When it comes to purchasing a home, there are so many loan options that it can be a bit overwhelming even to know where to start. With so many options, you may not have heard of each one. Jumbo home loans are one of the lesser known home loan types, and you need to know about them, so First Fidelis is here to help explain what they are and how you can qualify for one.
What is a Jumbo Home Loan?
Jumbo mortgage loans are simply loans that exceed conforming loan limits. Jumbo loans are often used to buy high-priced or luxury homes when someone has a lower debt-to-income ratio and a higher credit score.
In most of the United States, conforming loans are limited to $453,100. Jumbo home loans can surpass these limits set by the Federal Housing Finance Agency, which oversees both Fannie Mae and Freddie Mac, however. If you are looking for a home that is more expensive than $453,100, you will likely need a jumbo mortgage loan.
Benefits of a Jumbo Loan
To purchase a home of higher value than what you can get from a conforming loan, you can rely on a jumbo mortgage loan. With First Fidelis, you can get a jumbo loan for up to $2,000,000, which is significantly higher than the maximum limit of a conforming loan. For many buyers, this type of loan will allow them to make a larger purchase without putting down a significantly higher down payment amount. In comes cases, if your credit score is higher than 660, you can put just 10 percent down.
Sometimes, jumbo loans have better interest rates than conforming loans. If you are purchasing a second home, there are some creative options that are possible with jumbo loans as well.
Downsides of a Jumbo Loan
First off, jumbo home loans aren’t guaranteed by the Federal Housing Administration or the Department of Veteran Affairs. It is also more difficult to qualify for a jumbo loan, because the lender wants to ensure that you will be able to make payments.
How to Qualify for a Jumbo Mortgage Loan
To qualify for a jumbo home loan, you must meet certain requirements. Here’s a quick look at these requirements:
- FICO score of 740+
- Maximum debt-to-income ratio of 45%
- Appraisal supports the purchase price of the home
In many places, there may be additional requirements, such as a specific amount of reserves in your bank account and a higher down payment.
With First Fidelis, applying for a jumbo loan is made easy. When you are applying for a jumbo loan through First Fidelis, you can expect a dedicated mortgage loan expert to walk you through the process. The best part is that First Fidelis works hard to make the process as quick and easy as possible, and most of their loans close in less than 30 days.
At First Fidelis, jumbo loans can be used for one to four unit attached or detached owner-occupied properties, one-unit homes and non-owner-occupied properties, low/mid/high-rise new and established Fannie Mae or Freddie Mac warrantable condominiums, or planned unit developments. These loans can also be used to purchase or refinance a property.
If you live in the Kansas City area and would like to discuss a jumbo mortgage loan as an option for your home purchase, contact First Fidelis today at 913-205-9978.