Here’s what every buyer should know about nonconforming jumbo loans.
What are jumbo loans? By definition, these are nonconforming loans or mortgages that exceed the limits set by the Federal Housing Finance Agency. If you want a big home, they can be a great option for you.
In general, a loan is considered to be a jumbo loan if it’s higher than $647,200. Since they don’t have federal backing like conforming loans, jumbo loans typically require greater scrutiny of your credit score, debt-to-income ratio, cash reserves, etc. As a result of these stricter requirements, this kind of loan need to be manually written, meaning someone will thoroughly review your financial history to ensure that you can afford it.
Jumbo loans used to be reserved for huge houses only, but this has now changed due to increasing housing prices in the last few years. Moreover, you may need to qualify for a jumbo loan depending on the area you are looking to buy, since the housing and mortgage industry is changing dramatically. For example, a $700,000 or $1 million home may not get you as much as it used to.
If you have questions about jumbo loans or any other real estate concerns, call or email me. I’d love to connect with you!