Just like many other major cities in the U.S., median home sales prices in Charlotte, North Carolina are continuing to rise and are currently around $260,000. Compare that with almost 5 years ago when the median sales price was just over $150,000. In the jumbo market, home values have impressed as well. Jumbo loans are those that are greater than the current conforming loan limit of $424,100. Buyers who are financing higher end homes are seeing some very attractive interest rates, close to those reserved for conforming loan amounts. Historically, interest rates for jumbo loans have been anywhere from .5% to 1.5% higher yet recently that gap has narrowed and jumbo interest rates are very near their conforming rate cousins.
As interest rates have fallen somewhat over the years the minimum Jumbo down payment requirements haven’t changed very much. Most jumbo loan programs ask for a down payment of at least 10% down and some banks /lenders still require a 20% down payment. When buying and financing a home that is listed at $650,000, a 20% down payment is $130,000. Many buyers in the Charlotte area who are in the jumbo market don’t always want to tie up that much of their own funds in a real estate transaction. Real estate is not the most liquid of transactions and while a down payment represents the initial equity in a real estate purchase, the equity is in the property and not in the buyer’s bank account.
North Carolina homebuyers may also want to leverage these low rates in today’s market as much as possible and seek a jumbo loan that doesn’t require as much cash to close. Enter the 5% down payment jumbo mortgage. This 95% program is actually a combination of two loans, a first mortgage representing 80% of the sales price and a second lien of 15%. The buyers in this example need only make up the remaining 5%. For a $650,000 home, the buyers would put down $32,500. This structure is often referred to by lenders as an “80-15-5” combo loan.
The minimum credit score is as low as 700 and is available to finance loan amounts up to $1.5 million with no monthly mortgage insurance costs. Buyers also have a choice of a single 95% loan option which will require less closing costs. However, the rates could be higher depending on the total adjust loan amount the buyer seeks. All the pros and cons of each option will be discussed during the initial phone interview with the borrower. Note: the 95% Jumbo loan is a fully documented loan which requires income and asset documentation among other guidelines listed below. These requirements apply to both purchase and Jumbo rate-term refinance loans.
- The home must be a primary residence. Vacations homes permitted with higher 10% down payment.
- Credit must be above 700 for all borrowers listed on the loan application
- Only single family home, town homes, condos permitted. No vacant lot loans, or building on your own land.
- Reserves will be required (amount of cash after down payment and closing costs) The exact amount of reserves will depend on the overall loan amount. Typical range is 3-6 months reserves
- Buyers can find all the latest Jumbo Purchase FAQ's here
Home buyers that require even larger loan amounts can finance up to 90% loan to value with a 2.5mil loan amount cap. All the 90% and 95% jumbo options are available to approved buyers nationwide including: Cabarrus, Iredell, Gaston, Mecklenburg , Lincoln, Lancaster, Union, York County
Please learn more by visiting http://JumboMortgageSource.com or call ph: 800-962-0677.