Buying a home is an expensive affair in the US. Not everyone can make the upfront payment towards its price. That is when jumbo loans are of great help. This type of loan exceeds the limits as laid by the government-backed enterprises that purchase most home loans for investors.
Sammamish Mortgage is the leading Jumbo Home Loan provider company in Bellevue, WA. The company has more than twenty-five years of experience in offering the best mortgage solutions to meet the varying financial needs of its clients.
A Jumbo house loan is a non-conforming loan. Before you plan to take this loan, it is important that you gain complete knowledge about it. In this article, we will tell you all about this loan, and when should you think of buying it.
About Jumbo Home Loans
A Jumbo loan is one of the ways to finance your dream house. The conforming limit of this loan is more in counties that have high home prices. This requires a person to check the loan limits of their area before buying it.
The maximum amount of loan that can be sanctioned depends on the lender. Borrowers can obtain this loan at either adjustable-rate or fixed rate with varying term options. This type of mortgage loan is ideal for primary homes, vacation homes, as well as investment properties.
Qualifying condition to take a Jumbo loan
There are certain considerations that you need to attend to before you take up this loan. As these loans are not supported by Freddie or Fannie, they are categorized as riskier loans. Borrowers need to meet the three conditions to get their jumbo loan approved.
These are larger income, greater reserve, and high credit score. It is needed that the FICO scores should be high to get this loan. Borrowers whose scores go less than the adequate requirements have to offset it via a low debt to income ratio.
Borrowers need to show that they have sufficient assets, or reserves, to cover between 6 and 12 months of mortgage payments. Generally, the down payment on this type of loan is between 10 % and 20 %.
Advantages of a jumbo mortgage loan
The major advantage of a jumbo benefit loan for borrowers is that this type of mortgage loan enables them to go outside of limitations set by Fannie and Freddie authorities.
However, with this loan, buyers can benefit by getting a competitive rate of interest, and finance their dream home without being confined by the dollar restriction on conforming mortgages.
Buyers who are planning to take this loan, need to be aware of the possibility that the mortgage rate on jumbo house loan can fluctuate. It can either raise or reduce the mortgage rate of a conforming loan.
Jumbo loans serve as an easy means to finance your property. In place of obtaining two conforming loans for financing your home, taking a jumbo loan eliminates the need for a second loan. The jumbo mortgage serves as a useful mortgage tool for those borrowers who like to finance more of the cost of the home than tying up cash.