Jumbo Mortgage Loan Program
Have you ever wanted to buy a downtown Miami condo or beachfront multi-million-dollar condo, thought about a Jumbo Mortgage Loan Program? Looking to buy that villa in the countryside or construct a new mansion on the cliffside that’s an architectural dream? Then a jumbo mortgage might be for you.
This mortgage program is an ideal program for borrowers that need a little more borrowing power and have the capacity to carry a larger loan.
Further, jumbo mortgage loans are outside the parameters of what is considered a conforming mortgage loan. Many affluent borrowers look to jumbo financing to complete purchases that would outside normal eligibility requirements. If the subject property is a multi-unit properties or high-end luxury estates, this program may be right for you.
Multi-Unit Jumbo Loan
For those unaware, the Federal Housing and Finance Agency (FHFA) sets certain limitations on how large a standard mortgage can be. Depending on the type of collateral used to secure the loan, 1-4 units residential dwellings.
Conversely, jumbo mortgages are mortgage loans that exceed the set of these conforming loan limits. In all other capacities, they work like most other mortgage loans.
If you have a unique situation and the capacity to carry a higher debt-burden, this loan might be the right tool for you. If you are foreign born there might even be jumbo financing options for you to consider.
New Century Mortgage has been able to help fulfill the financing needs of hundreds of borrowers looking to leverage jumbo loan programs for their purchase or refinance transactions.
Contact us to learn more about how jumbo mortgages work, how long they have been around. Also, learn how this loan program might be the right financing solution for you.
Jumbo Mortgage Loan Program: A Brief History
Jumbo mortgage loan programs have been around for years. Generally, these programs have often been considered riskier compared to traditional mortgages mostly due to their size. Around the period leading up to the financial crisis of 2008, jumbo mortgage limits were not highly regulated.
When the Housing and Economic Recovery Act of 2008 became law, it established a ceiling to differentiate acceptable conforming mortgage loan amounts compared to their jumbo counterparts.The base loan limit in 2008 started at $417,000, but has significantly over the last few years. For 2022, the jumbo loan limit is $647,200 or another words any loan larger than this is considered a jumbo loan. There are jumbo VA mortgage loans, and jumbo conventional loans.
Since 2016, conforming loan limits have increased by almost $100,000 and in 2020, the Federal Housing and Finance Agency increased the maximum conforming loan amount to $510,400 from $484,350 from the year prior.
In general, as property values increase, the baseline loan limit increases pushing the ceiling higher and jumbo loans will not exceed 150% of the conforming loan limit for high-cost areas.
Jumbo Mortgage Loan Program
There are hundreds of providers that each have their own jumbo mortgage program. Each program and lender have its own credit eligibility and qualification criteria. Borrowers can complete both purchase and refinance transactions using a jumbo mortgage loan program.
To offset the lack of private mortgage insurance, some providers may require you to provide a larger down payment for a purchase, although that is not always the case. Similarly, debt-to-income requirements also vary between providers, but usually fall between conventional thresholds.
Broadly speaking, most loan program providers like to see higher credit scores or a history of carrying and managing higher levels of debt. Again, this is to offset the risk associated with the size of the new mortgage loan.
Want to learn more about our loan programs? New Century Mortgage can answer all your related questions.