WHAT IS A JUMBO LOAN?

A Jumbo Loan is any home loan higher than the maximum loan limit set by Fannie Mae and Freddy Mac. Jumbo Loans feature similar loan programs to conventional fixed-rate and have a wide array of adjustable-rate programs. Since Jumbo Loans are riskier for lenders and are not government-backed, they usually have slightly higher rates and stricter guidelines than the Conforming and High Balance Loans. These loans typically require high credit scores, a larger down payment, and more cash reserves.

BENEFITS OF A JUMBO LOAN

Much higher loan amounts up to 5 million dollars and a wide array of adjustable loan options, including interest only, 40-year terms and conversion options.

WHO IS ELIGIBLE FOR A JUMBO LOAN?

Jumbo Loans require a minimum credit score of between 680-720. The minimum required down is usually 10-20% (up to $1,500,000 loan amounts) and 25-35% (up to $3,000,000 loan amount). The max debt to income ratio is between 38-43.5 of gross income depending on the amount financed. Jumbo loans will also require payment reserves anywhere from 6-24 monthly payments in reserves (PITI).

DO JUMBO LOANS REQUIRE PMI?

Yes, sometimes, depending on the loan amount, a buyer is able to secure a Jumbo Loan with less than 20% down but the loan would be even more carefully underwritten to ensure payment. 

WHAT TYPE OF PROPERTIES ARE ELIGIBLE?

Most Jumbo loan programs allow you to purchase single-family homes, warrantable condos, planned unit developments, and 1-4 family residences. A conventional loan can be used to finance a primary residence, second home and investment property.

For more information, call Ron.