How To Finance Your Home With A Jumbo Mortgage

Are you using a mortgage to finance a new home? It pays to fully understand your options and to weigh them carefully. A home is a significant investment and requires making wise and informed decisions. A wonderful option to finance your home is by taking out a jumbo mortgage. It’s no wonder that most homeowners today take the same route. You must understand how to finance your home with a jumbo mortgage.

Understanding a jumbo mortgage

This is a home loan bigger than the limit on a conforming loan set by Fannie Mae and Freddie Mac. These loans carry a higher risk to the lender because they aren’t guaranteed by Fannie Mae and Freddie Mac. The lender has no protection in case a customer defaults. A jumbo loan comes with a fixed or adjustable interest rate. And, it comes with various terms. Getting a jumbo loan is a solution when you need more funds higher than federal conforming loan limit.  

More people need a jumbo mortgage than ever before

Home prices have significantly gone up in the last few years. In most areas in the US, you have to borrow at least $417,000 to get a conventional mortgage. In other more expensive regions, you might have to part with about $625,000. However, these numbers can change according to regulations and county. Luckily, jumbo mortgages are a cheaper and better alternative. The jumbo loan allows borrowing a larger amount than a larger sum than a conforming loan.

Getting a jumbo mortgage

A home jumbo mortgage is a home loan that exceeds the government-sponsored enterprise limit. This mortgage comes with a lower loan to value with at least 20 percent equity position on the rate refinance. The mortgage varies from lender to lender and you must have a variety of options tailored to meet your needs. Regardless of whether you need a 40-year loan, ensure to find a company offering a favorable jumbo mortgage limit. Luckily, the interest rates on these mortgages aren’t as high as you expected.

Jumbo mortgages are easier to qualify for

Every lending institution has a set of guidelines and qualifications to qualify for a jumbo mortgage. These might include a down payment or credit score. Additionally, the lender might request to see a few months’ payments in the bank. Other lenders might request for a six months reserve or more for you to qualify for a higher limit loan.

To get approved for a jumbo mortgage, be prepared to keep your support documents handy. These might include:

· Tax documents

· Letters of explanation

· Income documentation

· Documentation of reserves

In detail, you should have 2 years tax returns with schedules, 2 months most recent bank statements, a month’s recent pay slip, schedule of real estate you own, the recent statement of stocks, IRA accounts, and bonds 401K. Ensure to get an expert loan originator with experience in jumbo mortgages to guide you on the necessary documents required when applying for the loan.

Bottom line

For a chance to own the home of your dreams, a jumbo mortgage is a wonderful idea. You can easily a wonderful agency for a loan with favorable rates to meets your finance requirements.

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Created on Dec 12th 2018 01:11. Viewed 357 times.

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