Home Loans for Luxury Properties and Homes in Highly Competitive Areas
If you’re searching for a loan to finance a luxury property or a home in a highly competitive area, a jumbo loan might be a good option for you. Unlike conforming loans that must adhere to the limits and requirements set by the Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac, jumbo loans can exceed local conforming loan limits. Additionally, these large-scale home loans can give borrowers assistance with above-average down payment costs.
At Landmark National Bank, we offer jumbo loans to help borrowers finance their dream home, whether it be a mansion or a home in a popular neighborhood.
What is a jumbo loan?
As the name suggests, jumbo loans are home loans that cover above-average amounts for large homes. These home loans can be used for a primary residence, investment property, or a vacation home. In addition, there are VA jumbo loans available for veterans, active-duty military personnel, and military spouses. VA jumbo loans require the same stipulations as standard VA loans.
How to Qualify for a Jumbo Loan
Qualifying for a jumbo loan depends on many factors, including:
- Cash reserves
- Credit score
- Debt-to-income (DTI) ratio
- Employment status
- Property type and use
Jumbo loans tend to be more difficult to qualify for than conventional loans, especially because they are not insured by the federal government. Additionally, jumbo loans are manually underwritten, which means all factors and qualifications are considered carefully.
What are jumbo loan limits?
The FHFA’s 2021 maximum conforming loan limit (CLL) for mortgages acquired by Fannie Mae and Freddie Mac is $548,250, which means any home above this amount would require a jumbo loan. If you plan to buy a home in an area where the local median home value exceeds this amount by 115%, the maximum loan limit will be higher. However, there is a “ceiling” if a home’s value exceeds the maximum CLL by 150%, which is $822,375.
Jumbo Loan Rates at Landmark National Bank
For current jumbo loan rates, call the mortgage specialists at Landmark National Bank today.
Credit Requirements for a Jumbo Loan
When it comes to getting a jumbo loan, your credit score plays a major factor. Unlike FHA or VA loans that allow for lower credit scores, many jumbo loans require a FICO credit score of 700 to 740 , and sometimes even higher. In general, your credit score requirement for a jumbo loan will reflect your loan amount, your debt-to-income (DTI) ratio (typically ranging from 43% to 45% and lower ), and your down payment percentage.
How much down payment is required for a jumbo loan?
Jumbo loans typically have much higher down payment requirements than conventional loans. For primary, single-family jumbo loans, depending on the size of the mortgage loan, downpayments can range from 5% to 30% of the sales price. For secondary homes, vacation homes, or multi-family units, the down payment could be even higher. It is possible to acquire a VA jumbo loan without a down payment, but only with a median credit score of 740 or higher.
Contact Landmark National Bank for Jumbo Loans
If you’re in the market for a luxury home or a home in a highly competitive area, call Landmark National Bank to learn more about jumbo loans. Our mortgage specialists are here to help you unlock the door to your dream home today.