Professional Mortgage Solutions in Rego Park, NY supports many clients in buying their dream home. If you seek to take out a larger mortgage through a jumbo loan, then contact our offices for more information. If you want to buy a larger home, then the rising cost of homes may mean you will need to seek a loan that exceeds conforming standards. Read on below for more information.
Essentials of a Jumbo Loan
A Jumbo Loan is a type of non-conforming loan. This means it exceeds the conforming loan standards set by Fannie Mae and Freddie Mac. These two Government-Sponsored Entities (GSEs) buy home loans and sell them on the secondary market. Therefore, they may not want to sell higher risk, larger loan. The GSEs set conforming loan limits based on the median home price. Exceptions to the limits might be allowed for highly expensive areas. However, the GSEs will not back any Jumbo Loans.
You can use a jumbo loan on a majority of residential, vacation, and investment properties. While rates may go up with a higher loan amount, there is demand for this type of loan in areas with higher priced homes. On occasion, a lower rate can be negotiated.
Qualifying for a Jumbo Loan
In order to qualify for a jumbo loan, you may expect to pay a down payment of at least 10-20%. The lender will also want to see that you have a low debt-to-income ratio. You may also be asked for lots of detail about cash reserves in order to best calculate your ability to repay. A high credit score and income are usually needed. The bank will weigh all of these factors together in the approval process, and you may not need to be perfect in every area. You can strengthen your financials and apply again if you are denied. This way, you may not need to save up more money for a down payment in order to qualify for a conforming loan amount.
Typical Jumbo Loan Amounts
Each county has a set conforming loan limit. Rising home prices have prompted the Federal Housing Finance Agency to set higher loan limits for pricey areas. Nationally, the rate is set at $484,350 for a one living-unit home. In higher cost areas, the limit can go up to $726,525. For example, in Queens and Rego Park, limits for an FHA conforming loan are higher. For one living-unit homes, the FHA limit is $725,525 and $1,397,400 for four living-unit homes.
Your home goals might be closer than you think with a jumbo loan. If you want to learn more, or have questions, contact Professional Mortgage Solutions in Rego Park, NY. We are happy to help you meet your needs!
