A Jumbo Loan May Be The Right Size
If you are looking for your dream home, a second home, or an investment property, you may find that you will need a jumbo loan, also known as a jumbo mortgage, to finance your dream. Since property values tend to be higher in California, more people need jumbo loans for financing. Jumbo loans are different than conventional mortgages, so the mortgage experts at 米6体育平台 share this important information to ensure you understand the unique features of a jumbo loan.
What’s A Jumbo Loan?
A jumbo loan is designed for expensive, higher-end properties that exceed the loan limits of a conventional mortgage. Each year, the Federal Housing Finance Agency (FHFA) sets what is known as the conforming loan limit of conventional mortgages. A jumbo loan is a mortgage that exceeds the limits of conventional loans. The limits vary by county, but most consider a loan jumbo when the amount exceeds $647,500. Some counties have higher loan limits, such as Los Angeles, where a jumbo loan is over $970,800 and $879,750 in San Diego.
What Do I Need to Get a Jumbo Loan?
A jumbo loan and a conventional mortgage do the same thing: provide you with financing. The main differences are the loan amounts and the borrower requirements. The loan amount you can qualify for will depend on several factors, including:
- If you are a first-time homebuyer
- If you are an investor
- A higher credit score
- A lower loan-to-value (LTV) ratio, which measures the amount of your mortgage compared to the value of the property
- A lower debt-to-income ratio, which is your total monthly housing and debt payments versus your gross monthly pre-tax income
- More cash available
To get started, figure out how much you can afford to borrow. And it’s also a good idea to get a loan preapproval to show sellers you are serious about purchasing the property and have financing.
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