For popular government-backed loans such as FHA loans, USDA loans, and VA loans, there is a maximum loan amount available for each program. If a home owner is interested in a home that with a purchase price that exceeds these maximum limits, they will need to look to alternative options such as the Jumbo loan. A jumbo loan is a conventional loan option with a loan amount that exceeds the limits imposed by Fannie Mae and Freddie Mac. At America Mortgage, LLC, we offer great rates and terms on Monroe jumbo loans.
Mortgage loans that meet specific criteria set in place by Freddie Mae or Fannie Mac are called conforming loans. Currently the maximum conforming loan limit is $424,100 although this can reach $636,150 in higher-cost areas. Since Jumbo loans exceed loan limit criteria, they are classified as non-conforming. Non-conforming loans are not eligible for purchase by Fannie Mae and Freddie Mac which can make them a bit riskier for lenders. Lending criteria and credit requirements can be more stringent with a jumbo loan. It is important to note that lenders can always set their own criteria when it comes to jumbo loans. They do not need to adhere to the same Fannie Mae and Freddie Mac guidelines that conforming loans do.
Monroe Jumbo Loan Requirements
Credit Score – A credit score requirement around 700 is commonly required for jumbo loans. Remember that lenders can set their own credit score requirements so there may be flexibility in this area depending on other factors such as income and down payment availability.
Down payment – Traditionally, a 20% down payment is needed for a jumbo loan. Smaller down payment requirements are becoming more common for borrowers with higher than average credit and income. Private mortgage insurance (PMI) may be required if a lower down payment is desired.
Debt-to-Income Ratio and Income – A debt-to-income ratio of 43 percent or less is standard. Documentation such as W2 forms and recent paystubs are required to verify income.
Property – The property being purchased will need to support the purchase price and the mortgage being applied for. An appraisal will be done to very this.
Applicants will also want to prepare documentation which outlines liquid assets, non-liquid assets, and any other loans that they may hold. This type of information allows a lender to verify that you can repay the loan being applied for. Preparing this information ahead of time can make the application process go smoothly as missing information can cause delays.
For borrowers interested in purchasing a luxury home, investment property, or even a second home in Monroe, a Jumbo loan could be the perfect loan option. At America Mortgage, LLC, we offer low rates and flexible terms on jumbo loans throughout Washington. Contact us today for more information on Monroe jumbo loans or to begin the pre-qualification process.