A Jumbo loan, is any loan over the Conventional conforming loan limit. While the 30 Year Fixed Jumbo is the most common term, you can get a 15 Year Fixed. Guidelines on Jumbo loans follow Conventional guidelines closely, though there are important differences that make Jumbo loans tougher to get than Conventional loans. Generally you will need to provide more specific documentation, and respond to more detailed underwriting requests. Jumbo loans have more limitations as to property types, debt ratios, credit scores, reserves, appraisals, and more, than Conventional loans. The major key is that Jumbo loans meet required 'guidelines' set by individual lenders that place and purchase Jumbo loans. These guidelines vary greatly by lender, which makes dealing with a mortgage broker like PSM advantageous for buyers, as we compare multiple lender's guidelines. While calling 2-3 retail banks or credit unions may result in a "No" on a Jumbo loan request, PSM may be able to help with a "Yes" with our multiple Jumbo sources.
Avoiding going with a Jumbo loan, while still borrowing over the Conventional limits, is possible is some cases. This is done to save money and avoid having to deal with stricter Jumbo requirements. Examples:
Interest rates vary by risk similar to Conventional loans. This is due to Loan Level Price Adjustments and other factors. 'Loan-to-Value' (LTV), credit scores, Loan Purpose, Occupancy, and other specific loan parameters vary the rate and/or costs. An owner occupied SFR purchase with 810 credit score and 40% down, gets a 'better deal' than a 725 score and 10% down scenario. Owner occupied gets better than Investment. Purchase gets better than Cash-Out Refinances.
Usually there is no Mortgage Insurance (MI) with Jumbo loans, even at 10% down.
On an owner occupied purchase, gifts are allowed from relatives, and sellers can pay some or all of buyer's closing costs and pre-paids to reduce funds needed to close.
While the lender's guides are 100's of pages long, this brief description are some of the general requirements. There are restrictions and you can't necessarily combine parameters and get a loan. Jumbo loans change requirements frequently, much more often than conventional conforming loans do. Minimum Down Payment and Maximum Loan to Value numbers change without notice. Please call us to discuss your scenario. It is too complex to try and learn all the nuances on the internet.
PURCHASE:
Minimum Down Payment as a percentage of purchase price:
Owner Occupied, SFR, Condo, PUD - 1-4 unit(s) 10%
Second Home, SFR, Condo, PUD - 1 unit 10%
Investment, SFR, Condo, PUD - 1-4 unit(s) 20%
REFINANCE:
Maximum Loan to Value = percentage of value:
Owner Occupied, SFR, Condo, PUD - 1-4 unit(s) 90%
Second Home, SFR, Condo, PUD - 1 unit 90%
Investment, SFR, Condo, PUD - 1-4 unit(s) 80%
CASH OUT REFINANCE:
Maximum Loan to Value = percentage of value:
Owner Occupied, SFR, Condo, PUD - 1-4 unit(s) 85%
Second Home, SFR, Condo, PUD - 1 unit 85%
Investment, SFR, Condo, PUD - 1 unit 75%
Investment, 2 to 4 units 75%
Pacific Sunset Mortgage, LLC. NMLS #1086349 ML-5769. Steve Emory Sr Loan Officer NMLS #45523. I am authorized to conduct business in Oregon and Washington States. 15455 NW Greenbrier Pkwy Suite 100, Beaverton, OR 97006. Certain restrictions apply. This is not a commitment to lend. Applicants must qualify and Not all applicants will qualify. Equal Housing Lender. All opinions expressed by Steve Emory, on this website, on his Facebook pages, are Steve's opinions and do not reflect the opinions of Pacific Sunset Mortgage, LLC. You should not treat any opinion expressed by Steve as a specific inducement to take a particular mortgage or follow a particular strategy, but only as an expression of his opinion. You must make an independent decision regarding mortgages or strategies mentioned on his website. Before acting on information on this website, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial counselor. http://www.nmlsconsumeraccess.org/entitydetails.aspx/COMPANY/1806349