Jumbo Mortgage With 10% Down Payment And No PMI

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this blog, we will cover and discuss Jumbo mortgage with 10% down payment and no PMI. A Jumbo Mortgage is a residential mortgage loan that exceeds the conforming mortgage loan limits. The conforming mortgage loan limit for 2022 is capped at $647,200. in most parts of the United States with the exception of high-cost areas. Alaska and Hawaii and many counties in California have the conforming mortgage loan limit is higher and are designated high-cost areas.

Jumbo Mortgage Loan Limits

Conforming loan limits are higher in high-cost areas. Homebuyers exploring mortgage options may hear the term “jumbo loan.” If you do, you are looking at properties that are more expensive for the area. If you are considering homes requiring a mortgage that exceeds $647,200, it’s a good idea to find out more about jumbo loans and discuss them with mortgage lenders. Gustan Cho Associates are experts in originating, underwriting, and funding 90% LTV jumbo mortgages. A large percentage of our business at GCA Mortgage is originating and funding 10% down payment jumbo loans.

Case Scenario Where Jumbo Loans Are Required

For example, home buyers purchasing a $1,000,000 home and can afford to put a substantial down payment on this home purchase, the maximum a mortgage lender will be able to lend you is $647,200. The $647,200 is the maximum conforming mortgage loan limit. If the homebuyer only has less than a 20% down payment, this can present a problem. This is because the maximum mortgage lender’s limit to lending is capped at $647,200. In this case scenario, buyers would need to seek a jumbo mortgage that requires a less than 20% down payment.

Jumbo Loans Are Loans Higher Than The Conforming Loan Limit

Any mortgage loan that is higher than a $647,200 loan balance is called a non-conforming loan or jumbo loan. Jumbo mortgages are referred to as non-conforming mortgage loans. Jumbo loans are referred to as non-conforming loans because they do not conform to Fannie Mae and Freddie Mac Loan Limits. Jumbo mortgage loans are home loans over the $647,200 conforming loan limits.

Jumbo Loans Explained

Jumbo lenders are different than conventional conforming lenders. This is because each jumbo lenders have their own lending requirements and guidelines. In general, most lenders look at jumbo loans as riskier loans than conforming loans. This is because in the event lenders foreclose a higher-end home, it takes substantially longer to liquidate it on the open market. It takes longer to sell a higher-end 5,000 square feet home than a traditional 2,000 square feet home. Therefore, lending requirements on jumbo loans are higher than conforming loans. Most lenders require a higher down payment of 20% to 25% and a lower debt-to-income ratio on jumbo loans. Lenders normally have a maximum 40% cap on debt to income ratio no jumbo loans. Minimum credit scores are at 700 on jumbo mortgages. 

How Does Traditional Jumbo Mortgage With 10% Down Payment And No PMI Work

Gustan Cho Associates offers a 10% down payment jumbo loan program. This unique 90% LTV jumbo mortgage is a traditional jumbo loan program and NOT a non-QM program. The maximum debt to income ratio is capped at 50%. The minimum credit score requirement for this 10% down payment jumbo mortgage program is 720 FICO. A 720 FICO credit score is considered extremely low for a jumbo mortgage loan applicant.

Lending Guidelines On Jumbo Mortgage With 10% Down Payment And No PMI

Lending Guidelines On Jumbo Mortgage With 10% Down Payment

In general, most Jumbo Mortgage lenders require a minimum of 20% down payment with a 700 credit score. Gustan Cho Associates offers a 10% down payment for traditional jumbo and non-QM jumbo mortgages. Jumbo mortgage with a 10% down payment requires a maximum of 50% debt to income ratios and a minimum credit score of 660 FICO. For those who do not have a 660 credit score, we can help borrowers raise their credit scores to 660 or greater. Sometimes there are quick fixes such as paying down credit cards or establishing new positive credit or even paying off certain debts.

Traditional Versus Non-QM Jumbo Mortgages

Non-QM Jumbo Mortgages require 620 minimum credit scores. 10% to 20% down payment is required on non-QM jumbo mortgages. The amount of down payment depends on the borrowers’ credit scores. The maximum debt to income ratio on a non-QM jumbo mortgage is 55% DTI. There is no private mortgage insurance required on non-QM jumbo mortgages.

Other Jumbo Mortgage Loan Programs

Besides a jumbo mortgage with a 10% down payment, there are other loan programs such as a jumbo mortgage with a 15% down payment. The 15% down payment jumbo mortgage loan program lending requirements are similar to the 90% LTV jumbo mortgage program. There is no private mortgage insurance required. Mortgage rates on the 85% LTV jumbo mortgage are lower than the 90% LTV loan program.

NON-QM Jumbo Mortgages For Self Employed Borrowers

NON-QM Jumbo Mortgages For Self Employed Borrowers

NON-QM Jumbo Mortgages For Self Employed Borrowers are non-conforming loans with very lax credit and DTI mortgage guidelines. There is no waiting period after housing events to qualify for non-QM jumbo mortgages. 10% to 20% down payment is required. The amount of down payment depends on the borrowers’ credit scores. Mortgage Rates depend on the down payment and credit scores of borrowers. There is no private mortgage insurance required on non-QM jumbo mortgages. There are two types of non-QM jumbo mortgages. One is the standard two years W2s and tax returns required. The other type of non-QM jumbo loan is for self-employed borrowers. 12 or 24 months of bank deposits are used to calculate income. Income tax returns are not required.

Jumbo Mortgage With 10% Down Payment Bank Statement Loans

The second type of non-QM jumbo mortgages is those geared towards self-employed borrowers where no income tax returns are required. They are either 12 months or 24 months bank statement jumbo mortgage loans for self-employed borrowers. The average deposits on bank statements over the past 12 months are used to calculate monthly income. Personal or business bank statements can be used. If personal bank statement deposits are used, then 100% of the deposits are averaged over the past 12 months. If business bank statement deposits are used, then 50% of deposits are averaged over the past 12 months. Bank statements used need to be from one bank and no overdrafts are allowed. If it is a joint bank statement with husband and wife, then both husband and wife need to go on loan.

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