JUMBO MORTGAGE LOAN
A jumbo loan is a mortgage for an amount that exceeds the limits set by Fannie Mae and Freddie Mac, the government-sponsored giants that buy most U.S. home loans and package them for investors.If you’re buying a mansion — or just a regular home in a high-priced area like Silicon Valley — you might need a jumbo loan.
MINIMUM CREDIT SCORE
700
KEY ADVANTAGES
CONVENTIONAL PORTFOLIO LOANS WITH FIXED AND ADJUSTABLE TERMS THAT EXCEED NORMAL CONFORMING LOAN LIMITS
What are the benefits of jumbo loan?
The main benefit for borrowers is that a jumbo mortgage lets you borrow more than the limits imposed by Fannie and Freddie. For instance, if you’d like to borrow $1 million against a $1.5 million home, a jumbo loan makes it possible.
Some borrowers prefer to finance more of the home’s cost rather than tying up cash, making the jumbo mortgage a helpful financial tool and part of an overall investment strategy. You can still get a competitive interest rate and finance the home of your choice without being restricted by the dollar limit on conforming mortgages.
What are the jumbo loan requirements ?
Just like a conforming loan, jumbo loans have a similar application and evaluation process. Mortgage lenders will look at your credit score, down payment amount, current debt, debt-to-income ratio, employment history, money left over from closing, and more.
Jumbo loans require borrowers to have an above-average credit score. This credit score gives borrowers access to the best loan options available. Remember, with a higher credit score you will get offered better rates and terms.
Money left over from closing, also known as reserves or post-closing liquidity, is closely looked at by your mortgage lender. If borrowers are applying for a jumbo loan, lenders like to see 12 months of reserves after the closing, half liquid (in a checking or savings account), and half calculated from retirement assets. Lenders can make exceptions if you have a low debt-to-income-ratio and a high down payment.
