Purchasing a Higher End Property With a Jumbo Loan

Are you interested in buying a deluxe home that comes with a more expensive price tag, and wondering what types of financing options are available to you? If your dream home is located in a high-priced neighborhood and is on the more expensive end, you may want to consider applying for a jumbo loan. If you are looking to buy a luxury home in Mount Pleasant, South Carolina, Lucey Mortgage Corporation is here to help. Read on to learn more about financing a home with a jumbo loan.

What Is a Jumbo Loan?

A jumbo loan is classified as a “non-conforming” loan, which means that it is considered too expensive to be a conventional conforming loan. The government-sponsored entities, (GSEs), Freddie Mac and Fannie Mae establish a maximum loan limit amount for traditional conventional loans, which is currently set at $647,200. If a borrower needs a loan that exceeds that amount, then a non-conforming jumbo loan will be needed in order to finance the home. Because mortgage lenders are not guaranteed repayment if a borrower is unable to pay the loan costs, they are considered a higher risk mortgage, and have rigorous eligibility requirements.

What Are the Advantages of a Jumbo Loan?

If you are able to meet the qualifications, there can be several benefits to getting a jumbo loan. Getting a jumbo loan allows you to take out a substantial loan amount, allowing you to purchase a variety of homes, such as a vacation home, investment property, or a high-end luxury residence. You may be able to obtain competitive interest rates and you may have the option to refinance the loan for a better rate later on. Another advantage of a jumbo loan is that private mortgage insurance payments are not typically required.

Requirements For a Jumbo Loan

Because jumbo loans involve a significant amount of money and they do pose higher risk for lenders, the eligibility requirements for a jumbo loan are very strict. Typical requirements for obtaining a jumbo loan include:

• A minimum down payment of 20%
• A credit score of 720 or higher
• A low debt-to-income, (DTI) ratio is required; a typical DTI of 43% or lower is ideal
• You must provide necessary paperwork to verify your income, tax information, and assets and demonstrate that you can afford the cost of monthly mortgage payments
• You may be responsible for paying for more than one home appraisal to determine the overall value of the home

Get Help Financing Your Dream Home

If you need a financial boost to help you afford your dream property in Mount Pleasant, South Carolina, and have questions about jumbo loans, contact Lucey Mortgage Corporation today for a consultation.