FHA Loans & FHA Mortgages :
I earlier wrote a post about your basic cash-out types of mortgages, both for FHA loans and for Conventional loans :
This post showed that your best out cash-out scenarios would typically be best with FHA loans and that you could even go an additional 5% higher for cash-out. Now I want to move onto a more difficult topic and that would be Jumbo cash-out mortgages.
What is a jumbo mortgage? Any loan amount from $417,001 to $729,750. Now, here is the issue. In regards to FHA loans, depending on the county that you live in, you could go up to a loan amount of $729,750. The stimulus package allows all conventional loans to go up to $729,750, regardless of county. But, it all comes down to your lender or the investor. Many investors won't go above a $650,000 loan amount for cash-outs. Some will allow up to $1,000,000, but pricing will change and so will your loan-to-value, which is called LTV.
Here is a quick helpful chart.
|
FHA Jumbo Cash-Out
|
Conventional Jumbo Cash-Out
|
|
<-- Up to $729,750 with a 85% LTV (loan-to-value)
|
-- Up to $650,000 with a 80% LTV
|
|
<-- Credit scores to 500, even for Jumbo *** 1
|
-- Credit scores from 660 to above
|
|
<-- You need two appraisals (lower of 2)
|
-- You will have an appraisal review done
|
|
<-- Most penalties don’t start until you are below a 600 credit score
|
-- There are higher penalties even down to 660 credit scores
|
*** 1 There are many lenders that can't even do FHA loans below a 580 credit score, let alone, even a cash-out for Jumbo loans. This is very important to remember when shopping with other lenders.
Keep in mind, there are many variations when dealing with a Jumbo cash-out through conventional methods. But when it comes to a FHA jumbo cash-out, you are maxed at a 85% LTV. For those that don't know what LTV is, (loan-to-value), it's your mortgage amount divided by your value of your home.
Overall, if you are in the process of any type of cash-out refinancing and now your lender has delayed your settlement or has given you excuses more than once that has delayed the settlement, please don't hesitate to call me. As mentioned, I know for a fact that not many lenders can successfully close a FHA jumbo loan, cash-out or regular, with credit scores below 580. I know this because I talk to other loan officers in most states. And one last thing. Keep in mind, these are general and basic guidelines. When it comes to conventional loans, you need to have an approval in the system. At Infinity Mortgage, I can even do a manual underwrite with a 500 credit score for both a FHA loan and even a FHA jumbo loan.
Cash-Out Mortgage Series :
____________________________________________________________________________________
For more information on FHA loans, please go to this link. The FHA Expert
For more information on how you can obtain your dream home, please click here : Mortgage Financing Options
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!
Copyright © 2008 by Jeff Belonger
Posted by 
;)
;)
Excellent information, Jeff. I don't have a great deal of experience with FHA even though I have been in the business for thirty years. I am using FHA instead of subprime to find people who really deserve to own a home, but have not been able to save a lot of money.
The jumbo part is really important because most people think of FHA as small loans for poor people. It can be used for so much more. Again, thanks for the blog.