What’s a Jumbo Loan and How Do You Qualify?
Are you looking to buy a new home? You may be surprised to learn what type of property you can get for your money, even in higher priced ranges.
Although house prices have been steadily climbing in the Long Beach area, and most of Southern California, they have yet to hit their peak – and that’s good news for you! Today’s mortgage rates are at historic lows and there’s a wide availability of higher priced homes, so if you’re on the hunt for something with a big open floor plan, a large lot, and extra square footage, now is a good time to consider a jumbo loan.
Along with buying big comes a big mortgage, hence the term “jumbo loan.” Along with a jumbo loan comes jumbo commitment for both you and your mortgage advisor. But thankfully, qualifying for a jumbo mortgage is not as difficult as you might think.
What’s a jumbo loan?
There’s two important definitions to familiarize yourself with:
1) A jumbo loan is a home loan that exceeds a given market’s conforming loan limit.
2) A conforming loan limit is the maximum mortgage amount that Freddie Mac or Fannie Mae will buy from a loan originator. In most of the U.S., this amount is $417,000 but can be greater in certain designated high-priced markets.
How can I qualify to get a jumbo loan?
To buy a home with a large price tag and qualify for a jumbo loan, you’ll need to meet specific down payment, credit score and debt-to-income ratio requirements. But the availability of a variety of jumbo products means there’s some flexibility in these terms — even loans that only require a 10 or 15 percent down payment, or that allow a higher DTI ratio with a lower purchase price or higher credit score.
Does all this mortgage lingo sound a little confusing? It doesn’t need to be. The Julie Aragon Lending Team offers several jumbo loan options and we’re happy to walk you through the specifics of each one.
Email us or call us at (310) 488-7083 to discuss your options and help you achieve your financial goals today.