Jumbo Mortgage Options

Traditional and Non-Prime Jumbo Mortgage Options

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 is foreclosed.

Due to the higher risk of 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. The following paragraphs will discuss traditional and non-prime jumbo mortgage options.

What Are Jumbo Mortgages?

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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 exceeding maximum loan limits. Gustan Cho Associates has traditional and non-prime jumbo mortgage options for our borrowers.

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 2023, the maximum conforming limit on conventional loans is $726,200 in standard counties in the United States. Some counties in the United States have higher-than-average-priced homes. Counties with higher-priced homes are called high-cost areas.
What Are High-Balance Mortgage Loans in High-Cost Areas

Buying Higher-Priced Homes in High-Cost Areas with High-Balance Loans

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 a high-balance VA loan or VA jumbo loan.

High-Balance Conventional Jumbo Loans

Gustan Cho Associates offers various 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 $1,089.300 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.

High-Balance FHA Jumbo Loans

High-Balance FHA Jumbo Loans are FHA loans exceeding the maximum $472,030 standard FHA loan limit in high-cost counties. FHA jumbo loans, called FHA high-balance loans, have a loan cap on the maximum FHA loan limit in high-cost areas. For 2023, the maximum FHA loan limit in high-cost areas is capped at $1,089.300 in high-cost counties.

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 loan. It is called VA jumbo loans due to loan level pricing adjustments (LLPAs) and lender overlays by individual lenders. Most lenders have higher lending requirements on VA jumbo loans.

Do Jumbo Loans Require Tax Returns?

Traditional jumbo mortgages require full-doc. Full-doc mortgages require income verification, including income tax returns for the past two years, W2s, 30 days of paycheck stubs, income verification, and at least a 700 credit score minimum. Many self-employed or business owners face hurdles in qualifying for traditional full-doc jumbo loans due to unreimbursed business expenses.

What Are Non-Prime Jumbo Loans?

Non-prime jumbo loans, often called non-QM jumbo loans or nontraditional jumbo mortgages, have different types of mortgages and options for self-employed borrowers with no income tax returns it or income documentation is required.

The most common non-prime jumbo mortgage loan is the 12-month 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.

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 on jumbo loans with a 10% down payment mortgage program is required.  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. 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.

12-Month Bank Statement Loans For Self-Employed Homebuyers

The 12-month 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.

Only bank statement deposits are used for calculating verified, qualified income on bank statement loans for self-employed borrowers.

Income on bank statement loans is based on averaging the past 12 months’ bank statement deposits. 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.

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 do not have unformed 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.

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