Get the funding you need for a luxury or high-end home with jumbo loan options from Galaxy Lending Group.
If the home you desire is priced above the conventional loan limits, usually $453,100 or more in most regions, a jumbo loan may be the right mortgage option for you. Our team at Galaxy Lending Group can help you explore jumbo mortgages on homes that exceed conventional and other loan type cap amounts, with competitive rates and flexible financing options.
The Facts About Jumbo Loans:
What Are Jumbo Loans?
Jumbo mortgages are home loans that exceed conforming loan limits. A jumbo loan is one way to buy a high-priced or luxury home. If you have a lower debt-to-income ratio, a higher credit score and a larger down payment, a jumbo loan may be right for you.
The limit on conforming loans is $417,000 in most areas of the country, but jumbo mortgages can exceed these limits. Even so, if you’re considering a home in a high-cost area, you may still be able to obtain a conforming fixed-rate mortgage or adjustable-rate mortgage for up to $625,500. FHA loans have limits of up to $729,750.Learn More
Benefits of Jumbo Loans
Higher Purchase Limits
Jumbo mortgages can exceed the conforming loan limit, currently $417,000 in most parts of the United States.
Jumbo loan rates have reached historic lows in recent years, and the interest on loans up to one million dollars may be tax-deductible.
Many jumbo mortgage lenders may allow you to take out a second mortgage for a combined loan-to-value ratio of up to 90 percent.
Minimize Cash Investment
Jumbo mortgages allow you to finance a large portion of a high-cost home without needing to invest a sizable cash payment to fit into conventional loan parameters.
Check Your Eligibility for a Jumbo Loan
These are the requirements for getting a Jumbo home loan:
Conventional loans are a good choice for borrowers with very good credit, which generally means a FICO score of 700 or higher.
There is no private mortgage insurance option with a jumbo mortgage, so the required down payment will be larger – typically 20%.
The property appraisal must support the purchase price for the home and the mortgage the borrower wants.
Jumbo loan borrowers may need to show they have enough cash reserves to cover one year of mortgage payments.
To prove your financial health, you’ll need extensive documentation, perhaps more than for a conforming loan.
While it’s fairly common to put down less than 20% on conforming loans, jumbo loans are more likely to require a down payment of at least 20%.
When applying for a jumbo mortgage, the maximum debt-to-income ratio for jumbo for loans is 45%, and the required reserve amount for jumbo loan borrowers can be as high as 20 percent of the value of the loan.
For your monthly mortgage payment to be no more than 38% of your income before taxes.
Homeownership in High-Income Areas
In many areas, real estate prices are high and above the normally allowed ceilings for conforming loan homes. Jumbo mortgages are designed to make homeownership an option without needing to liquify assets to reduce the loan amount. This can give you the option to live in the community you desire and still finance the home you choose, even if it is well above the $417,000 marker for conforming loans, or even above the FHA loan amount of $729,750.
Flexible Loan Options
Although jumbo mortgages have specific terms that must be met to qualify, there are still many options. There are fixed-rate 30-year loans, variable rates and even second mortgages available in some cases to cover up to 90% of the home price. If you meet the qualifications of the lender, there are many options to reduce the interest or payment amounts.