The Florida city of Sarasota has a median home value at roughly $276,400 and a median household income of $45,641 homes are reasonably priced in this coastal city. Nevertheless, regardless of the median home value, the luxury home market is still thriving. There are just over 1,000 homes listed for sale by Realtors and New Home Builders that may need jumbo financing in communities across Sarasota. The current conforming loan limit for Sarasota is $424,100. So, any loan above that is considered a jumbo loan and jumbo mortgage loans have qualifying guidelines that are not the same as conforming loans.
Among the differences for jumbo loans is a bigger down payment. Today's conforming loans demand at least a 3% down payment. You'd likely need a 700 credit score and qualifying income and employment. On the other hand, a large majority of jumbo mortgage programs require a down payment of at least 10, or 20% when it's a super jumbo loan over $2 million. There is 95% financing if you have a 740 credit score, a 2 year employment history, 1 years' worth of mortgage payment saved, and qualifying income.
Let's consider a home listed in the "West of the Trail" neighborhood for $950,000. By qualifying for loan with a 10% down payment, which translates to a minimum down payment of $95,000. If your credit score is less than 660, a 20% down payment is likely, so that means $190,000. Many local banks have conservative underwriting so don’t think you'll get that 5% down deal with them. Your best bet is with a mortgage broker with experience in closing that program.
In fact, some jumbo loan programs allow qualified buyers to finance up to 95% loan to the purchase price of $1.5 million with only 5.0% down. Back to the $950k home, 5% down is just $47,500. Count on having 12 - 18 months of the full mortgage payment (PITI) in the bank, a debt to income ratio under 43, and a 740 or higher credit score.
Who is a 95% Jumbo Loan For?
Some borrowers would like to preserve their liquid assets for their own reasons by keeping cash in their bank account or investment brokerage accounts and bring in the lowest down payment as possible while still obtaining competitive financing.
This type of home financing is available as a single loan with mortgage insurance included and as two loans to finance a one transaction.
So, the borrower getting one loan will have a 90/10 or 95/5 loan.
The two loan scenario is structured with a jumbo loan and piggyback second loan. The piggyback may be a Home Equity Line of credit or a fixed-rate second loan.
The borrower would decide on either an 80-15-5 or an 80-10-10 . The "80" represents the first loan which is 80% of the sales price of the home. If under contract to buy that $950,000 home west of Tamiami Trail, that would mean a first lien at $760,000. The" 15" represents the second loan that is 15% of the sales price, or $142,500. And the 5 is your down payment of $47,500.
Interest rates for jumbo loans are higher than conforming loan amounts but still very attractive. Simply discuss your financial situation with a loan officer so you know your financing options when looking to buy in luxury neighborhoods of Sarasota such as Bird Key, Casey Key, Longboat Key, Siesta Key, St, Armands Key, Lakewood Ranch and more areas. In today’s mortgage market, you have more choices than you think by working an experienced mortgage broker.
Home buyers that have questions can learn more about their financing options for either a Jumbo Purchase or Refinance http://www.JMLAdvisor.com . Proud to help clients across the Florida: Tampa, Orlando, Sarasota, Osprey, Manasota Key, Santa Rosa Beach, Naples, West Palm Beach,