When it comes to buying a home, it’s important to identify the type of mortgage that best suits your needs. If you are looking at a bigger, more expensive home, a jumbo loan may be the right mortgage option for you.
A jumbo loan is considered a “non-conforming loan,” because it surpasses the conforming loan limits set in place by Fannie Mae and Freddie Mac. In most areas, the conforming limit is $647,200. Which means anything above that amount is considered a jumbo mortgage.
Since jumbo loans are non-conforming, they are not required to meet the underwriting standards set by Fannie Mae and Freddie Mac. As a result, jumbo loan lenders can set their own requirements for borrowers. This allows things like minimum credit score, minimum down payments, maximum debt-to-income ratio, and other factors to vary depending on the lender.
In the past, jumbo loans typically required around 20-30 percent down. That means if you are buying a home for $750K, you would need to put down at least $150K – and that’s not even including the closing costs.
Nowadays, homebuyers have more options available to them. Some lenders offer jumbo loans with as little as 5-10 percent down. It truly all comes down to which mortgage company you work with. This is why home buyers should be sure to shop around when considering a jumbo loan.
At Georgia Platinum Mortgage, if someone wants to buy a home for $800K, our lenders would require $40K for the down payment, which is much lower than the standard. Not only do we allow 5% down on the property but no mortgage insurance is required!
So, if you have your sights on purchasing a big home with all updated and modern amenities, a jumbo loan may be your best option to finance it.
Bottom line, it is much easier to get a jumbo loan now than it has been in the past. Ready to get started? Explore your loan options today with one of our experienced loan officers.