Government-backed loans are typically available for homes in lower price rangers. Currently, the maximum loan amount approved by Fannie Mae or Freddie Mac is typically $417,000 for a single-family residence. In specially designated higher-cost areas, this can reach as high as $625,500. Homeowners looking for more expensive properties including primary residences, vacation homes, and investment properties will need to look toward options such as the Jumbo loan. A jumbo loan is a mortgage with a loan amount that exceeds the limits imposed by Fannie Mae and Freddie Mac. At Fairway Independent Mortgage Corporation, we offer jumbo loans on Georgia and Florida properties throughout Atlanta, Miami, and Orlando.
Mortgage loans that meet specific criteria set in place by Freddie Mae or Fannie Mac are called conforming loans. Since Jumbo loans exceed loan limit criteria, they are classified as non-conforming, and are generally a bit riskier for lenders. This means that lending criteria and credit requirements can be more stringent with a jumbo loan. Slightly higher interest rates can be charged as well. One thing to note is that lenders can always set their own criteria for qualification as the loans do not need to adhere to the same Fannie Mae and Freddie Mac guidelines that conforming loans do.
General Jumbo Loan Requirements
Credit Score – A credit score around 700 is going to be required for a jumbo loan. Keep in mind that a lender can set their own criteria so there may be flexibility in this area. A borrower’s unique financial situation can also influence the requirements.
Down payment – Traditionally, a down payment of at least 20 percent is needed for a jumbo loan. Down payments closer to 10 percent are becoming more commonly available for borrowers with higher than average credit and income. Private mortgage insurance (PMI) may be required if a lower down payment is desired.
Debt-to-Income Ratio and Income – A debt-to-income ratio of 43 percent or less is typically required. To verify income, documentation such as W2 forms and recent pay stubs will need to be provided. This is necessary to show that you have the available income and reserves necessary to support he mortgage you are requesting.
Property Appraisal – The property being purchased will need to support the purchase price and the mortgage being applied for.
You should also be prepared to provide documentation which outlines liquid assets, non-liquid assets, and any other loans that you may hold as these may be required. This type of information is needed to support your ability to repay the loan being applied for. Missing documentation can delay the approval process. The more information you can gather ahead of time, the smoother the process will be.
Jumbo loans may be the ideal loan type for a variety of borrowers including those looking to purchase a luxury home, investment property, or even a second home in Georgia or Florida. At Fairway Independent Mortgage Corporation, we offer low rates and flexible terms on jumbo loans throughout Atlanta, Miami, and Orlando. Contact us today for more information on jumbo loans in Georgia and Florida or to begin the pre-qualification process.