Jumbo loans can be an excellent choice for those who qualify, but many people either do not know this type of financing is an option or they believe some common misconceptions. To help give us a clear picture of what exactly a jumbo loan is, we asked our Fort Myers, Florida Branch Manager, Jim Marcinkowski, some common questions.
1.) What makes a Jumbo loan different from other loans?
Jumbo loans are for mortgage amounts over $417,000.This fact is surprising to many since a jumbo loan is commonly mistaken for a loan that is equal to or exceeds a million. The truth is, a loan that is under Fannie Mae or Freddie Mac and is over $417,000 is automatically considered a jumbo loan.
2.) What would make someone an ideal candidate for this loan? In other words, what are the requirements to qualify?
a. The minimum credit score is 680, but the higher the better. It is always beneficial to have a higher credit score when dealing with home loans.
b. A jumbo loan has a maximum of $3,000,000. This does not mean the value of the home. The value of the home you are buying can exceed $3 million to receive a jumbo loan, but the difference between the loan maximum and the value must be paid in cash.
c. You must have an 85% loan-to-value (LTV) ratio (or the relationship between the amount of the mortgage and property value, shown as a percentage) for a primary residence, 80% LTV for a second home.
d. Interest rates may be a little higher than conforming rates
e. Cash reserves are required. You must have 6 months of reserves for an LTV under 80% on loan amounts of $1 million and under, and18 months of reserves are required for LTVs over 80%. Depending on the LTV, reserves could go as high as 24 months.
3.) What are the downfalls of this type of loan?
Debt-to-income ratios can be lower than conventional, meaning the requirements on this loan are stricter when it comes to the amount of debt a person or couple can have. Those who can meet the guidelines may feel the process can be more tedious than receiving, say, a conventional loan. It makes sense that the process for this loan would involve more than most considering the loan amounts are typically higher and the lender needs enough information to prove that the borrower can successfully pay a jumbo mortgage.
4.) What are the benefits of this type of loan?
The interest rates for jumbo loans are at near historical lows. Interest rates are constantly fluctuating. The same is true for jumbo loans, but they still tend to linger on the lower end. Refinancing with a jumbo loan can mean better savings than a traditional loan. A jumbo loan allows refinancing at loan amounts between $417,000 and $650,000. Better savings on a refinance can go towards investments, college tuition, or anything else that may need to be paid off. Jumbo loans can also come with better offers from lenders, which may include reduced fees during the process.
5.) What are the different loan options within this program?
Like most other mortgages, jumbo loans come in loan terms of 10, 15, 20, 25 and 30-year fixed or adjustable rates.
While jumbo loans may not be the best fit for everyone, they offer many great benefits for those who qualify. If you would like to learn more about our jumbo loan program, click here. Ready to get started? Locate one of our experienced loan officers and get pre-qualified for a loan today!
ABOUT INLANTA MORTGAGE
Headquartered in Pewaukee, Wis., Inlanta Mortgage was established in 1993. The company has grown to 35 branches in 16 states and over 240 employees. Inlanta Mortgage offers Fannie Mae/Freddie Mac agency products, as well as jumbo and portfolio programs. The company is an agency approved lender for Freddie Mac, Fannie Mae, FHA/VA, FHA 203K and USDA. Inlanta Mortgage also offers numerous state bond agency programs.
In 2016, Inlanta Mortgage was recently named a Top Workplace for a third consecutive year. Inlanta has been recognized as a Top Mortgage Employer by National Mortgage Professional and a Top 100 Mortgage Banking Company and 100 Best Mortgage Companies to Work For by Mortgage Executive Magazine. Inlanta has also received the Platinum Million Dollar USDA Lender Award.
Inlanta Mortgage continues to expand its branch network and encourages ethical lending professionals to learn more about our support platform and discover how an Inlanta branch partnership with Inlanta Mortgage is essential to long-term success.
Locate an Inlanta Mortgage loan officer at www.inlanta.com/locations. For current employment opportunities, visit www.inlanta.com/join-our-team/employment-opportunities. Learn more about Inlanta Mortgage branch partnership opportunities at www.inlantapartners.com, call 262-439-4260, or email firstname.lastname@example.org.
Inlanta Mortgage, Inc. NMLS #1016.