If you are seeking to buy a higher-value or luxury home in Raleigh, Clayton NC or anywhere in North Carolina, jumbo loans are the best mortgage program. Government-backed loans are designed for homes in lower price ranges and borrowers with lower income and credit scores, but there is still a option for applicants seeking a larger loan. With a competitive real estate market, there are several areas where you may need a jumbo loan to purchase your home.
What is a Jumbo Loan?
A jumbo loan is a non-conforming loan that exceeds the conventional loan limit for the area where the home is being purchased, or does not meet the guidelines set by Fannie Mae and Freddie Mac. In most areas of North Carolina, this is $424,100 for a single-family residence, although in several parts of the state the conventional loan limit is as high as $636,150. Jumbo mortgages can a variety of property types such as primary residences, vacation homes, investment properties, and condominiums that are more expensive. Rob Yo The Mortgage Pro can offer jumbo loan amounts as high as $2 million.
Conforming loans are a type of conventional mortgage that meet specific requirements set by Freddie Mac and Fannie Mae. Because jumbo loans exceed the loan limit criteria, they are generally riskier for lenders, and as such are non-conforming loans. Because jumbo home loans cannot be resold to investors by Fannie and Freddie, there have more stringent lending criteria, credit requirements and higher interest rates than conforming loans do.
Jumbo Loan Eligibility
Because they are non-conforming loans, jumbo mortgages have different requirements for eligibility. Although most lenders require a credit score of around 700, Rob Yo The Mortgage Pro can offer competitive jumbo loan rates for borrowers with credit as low as 660. Your unique financial situation also influences jumbo loan credit requirements.
Traditionally, a down payment of at least 20% will be required. However, lower down payments closer to 10% are becoming more commonly available, particularly if you have higher than average credit and income. For even lower down payments, private mortgage insurance (PMI) will likely be required.
The property being purchased will need to be able to support the purchase price, prior to the mortgage being applied for.
For a mortgage to qualify as a jumbo loan, the loan amount you are requesting will need to exceed the conventional loan limits for the area where the property is being purchased. To learn what the limits in your area, visit Fannie Mae’s website or contact Rob Yo The Mortgage Pro at (919) 322-8201.
Debt-to-income ratios of 43% or less will be required. Additionally, income verification in the form of W2 forms, recent pay stubs and other documentation will be needed. Lenders require this as proof that you have the necessary income and reserves to support the mortgage payments you are applying for.
Other documentation you should have ready includes proof of liquid assets, non-liquid assets, and any other loans you hold. This information is needed to prove your ability to repay the loan you are requesting. If you are missing this documentation, it can delay the approval process and make it harder for you to purchase your home. The more documentation you have ahead of time, the easier the process becomes. If you need help gathering and preparing documents, Rob Yo The Mortgage Pro can help you.
Benefits of Jumbo Loans
If you are considering obtaining a jumbo mortgage, it can be helpful to know the benefits of this loan option.
- Larger loan amounts up to $2 million available for higher-value properties
- Helps you avoid dipping into savings to purchase the property
- Choose from a variety of loan programs, including fixed-rate and adjustable-rate mortgages
- Only one loan for the entire loan amount as opposed to multiple mortgages, providing quicker turnaround
- 90% Loan-to-Value Purchase with no PMI
VA Jumbo Loans
If you are a qualified veteran, you can qualify for a VA Jumbo Loan. If you are seeking a mortgage that exceeds your county’s VA Loan Limit, ask Rob Yo The Mortgage Pro about VA Jumbo Loans. Although there are nominally limits on VA Loans, you can obtain a mortgage for $1 million or more.
Unlike most VA Loans, a VA Jumbo Loan will require a small down payment. Typically the down payment will be paid as a percentage of the amount your mortgage exceeds the loan limit by. For example, if the loan limit in your county is $424,100, and the loan amount you are requesting is $524,100, you would pay your down payment on the $100,000 your loan exceeds the limit by.
Get Pre-Qualified for a Jumbo Loan
For borrowers with higher income and credit score, jumbo loans are the ideal loan type for you to purchase your luxury home, investment property, condominium or even a second home. Rob Yo The Mortgage Pro provides jumbo home loans throughout the entire state of North Carolina, including Raleigh, Clayton NC, Charlotte, Wilmington and Greensboro. Rob Yo The Mortgage Pro has some of the most competitive jumbo loan rates and flexible terms in the state. For more information on jumbo loans, or to start the application process, call Rob Yo The Mortgage Pro at (919) 322-8201 or fill out the form on this page.