Jumbo Loans

Jumbo Loans exceed the maximum loan amounts established by Fannie Mae and Freddie Mac conventional loan limits – $453,100 for 2018.  Conventional loans are loans that are not guaranteed or insured by any government agency including the Federal Housing Administration (FHA), the Farmers Home Administration (FmHA) and the Department of Veterans Affairs (VA).  Rates on jumbo loans were typically higher than conforming loans but have become essentially equal to conventional loan rates as the real estate market has recovered from the mortgage crisis of a few years ago. Jumbo Loans are typically used to buy more expensive homes and high-end custom construction homes, and usually require a higher down payment than traditional loans.  Jumbo loans are considered “non-conforming” as they do not conform to the two government-sponsored enterprises (GSE) Fannie Mae or Freddie Mac guidelines and therefore are not purchasable by the GSE’s.
Qualifying for a jumbo loan
Because of the larger loan sizes – up to $3 million depending on the lender – qualifying for a jumbo loan can be a little tougher than qualifying for a conventional loan.  Down payment requirements are higher and debt-to-income limits are tighter.  Credit requirements are stricter and reserve requirements (assets in your personal accounts that will cover the cost of the mortgage for a specified time) will be larger.
It’s critical to have all your ducks in a row long before applying for your jumbo loan. MLP Home Mortgage Inc. does jumbo mortgages in Eagan, or anywhere in Minnesota. Consulting with me before you even begin your home search can save you some serious headaches when it comes time to apply for your jumbo loan.
Here are a few tips
• Make sure your credit score and income is in line with the requirements of your potential jumbo loan.
• Ensure the assets in your personal accounts are properly seasoned and any large sum deposits are backed by proper documentation.
• Calculate your total assets as the sum of your liquid assets, a percentage of your investment or retirement accounts (as determined by your lender), and any gifts or business accounts that have been vetted with your lender.