With so much change in the mortgage and real estate markets as a result of the Covid-19 pandemic, homebuyers looking to purchase a high cost property have found jumbo home loans harder to get as many lenders have tightened eligibility requirements for these types of loans.
What Is A Jumbo Home Loan?
A non-conforming or jumbo loan is a home loan that is above the conforming loan limit set by the Federal Housing Finance Authority. Currently, the conforming loan limit is $510,400 for a single-family home, but it can go up to $765,600, depending on the county where the property is located.
Click here to see the conforming loan limit map to see the loan limits for your county >
Why Are Jumbo Home Loans Currently Difficult To Get Financed?
Jumbo home loans are considered high-risk loans by many lenders, unlike conforming home loans, FHA home loans, and VA home loans, because they can’t be sold to government agencies like Fannie Mae and Freddie Mac. Instead, they are serviced by the mortgage lender who closed the loan or sold off to private investors. Investor interest in buying these mortgages has waned considerably since the economic slump caused by the Covid-19 pandemic, so many mortgage lenders have stopped offering them or tightened eligibility requirements, such as increasing the applicant’s minimum credit score and deposit amount.
The Good News
Jumbo mortgages are still available through Stearns Home Loans. We can finance up to $1.5 million and 80% of property value.
Borrowers should have a good credit score and a low credit to debt ratio. Credit scores are important in determining the interest rate that homebuyers or refinancing homeowners receive for a mortgage. The interest rate then impacts the amount of your monthly mortgage payment for the term of your home loan. You can receive a free credit report from each of the credit agencies from FreeCreditReport.com so you can see your credit score and check that there are no errors on your credit report before you meet with a mortgage lender.
Jumbo borrowers should expect their mortgage lender to do a final check on their pre-approval documentation to ensure nothing has changed in their financial situation, as well as last-minute employment verification, before heading to the closing table.
How To Apply For A Jumbo Home Loan
If you live in a city where houses typically cost above conforming home loans limits, or you want to purchase an expensive home, you should start the process by speaking to a Stearns mortgage loan originator in your region. They will view your eligibility for the amount you want to borrow so that you’ll feel confident before you start house hunting.
No matter whether you are looking for a larger home, a large property, home with a view, high-end features, or a higher loan to compete in your expensive housing market, we can help you
. We can also qualify first-time homebuyers or those looking to refinance their current home loan, so contact us today!
Aug 04, 2020