You may have heard the term Jumbo Mortgage and thought to yourself “It’s a loan for a home…of course it’s huge!” but what exactly is a jumbo home loan?
What is a Jumbo Mortgage?
If you’re looking for a smart way to invest your money in 2021, Utah’s housing market is yielding excellent returns on investment. For that reason — and many more — now is a great time to look into owning investment property in Utah. Read on to learn more, and contact Loan Remedy to find out if you qualify for today’s best rates on Utah investment property mortgages.
A jumbo loan is a type of conventional loan that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA) for Fannie Mae and Freddie Mac. In 2023, single-family mortgages with balances higher than $726,200 in most U.S. counties (and $1,089,300 in high-cost areas) will be considered jumbo.
What Requirements Do They Have?
So what requirements come with jumbo loans? Not surprisingly they are more stringent when approving them as there is a lot more risk involved with such high loan amounts but here are some of the common requirements:
Credit Score: Your credit score generally will need to be above 700 to qualify for this size of loan.
Down Payment: You should expect to put down a 20% minimum downpayment, and many lenders will require even more.
DTI Ratio: Your debt to income ratio needs to be below 45%. Even if on paper you have a large income and think that will be suitable for a large loan, if you have a lot of debt it will not be approved.
Closing Costs: Expect to have higher closing costs when it comes to jumbo loans than you would have with a conventional mortgage.
It’s always important to speak to your lender about your options when looking at purchasing a home and weighing the different available options to come up with your best plan of action to set you up in a good place for the long term. If you have questions about if it’s a good option for you, Schedule a consult with us and let’s chat more!
