What Exactly Is A VA Jumbo Mortgage? In This Current Period, Do You Still Need This Type Of Mortgage to Buy a Higher-Priced Home?

You’ve probably heard by now that the VA county mortgage loan limits are no longer in force as of January 2020. But you may still hear the terms “VA Jumbo home mortgage” or “jumbo VA home loan.” If there are no more VA loan limits, why would loans still use the “jumbo” word? The difference refers to Federal Housing Finance Agency (FHFA) conforming loan limits. These limits are the source of the terms “conforming” and “non-conforming” loan and “jumbo” loan. A jumbo home mortgage is any mortgage larger than the FHFA loan limits. Along with the financial limits, “conforming” loans also have underwriting guidelines from the government-sponsored agencies that buy the loans: Freddie Mac and Fannie Mae.

What is a VA jumbo home mortgage?

Even though you can get any size VA home mortgage that you can qualify for, VA jumbo mortgages will exceed the FHFA county conforming loan limits.

In many counties, the FHFA conforming loan limit is $484,350 for a single-family home mortgage. In higher housing price counties, the conforming loan limit is $726,525 for a single-family home loan. These limits also increase depending on the number of units in a property. In a high housing-priced county, the conforming loan limit for a 4-unit property maxes out at $1,397,400.

A VA jumbo mortgage exceeds any of these amounts, varying depending on the county where you want to buy. You may still be eligible for a no-money-down VA loan. Your funding fee on a VA jumbo home mortgage may also vary depending on your lender and their policies.

You can still get a VA mortgage at less than the FHFA conforming loan limits with no money down, and you can still roll your funding fee into the VA mortgage.

Some requirements for a VA jumbo home mortgage will differ between lenders. Although you may need to make a down payment for a jumbo VA home loan, it’s calculated as a percentage of the difference between the county conforming loan limit on the property you want to buy and your total mortgage amount.

A VA jumbo home mortgage could help you to buy the home you need and it can help you to ensure you and your family’s financial security. Talk with a knowledgeable, trained VA mortgage specialist to learn what your options are in a 30-year fixed rate VA jumbo home mortgage or other loan terms and options.

Sources

https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Maximum-Conforming-Loan-Limits-for-2019.aspx

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10 Things You Should Know About Jumbo Mortgages

Like their names, jumbo home mortgages and super jumbo home mortgages are large and even larger. In some counties in the U.S., a jumbo mortgage is any mortgage bigger than $484,350. This isn’t the case in Los Angeles and Orange counties. As higher-priced real estate markets, jumbo mortgages on single family homes in LA and Orange counties are any amount over $726,525. A super jumbo mortgage is typically one that is over $1.5M and in higher priced area’s in California, especially Southern California and in Northern California we routinely see super jumbo loans in the $10M to $20M loan amount range.

The size of jumbo loans isn’t the only thing that’s different about them. We’ve put together a list of 10 things to know about jumbo home mortgages:

1) Jumbo loans are “nonconforming” loans. This means they don’t “conform” to the limits for loans that are sold to Fannie Mae or Freddie Mac. These government-sponsored mortgage associations protect lenders against defaults and resell mortgages to investors.

2) Jumbo loans are non-conforming but still conventional mortgages. A conventional mortgage is a non-government insured mortgage. FHA mortgages have the mortgage insurance insured by the government.

3) Jumbo loan and Super Jumbo loan interest rates can be fixed or adjustable APR (annual percentage rate).

4) Jumbo loan credit scores should be strong. Most jumbo mortgage lenders ask for credit scores of 700 to 720 or higher.

5) Your DTI should be low. Lenders like to see a debt-to-income ratio (DTI) of less than 41% up to 45%. You need to have relatively low debt for a regular jumbo home loan. However, there are many other Jumbo and Super Jumbo loan options now available with slighltly higher interest rates that allow up to 50% DTI ratios.

6) You’ll need cash reserves. Could you cover up to a year’s worth of mortgage payments from your liquid cash reserves? Many jumbo mortgage lenders will ask for documentation of cash reserves.

7) Jumbo mortgages need more documentation. The majority of jumbo mortgages require thorough documentation, including tax returns, investment accounts and bank statements. Business profit and loss information may also be required. In some cases Jumbo and Super Jumbo mortgages may be available with limited streamlined documentation such as not using any tax returns, but instead using bank statements and/or profit and loss statements.

8) You may need more than one appraisal. Because jumbo mortgages represent a risk to lenders, they may request a second property appraisal to confirm property value.

9) Higher down payment. You can get a low or even no down payment on some loans, but not for jumbo mortgages. You will need to put down at least 10% of the purchase price up to 20% or more.

10) Interest rates differ. For a long time, jumbo mortgages and super jumbo loans had higher interest rates than conforming loans. But in housing markets like California, you can often find rates competitive with, or in certain cases lower than, the rates offered on smaller conventional mortgages.

You can find jumbo mortgages that will fit your needs, home purchase plans, and financial goals. Work with a jumbo mortgage specialist who understands how these larger mortgages are financed and approved. You will soon find yourself owning that dream property you desire. These jumbo and super jumbo mortgage loans are also available for non US Citizens, including both Permenent Residents Green Card Holders, and also Foreign Nationals. Super Jumbo Loans include those that can be $10 Million or $15 Million or higher loan amounts.

Source

https://www.moneygeek.com/mortgage/jumbo-loans/

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At The Moment, Is There a No Ratio Jumbo Loan and Can it Help You to Achieve High Priced Home Ownership?

You may find mortgage advice online that indicates you need to have a low debt-to-income ratio (DTI) to qualify for a jumbo mortgage loan. How low? A DTI of less than 36% is one of the most often-quoted figures.

While many lenders use debt-to-income ratios to determine eligibility for mortgages, not all do. You can find no ratio jumbo mortgages that can help you to buy the home you want.

What is a No Ratio Jumbo Home Mortgage?

A no ratio jumbo home mortgage is a home loan issued by a lender that uses criteria other than debt-to-income (DTI) to qualify you for your loan. You may find jumbo home mortgages that ask you to make varying down payments, but don’t require you to have a DTI lower than 36%.

What other criteria could I need to meet for a No Ratio Jumbo Loan?

No ratio jumbo mortgage loan criteria can vary. Some lenders may ask for you to show a reserve fund equal to a specified number of mortgage payments: for example, three to nine months worth of mortgage in the bank. You may also qualify based on co-ownership of property or business income.

You can also be asked to make a down payment that varies depending on your credit score. Some 100% loan-to-value (LTV) loans may be available for no ratio jumbo home mortgages.

One thing to remember about no ratio jumbo home loans is that they can fit your individual needs. One of the best reasons to consult with an experienced mortgage loan professional is to gain access to a variety of mortgage products. You may access additional loan programs that can help you to buy your high-priced home or luxury condo. These can include bank statement loans, and loans for buyers with limited credit history.

Sources

I just used this as an example: https://www.fundamentalrate.com/

https://www.rocketmortgage.com/resources/jumbo-loan

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