What’s a jumbo mortgage? In essence, it’s just what it sounds like: a mortgage that is bigger than normal. Most mortgages are what are known as “conforming loans,” and they have set limits on the loan amount. These limits vary from county to county throughout the United States, with higher cost areas having commensurately higher limits, but in most counties (including all the ones in Kansas and Missouri) the limit for a conforming loan is $453,100.
Anything higher is considered a jumbo loan. These limits are set by the Federal Housing Finance Agency, which oversees both Fannie Mae and Freddie Mac. If you want to finance a more expensive home, you need a loan that exceeds the limit set for traditional loans. That’s where jumbo mortgages come in.
What You Need to Know About Jumbo Loans
For the most part, jumbo loans behave just like regular mortgages, with the exception that they generally require higher down payments, better credit scores, a lower debt-to-income ratio, and two appraisals. They can be used for purchasing single-family homes, vacation homes, and investment properties. Just like regular mortgages, jumbo loans are available in either fixed or adjustable-rate varieties.
The biggest difference between a jumbo loan and any other mortgage are the criteria needed to qualify for one. Jumbo loans may require a higher down payment, which could be as much as 30% of the home’s price. (Most jumbo loans require a minimum down payment of at least 15%.) Some lenders also require a minimum credit score of 700, and a debt-to-income ratio of less than 43%. Some will also want to see 6 to 12 months’ worth of reserve capital before approving the loan.
It’s Easy to Apply for a Jumbo Loan in KC!
Fortunately, you’ve got a friend in the lending business at First Fidelis in KC. First Fidelis makes getting any kind of mortgage—whether it’s a jumbo or any other kind of home loan—quick, easy, and hassle-free, with most of our loans closing in under 30 days!
If you’re interested in learning more about jumbo loans, just give First Fidelis a call or fill out our online contact form today and our mortgage loan experts can help you determine if a jumbo loan is right for you and your new home!