Jumbo Loans

Jumbo Loans for the Purchase of High-Value Homes

Jumbo loans can be used for high-value houses including luxury homes, “high-end” construction homes, second homes, and more. When you are looking to purchase a high-value home, you will want to consult with a top professional to obtain the best rates and terms. There are two types of conventional loans: conforming and nonconforming. Loans that are within the limits set by government-sponsored entities (GSE) Fannie Mae and Freddie Mac are considered conforming. Those that exceed these limits are non-conforming. Jumbo loans are non-conforming conventional loans, since they are privately funded and exceed the GSE limits. The conforming loan limit for most areas is $453,100, although in certain high-cost areas, loans can reach as high as $679,650 and still qualify. If you want to get jumbo loan advice and rates from an experienced professional, call Nancy Meek at VIP Mortgage Inc. in Scottsdale, AZ.

Approval for a Jumbo Loan

Since jumbo loans are not secured by a government agency, such as the U.S. Department of Veterans Affairs (VA) or Federal Housing Administration (FHA), they are subject to approval by a private lender. Since these loans are not backed by government entities, private lenders may have more stringent approval requirements. Private lenders will usually check to see if you have a low debt-to-income ratio, good credit, and clear proof of steady income. It is not uncommon for lenders to require a credit score of around 700 and a debt-to-income ratio of 43% or better. Many will prefer that you have at least 20% for your down payment to approve this larger loan. On the other hand, since they do not need to meet GSE requirements, they can be flexible with each individual borrower depending on their unique financial circumstances.

When applying for a jumbo loan, you should be prepared to provide documentation that outlines liquid assets, non-liquid assets, and any additional loans you may have. This information will be used to further support your ability to repay the loan amount you are requesting.

Rates have historically been higher on jumbo loans and have often only been available to borrowers that can afford larger monthly mortgage payments. Recent changes have made some lenders carry rates that are more comparable to conforming loans, helping buyers save money on their jumbo loan payments. Down payments of less than 20% may also be approved in some cases.

Purchase your Dream Home

When buying your dream home, you will want to work with a lender that listens carefully to your needs and ensures a smooth process. Visit Nancy Meek at VIP Mortgage Inc. to purchase your Scottsdale, AZ dream house. Nancy and VIP Mortgage Inc. will help ensure your security throughout the course of your purchase. Contact us today to find the best option for your jumbo loan.