Jumbo Mortgage With 10% Down Payment And No PMI

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 the 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, Guam, Hawaii, and the U.S. Virgin Islands.

Many counties in higher-priced counties have higher loan limits due to being priced in high-cost counties. For example, many counties in California are designated high-cost areas due to home prices that are substantially higher than the median-priced home prices in the nation. In the following paragraphs, we will cover qualifying for jumbo mortgage with 10% down payment with no PMI.

What Is Considered To Be a Jumbo Loan?

A frequently asked question from homebuyers of high-end homes is what is considered to be a jumbo loan. A home loan that exceeds the maximum Fannie Mae and/or Freddie Mac conforming loan limit is considered to be a jumbo loan.  Any home loan that exceeds the maximum conforming loan limit is called non-conforming loans or jumbo loans.

The above are government high-balance jumbo loans with a maximum loan limit of $970,200. Traditional jumbo loans are any home loan exceeding the traditional conforming loan limit of Fannie Mae and Freddie Mac. Non-QM jumbo loans are alternative jumbo loan programs such as bank statement loans, non-QM mortgages, and no-doc loans.

What Is Considered A High-Balance Jumbo Loan?

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There is a limit to an FHA and conforming high-balance jumbo loan. Non-QM loans have a loan limit depending on the wholesale jumbo mortgage lender. VA jumbo loans or VA high-balance jumbo loans have no maximum loan limit. Currently, the 2022 conforming loan limit is capped at $647,200 for single-family homes in all states in the United States with the exception of Alaska, Hawaii, Guam, the U.S. Virgin Islands, and designated counties throughout the nation designated high-cost areas.

High-Balance Jumbo Loans In High-Cost Areas

Designated high-cost counties have high-balance jumbo loans which are capped at $970,200. FHA jumbo loans also referred to as high-balance  FHA loans, are capped at $970,200 on single-family homes for 2022. Conforming Jumbo loans, also referred to as high-balance jumbo loans, are also capped at $970,200 for single-family homes in 2022.

Is There A Limit To A Jumbo Loan?

Not all jumbo mortgage lenders have the same loan limit to a jumbo loan. The maximum loan limit on a jumbo loan depends on the individual wholesale mortgage lender. 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 Gustan Cho Associates is originating and funding 10% down payment jumbo loans.

Why Would Someone Get a Jumbo Loan?

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For example, for 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.

High-Balance FHA, VA, Conforming Loans

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What Classifies As A Jumbo Loan?
What Classifies As A Jumbo Loan?

Jumbo lenders are different than conventional conforming lenders. This is because each jumbo lenders have its 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.

Why Do Lenders Consider Jumbo Loans as Riskier Loans

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 on 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 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.

How Can I Qualify For A Jumbo Mortgage With 10% Down Payment And No PMI?

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 ratio 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.

What Is The Difference Between Traditional Versus Non-QM Jumbo Mortgages

Traditional jumbo mortgages require full documentation, high credit scores, low debt to income ratio, great credit history for the past 7 years, and high credit scores. Gustan Cho Associates offers a unique traditional jumbo mortgage with 10% down payment with no PMI. It is a full doc jumbo mortgage with a 10% down payment program that requires a 660 credit score. Other jumbo lenders do not offer this full-doc traditional loan program.

Non-QM Jumbo Mortgages require 550 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.

What Are The Different Types of Jumbo Mortgage Loan Programs

Besides a jumbo mortgage with a 10% down payment, there are other different types of loan programs. Gustan Cho Associates are mortgage brokers licensed n 48 states with over 170 wholesale mortgage lenders. We have dozens of wholesale jumbo mortgage lenders.

Non-QM Jumbo Loans

Some of the most popular types of jumbo mortgage loan programs include bank statement jumbo loans, jumbo loans one day out of bankruptcy and foreclosure, no-doc jumbo loans, stated-income jumbo loans, second home jumbo mortgages, and jumbo mortgages with a 15% down payment.

15% Down Payment Jumbo Loans

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 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 on Jumbo Loans

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.

Non-QM Bank Statement Jumbo Loans With No Income Tax Returns

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.

Related> Jumbo loan definition


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