average priced homes. Counties with higher-priced homes are called high-cost areas.
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Buying Higher-Priced Homes in High-Cost Areas with Government and Conforming High-Balance Loans
FHA and Conventional loans have higher maximum loan limits in high-cost areas. FHA and Conventional loans have higher loan limits in high-cost counties. The maximum FHA and Conforming loan limits in high-cost areas are called high-balance loans, or FHA jumbo loans and Conforming jumbo loans. VA loans do not have a maximum loan limit but any VA loan balance higher than the standard conforming loan limit is called high-balance VA loans or VA jumbo loans.
USEFUL LINK: High-Balance Loans in High-Cost Areas
High-Balance Conventional Jumbo Loans
Gustan Cho Associates offers a wide variety of jumbo mortgage options on traditional and non-QM jumbo loans. High-balance mortgage loans in high-cost areas are a great jumbo loan program for which homebuyers can qualify. HUD and the FHFA have increased the FHA and Conforming loan limit in high-cost counties to $970,800 on single-family homes. Homebuyers can qualify for an FHA high-balance loan with a 3.5% down payment with a minimum 580 credit score. Homebuyers in high-cost counties can qualify for a 3% to a 5% down payment home purchase high-balance conventional loans with a 620 credit score. First-time homebuyers can qualify for a conventional loan with a 3% down payment. Per Fannie Mae and Freddie Mac agency guidelines, a first-time homebuyer is a buyer who has not owned a home in the past three years.
USEFUL LINK: High-Balance Conventional Loans
High-Balance FHA Jumbo Loans
High-Balance FHA Jumbo Loans are FHA loans that exceed the maximum $420,680 maximum standard FHA loan limit in high-cost counties. FHA jumbo loans are called FHA high-balance loans has a loan cap on the maximum FHA loan limit in high-cost areas. For 2022, the maximum FHA loan limit in high-cost areas is capped at $970,800 in high-cost counties.
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High-Balance VA Jumbo Loans
Gustan Cho Associates offers VA jumbo loans with no lender overlays. VA loans do not have maximum loan limits. However, any VA loan with a balance higher than the maximum conforming loan limit is called a High-Balance VA Jumbo Loan or VA jumbo loans. The reason it is called VA jumbo loans is due to loan level pricing adjustments (LLPAs) and lender overlays by individual lenders. Most lenders have higher lending requirements on VA jumbo loans.
USEFUL LINK: VA Jumbo Loans in High-Cost Areas
Do Jumbo Loans Require Tax Returns?
Traditional jumbo mortgages require full doc. Full doc mortgages are loans that require income verification including income tax returns for the past two years, W2s, 30 days of paycheck stubs, verification of income, and at least a 700 credit score minimum. Many self-employed or business owners face hurdles qualifying for traditional full-doc jumbo loans due to unreimbursed business expenses.
USEFUL LINK: Jumbo Mortgages With No Tax Returns
What Are Non-Prime Jumbo Loans?
Non-prime jumbo loans often referred to as non-QM jumbo loans or nontraditional jumbo mortgages, have different types of mortgages and options for self-employed borrowers with no income tax returns required. The most common non-prime jumbo mortgage loan is the 12-months bank statement loan for self-employed borrowers. The bank statement mortgage for self-employed borrowers is an income doc mortgage program without income tax returns required. Qualified income is calculated by averaging the deposits in bank statements for the past 12 months. Withdrawals do not count. We have other types of mortgages that do not require income tax returns.
USEFUL LINKS: Jumbo Loans For Self-Employed Borrowers
10% Down Payment Jumbo Loans | 90 LTV Jumbo Mortgages
Traditional jumbo lenders require prime credit borrowers with a 20% down payment and at least a 700 credit score. Gustan Cho Associates has a traditional full-doc jumbo loan program with a 10% down payment. The 90 LTV jumbo mortgage program is for prime borrowers with a 720 FICO. Full documentation is required on jumbo loans with a 10% down payment mortgage program. The 90 LTV jumbo mortgages do not require private mortgage insurance. One of the best jumbo mortgage options for prime full-doc borrowers. Available for owner-occupant homes, and second homes on purchase and refinance transactions. Mortgage rates on 90 LTV jumbo mortgages are very competitive versus the competition.
Is It Hard For Self-Employed Borrowers To Qualify For Jumbo Loans?
Gustan Cho Associates has over 80 non-Prime jumbo lenders for self-employed borrowers or business owners. Jumbo mortgage options for nontraditional jumbo mortgages for self-employed borrowers include the bank statement mortgage loan program with no income docs required. No income tax returns are required on the jumbo bank statement loan program.
USEFUL LINK: Non-Prime Jumbo Loans For Self-Employed Borrowers
12-Months Bank Statement Loans For Self-Employed Homebuyers
The 12-months bank statement loans for self-employed home buyers do not require income tax returns. Lenders assume the borrower’s income tax returns have substantial unreimbursed business expenses, therefore only bank statement deposits are used for calculating verified qualified income. Income is based on taking the past 12 months’ bank statement deposits and averaging them over 12 months. The monthly average deposit is the qualified income used. Withdrawals do not matter. For example, a borrower can make an average of $10,000 per month deposit and withdraw $9,999.00 the next day and the amount used will be the deposit amount. Withdrawals or the daily balance do not count.
Jumbo Mortgage Options For Low Credit Score Borrowers
Gustan Cho Associates has non-traditional jumbo mortgages with low credit scores. Non-traditional credit score jumbo mortgages are a popular jumbo loan program for borrowers with lower credit scores. The down payment requirements are based on the borrower’s credit scores. For example, borrowers with credit scores down to 550 FICO and bad credit can qualify for Jumbo loans with low credit scores with a 40% down payment.
USEFUL LINK: Jumbo Loans With Low Credit Scores
Jumbo Mortgage Options in Choosing The Best Mortgage Lenders For Traditional and Non-Prime Jumbo Loans
There are thousands of jumbo lenders. However, choosing the best mortgage lender for your type of jumbo loan program is the key to getting approved quickly with the best terms and rates available. Unfortunately, jumbo loans due not have unform agency lending guidelines like government and conventional loans. Jumbo mortgages are nonconforming loans so it is up to the individual lender to make its own lending requirements on their jumbo mortgage loan program.