Jumbo Mortgage

By
Mortgage and Lending with JB Mortgage Capital, Inc. NMLS# 247447

You may have come across your dream home and due to the high purchase price you no longer are eligible for a conforming loan so now you must look at a "Jumbo Loan" 

About Jumbo Home Loan:

A Jumbo Home Loan offers you the opportunity to buy a high priced home with great financing flexibility. Current conventional conforming loan limits are $510,400 for most counties in California. In high cost areas like Los Angeles county the limit is $765,600. 2021 conforming loan limits in Califonia are expected to be able these levels.

So any loan amount above these levels is considered a Jumbo Home Loan.

Basic Facts About Jumbo Home Loans:

If you have plans to apply for a Jumbo Home Loan then be prepared for slightly higher rates then conforming loan limits. Also the amount of documentation needed to obtain a Jumbo Home Loan is sometimes greater than if you were obtaining a conforming loan. In recent years, down payment requirements have loosened to current 10% to 20% of total purchase price from high of about 30%. But the standard is 20%.

In case of Jumbo loan programs, DTI (Debt-To-Income) ratio requirements typically are much lower than conforming home loans. When compared to typical loan, monthly payments are likely to be bigger due to larger Jumbo Home Loans.

Jumbo Home Refinancing:

Fast forward and mortgage rates have declined...time to refinance!

With Jumbo Home Loan refinancing, you will be in a better position to reduce your monthly payment and interest rate and also be on track with the set financial goals. Moreover, with a Jumbo Home Loan refinance the loan terms can be changed and mortgage paid off much sooner. It also allows developing faster equity. Cash-out refinance to about $200,000 (or more, depending on the market) is another refinancing option available to clear remodeling expenses, or high interest debt. Several options can be obtain so be sure to ask your Loan Officer.

Some Questions To Ask:

Prior to seeking Jumbo Home Loan, it is essential to ask few key questions with the lender you are working with:

  • What is the maximum loan amount that is available to be borrowed?
  • To qualify, what credit requirements need to be fulfilled?
  • Can one purchase a rental unit or a second home? 
  • Is there an interest only options?
  • Can I have a co-borrower or a non-occupying co-borrower?
  • Is it possible to pay off high interest rate debts prior to closing?

Asking these and other questions is essential to getting the best possible Jumbo Home Loan. Most homeowners chose a 30 year fixed Jumbo Home Loan program but some opt for the 15 year fixed term which allows the homeowner to pay less interest and payoff the home much faster. When choosing to between the two it's important to make sure you can afford the monthly payment. 

Comments (1)

Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

I have not done a jumbo for years . My move up Buyers usually have enough equity to avoid a Jumbo .

Nov 23, 2020 06:00 AM