Loan Programs

Jumbo Loans

LOAN PROGRAMS – JUMBO LOANS

Jumbo loans are homeownership loans that are not traditional. In its non-traditional nature, a Jumbo loan pushes past the loan ceiling set by the Federal government on home loans, which can be issued to borrowers. So, if you are scouring through properties on the market, and the price is way off the loan mark for a standard home loan, a Jumbo loan is a way to go.

The FHFA, Federal Housing Finance Agency, has $510,400 set as the maximum loan amount on standard home loans, so where do you turn to if the house you have eyes on is worth $750,000? A Jumbo loan.

How Can You Get a Jumbo Loan?

Is your Form W-2 and your Form 1099 up to date?
Your W-2 and 1099 forms have to be up to date, including your tax returns too.

How does your statement of finance look?
If it looks good and shows you can finance a jumbo loan, then you are clear on this.

What is your FICO score?
700 and above (roughly 720 on a higher scale) is recommended and best preferred as your Credit Score rating. Your FICO score needs to be high here to determine if you are credit-worthy or otherwise.

What is your Debt-to-Income ratio?
If it is less than 50% on a debt-to-income (DTI) ratio and sits on the 45%-47% range, you are good to go on this criterion.

How deep is your cash reserve?
The deeper, the better; one year financial coverage on your mortgage is usually the minimum. Depth really matters here because for a home loan where the loan financing company is not shielded from losses if the borrower refuses/fails to pay back, the amount of money you have in the bank has to do some talking.

Types of Jumbo Loans

There are two types of jumbo loans and we will have a look at them.

1. 1. Fixed-rate jumbo loan: This is a jumbo loan with an interest rate that does not change over the term of the loan.
   2. Variable-rate jumbo loan: This is a jumbo loan with an interest rate that varies on an annual to an annual basis. Typically, you get an introductory interest rate, and then when the term is due, your rate begins varying. This is also known as an ARM.

A jumbo loan is different in many aspects to the standard home loans regulated by the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association under the aegis of the Federal government; these two bodies which regulate standard home loans are respectively known as Freddie and Fannie. Other differences are the higher interest rates charged on jumbo loans and subsequent higher closing costs as well as an expected increase in a down payment required on jumbo loans versus standard home loans.

At Supreme Lending Dallas, we have attractive rates on our jumbo loan and we would like to have a chat with you because really, not even money should limit the type of home you own even if it costs more than $1,400 + half a million dollars.

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