A jumbo loan is a type of loan used to purchase a home when the loan amount exceeds the limits imposed on various other loans. Fannie Mae and Freddie Mac place limits on the size of the loans they will purchase from lenders. When those limits are exceeded, you will find yourself in need of a jumbo loan. Loans within the limits set by these entities are called conforming loans. Jumbo loans on the other hand, are called non-conforming loans, and the maximum amount you can borrow varies by lender. North Georgia Lending can help you understand your jumbo loan options so you can make the best decision for your next home purchase.
How To Qualify
The qualifications will vary depending on the type of loan and lender, but jumbo loans typically have more stringent requirements. Your finances will be reviewed fairly closely as these loans have a strict underwriting process, so it is not advised to apply for this type of loan unless you are in a stable financial position.
The reason these loans have more guidelines is that they involve more risk than a government-backed loan. Although they do have more to gain since the loan itself is higher and can be more profitable to the lender.
In order to qualify for a jumbo loan, you will need to have a larger income, high credit score, and a generous down payment and savings. You’ll need to be able to prove you have enough money to pay off the monthly payments for the first 6-12 months when applying for a jumbo loan as well. If you do not meet those requirements, you can always discuss your options and the specific situation with a lender directly as having a low debt to income ratio can outweigh or lower credit score.
Is It Right For Me?
Jumbo loans are not right for every situation, but they can be the perfect choice if you are in a situation where conforming or government-back loans do not meet your needs. It is possible to get a decent interest rate and finance your home even if have a budget that exceeds those limits. Jumbo loans are also a great option for borrowers looking to purchase second homes or investment properties.
Reach Out Today!
If you think a jumbo loan is a good idea for your purchase, make sure to review your finances and weigh out all your options. We want to make sure you are making the best decision for your next purchase, so please contact North Georgia Lending in Cumming, GA today!