Large Home Loans

What is a Jumbo Loan in 2019?

A jumbo loan, also known as a non-conforming mortgage, is a loan that does not fit the guidelines of Fannie Mae and Freddie Mac. In 2019, the conforming loan size limit for a single-family home was raised to $484,350 in the U.S., but may be as much as $726,525 in specific high-cost markets. beachfront home

Some examples of cities in high-cost areas are Los Angeles, San Francisco, Orange County, San Diego, Ventura, San Jose, and other neighborhoods with multi-million dollar homes. Loans greater than these limits for a single-family home (or two- to -four unit conforming loans) are called jumbo mortgages. What's conidered a jumbo loan may vary greatly depending on the county where the property is located.

How to Qualify for a Jumbo Loan

Debt-to-income ratios (DTI).
There’s some flexibility with non-conforming loans for qualified borrowers. To obtain the best possible rate, you’ll want your DTI to be 38 or less. Otherwise, very competitive rates are offered for borrowers with a DTI of 43 or less. As amazing as it may sound, even a 50 DTI jumbo loan is available on 90-percent financing.

Credit scores.
Borrowers may be able to qualify with middle FICO scores from 650 and above. To be approved for the best programs with lower down payment, you will need a score of 700 or higher. A 740 middle score is necessary for the 5-percent down jumbo mortgage.

Flexible income documentation.
The income documentation allowed for jumbo borrowers can be very flexible. For example, if you were self-employed in the same industry for the last two years, some jumbo loans only need your most recent filed tax return, just one year. Additionally, a self-employed borrower can use a year of bank statements to verify employment income or asset statements if there’s more than $500,000 in the accounts.

jumbo mortgage beach homeHome on the Strand in Hermosa Beach

Less than 20 percent down without mortgage insurance.
You may qualify for a jumbo loan with a:

5-percent down payment up to $2 million. This means a homebuyer can purchase a $2.1 million home and get 95-percent financing.

10-percent down payment up to $3 million. This works on a home listed for $3.3 million.

In contrast to conforming loans, mortgage insurance (MI) is not necessary. Typically, the MI for a jumbo is included in the rate which tends to be about .375 - .50 percent more and requires debt-to-income ratios below 43[1].

FAST Loan Closings
We have closed loans in less than 15 days (2 weeks), if you have:
  - a loan request under $1 million
  - a minimum 10-percent down payment or 15% equity on a refinance
  - copies of last 2 years of 1040 tax returns (and business returns if required)
  - 2 years of recent employment/self-employment and debt-to-income ratios below 45
  - a 720 middle credit score or higher
  - no 30-day late payments for rent or mortgage in the last 12 months

Buying or refinancing a home worth $4 millon or more?
We have some attractive jumbo loan programs such as:

  • 25% down up to $3M on a $4M home
  • 30% down up to $4M on a $5.7 million dollar home
  • Cash out refinance up to $4 million on a $8M home

 

 

1. Depends on the program and availability. 2 out of 3 loan products offered require a DTI of 38 or less.

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