A jumbo loan is a type of loan used to purchase a home when the limits of government-backed loans aren’t enough to cover the cost. There is a limit on mortgages which is set by Fannie Mae and Freddie Mac, when those limits are exceeded, you will find yourself in need of a jumbo loan. These are called non-conforming loans and the maximum varies by lender, so it is important to weigh out your options and talk to different lenders.
How Do I Qualify?
Your finances will be reviewed fairly closely as these loans have a strict underwriting process, so it is not advised to apply for this type of loan unless you are in a stable financial position.
The reason these loans have more guidelines is that they involve more risk than a government-backed loan. Although they do have more to gain since the loan itself is higher and can be more profitable to the lender.
In order to qualify for a jumbo loan, you will need to have a large income, high credit score, and a generous down payment and savings. You’ll need to be able to prove you have enough money to pay off the monthly payments for the first 6-12 months when applying for a jumbo loan as well. If you do not meet those requirements, you can always discuss your options and the specific situation with a lender directly as having a low debt to income ratio can outweigh or lower credit score.
Is It Right For Me?
The best way to find out if a jumbo loan is the right choice for you is to discuss your options with a lender, or possibly more than one. If you are in a situation that a loan backed by Fannie and Freddie are outside of the terms that you need for your purchase, this may be the best option for you. Jumbo loans are also good if you are seeking to purchase a piece of land as land and build on it later. That way you don’t have to take out more than one loan for the same project.
Reach Out Today!
If you think a super jumbo loan is a good idea for your purchase, make sure to review your finances and weigh out all your options. We want to make sure you are making the best decision for your next purchase, so please JZ Mortgage Services in Bradenton, FL today!