| Lots of mortgage lenders offer jumbo mortgage loans | | | | - To fully document your income. |
| now, however the stipulations for approval are tougher | | | | - Your proposed housing payment must be under 38 |
| than people can ever remember. Jumbo mortgages | | | | percent of your gross income. |
| are defined as mortgages that are larger than your | | | | Borrowers who fall under these rules will realize that |
| typical conventional home loan. In other words, they | | | | today's interest rates are some of the best ever |
| are greater than the conforming loan limit, the | | | | offered. It is still in your best interest to compare rates |
| maximum loan amount that government agencies | | | | and fees for a jumbo loan as these loans are not |
| Fannie Mae and Freddie Mac will purchase. | | | | available everywhere. |
| The tricky part is the maximum loan limit is different | | | | The Down Payment Percentage is Crucial |
| according to location. The majority of housing markets | | | | In the most recent 24 months, the greatest challenge in |
| have the standard maximum of $417,000, and all loans | | | | lending above conforming limits has to deal with the |
| which are above that amount fit into the jumbo loan | | | | required down payment from lenders. It's very |
| category. In the high-cost housing areas, like Los | | | | challenging to locate a lender which will approve a |
| Angeles, any home loan greater than $729,750 is a | | | | jumbo loan over 80 percent loan to value or equity in |
| jumbo. So, you can get a conforming loan rate in Los | | | | the home for a refinance. |
| Angeles for what is a jumbo loan in most other cities. | | | | The reason is due to declining home values so normal |
| During the housing boom times which went from 2003 | | | | homeowners with excellent credit and income |
| until the summer of 2007, mortgage lenders had | | | | discover they are not qualified to refinance. Declining |
| relaxed their guidelines for jumbo loans simply to | | | | home values are lenders' greatest worry when |
| attract business. Once the sub-prime crisis hit, credit | | | | considering to offer jumbo mortgages. |
| became tight and trickled down to other segments of | | | | Document Your Income Source |
| the mortgage industry from Option ARMs, ALT-A to | | | | Jumbo mortgage applicants have to provide valid |
| prime borrowers, everyone began defaulting since | | | | documentation that displays they make what they |
| equity appreciation was not on the rise anymore. | | | | claim on the application. If borrowers can do that they |
| Lenders had to adjust and tighten their guidelines and | | | | will find exceptionally attractive rates from local banks |
| as a result every loan is scrutinized more closely with | | | | such as Bank of America, Wells Fargo and even local |
| stricter requirements, and especially so for the | | | | community banks. |
| self-employed. Stated income loans are all but gone | | | | In addition, borrowers should have credit scores 720 or |
| with many lenders unless you have 35% to 50% down | | | | above or debt to income ratios at 38 and below. No |
| or equity in your property and that is only with a slight | | | | exception nowdays as there is too much risk or |
| few lenders. | | | | lenders. Some good news just came in which is home |
| To be eligible for a jumbo loan in the current market, | | | | sales rose 10% in the month of October 2009. New |
| you should anticipate: | | | | likes this means loans are being done and consumers |
| - To have a down payment minimum of 20 percent to | | | | are taking advantage of it so maybe it is a sign that |
| buy (or have a minimum of 20 percent equity in order | | | | lenders will eventually loosen up the standards ever so |
| to refinance; some niche lenders still offer 10% down | | | | slightly. |
| for purchase). | | | | |