So you found the home of your dreams. However, it’s valued at more than what a traditional loan may permit. No worries. There’s a unique solution for that—it’s called a Jumbo Home Loan and you can learn more about it here.
So What’s a Jumbo Home Loan?
With a Jumbo Home Loan, you can buy or refinance a home with greater financing flexibility for higher-priced homes. This loan is useful for homes that exceed the maximum amount for a conventional conforming loan, which in 2020 will be $510,400 for most of the country. (In high-cost areas this will be as much as $765,600). New American Funding offers these loans in a variety of options—but more on that later.
Some General Truths about Jumbo Loans
For those who are thinking of applying for a Jumbo Home Loan, you will need to have a steady income with documentation that you can sustain monthly payments on a bigger-sized loan. Many lenders typically look for higher income earners. (Self-employed loan applicants will need to provide additional documentation about their income.) Down payments have loosened in recent years from as high as 30% to the current 10-20% of the total purchase price. However, 20% is considered standard.
In general, the debt-to-income (DTI) ratio requirements are lower (under 43% and nearer to 36%) for jumbo loan programs. Because Jumbo Home Loans are larger, monthly payments are going to be larger than with a typical loan.
Refinancing a Jumbo Home Loan
By refinancing a Jumbo Home Loan, you might be able to lower your interest rate and monthly payment, while staying on track with your financial goals. Refinancing a Jumbo Home Loan may also allow you to change the terms of your loan and even pay off your mortgage sooner and build equity faster. Another refinancing option is to get a cash-out refinance up to $500,000 so that you can pay off high-interest debt, remodeling expenses, or to spend as you wish. Regardless, there are plenty of options to consider.
Questions to Ask
Before you look for a Jumbo Home Loan, ask your lender some key questions such as what is the maximum amount you can borrow? What are the credit requirements to qualify? Are there interest-only options? Is a second home purchase eligible? Will your lender allow an additional borrower (i.e., a family member) to help you qualify for your loan by combining their income and debts with yours? Can you pay off any debts before closing? And the list goes on…the most important thing is that your loan and your lender meets your needs.
What New American Funding Has to Offer
New American offers a variety of helpful Jumbo Home Loan options with flexible features. Plus, with tens of thousands of positive reviews and counting, we are dedicated to keeping customers like you happy, satisfied and informed every step of the way. Contact a New American Funding Loan Officer today to see if you qualify for a Jumbo Home Loan.