Many of the popular government-backed loan programs and certain conventional loan options are restricted to certain amounts. Buyers seeking loans that exceed the limits for these types of loans will need to consider other options. One of the most common alternatives is the Jumbo loan. Jumbo loans are a valuable option for borrowers looking to purchase more expensive homes in Nevada. At All American Home Mortgage, your local Henderson Mortgage lender, we offer great rates and flexible terms on jumbo loans.
Most conventional loans made today are purchased by either Freddie Mae or Fannie Mac. Before either entity will purchase a loan, it must meet certain criteria. Loans that meet these criteria are considered conforming loans, while those that do not are nonconforming loans. Conforming loans cannot exceed $424,100, although in some high-cost areas, this limit is raised to $636,150. Conventional loans that exceed these limits are referred to as Jumbo loans. Jumbo loans are often the preferred home loan for borrowers looking for luxury homes, second homes, or investment properties in Henderson.
Since they cannot be sold to Fannie Mae or Freddie Mac, it is not uncommon for lending criteria and credit requirements to be a bit more stringent with a jumbo loan. On the other hand, since jumbo loans do not need to adhere to the same Fannie Mae and Freddie Mac guidelines that conforming loans do, lenders can be flexible with the requirements for the jumbo loans they offer. While each can set their own unique requirements, most Henderson mortgage companies will follow common industry standards.
Henderson Jumbo Loan Requirements
Credit Score – A credit score around 700 is generally needed for jumbo loans. We may be able to offer flexibility in this area depending on factors such as income and down payment availability.
Down Payment – Historically, a 20% down payment would be required required for a jumbo loan. A down payment of 20% allows borrowers to avoid private mortgage insurance (PMI). For those with better than average income and credit, smaller down payment options may be available. PMI could be required with smaller down payments.
Debt-to-Income Ratio and Income – A debt-to-income ratio of 43 percent is generally required, although there may be flexibility in this area as well. W2 forms, recent paystubs, and other similar documentation will be needed at the time of application to verify income.
Property – The property being purchased will need to support the purchase price and the mortgage being applied for.
When applying for a jumbo loan, be prepared to provide documentation that outlines liquid assets, non-liquid assets, and any additional loans you may have. This information is used to help support your ability to repay the loan amount that is being requested. Any information you can gather ahead of time will help to expedite the application process.
Jumbo loans can be an excellent option for Henderson residents interested in purchasing an investment property, a higher-priced home, or even a second home. Contact All American Home Mortgage today for more information on our Henderson jumbo loans options, or to apply for your jumbo loan today.