A jumbo loan by definition is simply a mortgage loan that is greater than the conventional conforming loan limits established by Fannie Mae and Freddie Mac. The conforming loan limit is the maximum value of a single mortgage that either of these two government-sponsored enterprises will purchase from lenders. This loan limit is typically $417,000 for a single family residence, but can reach as high as $625,500 in higher-cost areas. At CA Mortgage Pro, we offer exceptional rates on jumbo loans throughout Lafayette and the San Francisco bay area.
A variety of properties can be financed with a jumbo loan including primary residences, vacation homes, and investment properties. Both fixed-rate and adjustable-rate loans are available as well. Jumbo loans are considered a bit riskier as they are not eligible to be purchased by Freddie Mae or Fannie Mac. This means that lending criteria and requirements can be more stringent, and rates can be slightly higher for a Jumbo loan. Loan amounts greater than $1 million are often classified as super jumbo loans, which require exceptional credit history, and the most thorough underwriting. CA Mortgage Pro offers super jumbo loans up to $4 million for a variety of property types.
Below are some of the common requirements that need to be met in order to qualify for a jumbo loan. Keep in mind that lenders can always set their own jumbo or super jumbo loan criteria.
Credit Score – A credit score of at least 700 is generally required for a jumbo loan. In some instances, the requirements may be even higher depending on the borrower’s individual circumstances or specific criteria set by the lender.
Income and Debt-to-Income Ratio – You will have to prove that you have the income and reserves necessary to cover the payments when applying for a jumbo mortgage. Documentation such as W2 forms and recent paystubs will be needed to verify income. Debt-to-income ratio must be 43 percent or less if applying for a qualified loan. You may also apply for a non-qualified jumbo loan, but the ability to repay the loan will still need to be proven.
Down payment – Historically, lenders have required a down payment of at least 20 percent for a jumbo loan due to the lack of private mortgage insurance (PMI). In some instances, lenders offer approvals with down payments as low as 10 percent. Your income and assets will need to support the lowered down payment requirement.
Property Appraisal – The property you are looking to purchase will need to support both the purchase price and the mortgage being applied for.
Appropriate documentation is essential when proving you have the ability to repay the loan you are applying for. Be prepared to provide documentation that outlines proof of income, liquid assets, non-liquid assets, and other loans that you may hold.
Jumbo loans can be a great option for those individuals looking to buy a higher-priced home, investment property, or even a second home. CA Mortgage Pro works closely with borrowers throughout Lafayette and the San Francisco bay area to offer excellent rates and conditions on jumbo loan mortgages. Our team of experts is here to help you with a jumbo loan solution that meets all of your needs.