Buying a higher-end home or large property has some similarities to the purchase of regular real estate, but there are also many different steps to take in the purchase of a high-end property. One of the differences is securing financing for this type of home. If you are shopping for luxury property and need financing you have probably come across the term jumbo mortgage.
A jumbo mortgage is a home loan for an amount larger than the standard mortgage limits established by regulation. In most areas of the United States, this limit is set at $417,000, in areas with higher home prices the limit is set at $625,500.
Below is the loan limit breakdown of 2021 for different areas across the U.S and U.S. Territories:
- 2,916 counties across the country have a conventional mortgage limit of $548,250
- 108 counties have a limit of $822,375. These areas are high-cost housing markets including places like Los Angeles, New York, San Francisco, etc.
- There are 115 counties with higher price markets but not extremely high with limits between the two previous numbers.
Qualifying for Financing a Jumbo Loan
The qualification requirements for a jumbo mortgage are a little stricter than with a conventional home loan. Down payment requirements are much higher in many jumbo loans. The down payment varies from lender to lender and could range anywhere from 15% all the way up to 30% for home purchases. A large number of jumbo mortgage lenders require a credit score of 700 or higher, a debt-to-income ratio of 43% or less, and 6 to 12 months’ worth of reserves.
“If you are self-employed, having a company website, business licenses and other relevant information are helpful to include with a loan application.
Just a little FYI…Some underwriters have been known to search for your name or company on Google, so it’s probably a good idea to know what type of results and impression they’ll find if they choose to do some digging.” – My Lender Jackie
When you go in to get pre-approval or approval for a jumbo mortgage you will want to make sure you have solid documentation and proof of all these things to better ensure a smoother loan approval process with less waiting for the proper documents.
As an expert in assisting buyers of larger properties with higher-end price tags, I can help you find the right property and easily follow the steps needed to obtain a jumbo loan. For more information on purchasing properties with larger price tags, contact my office today or please feel free to browse the website.
Start browsing below or contact me today to be pre-approved for a jumbo loan in Sherman Oaks Real Estate
The following neighborhoods are located within Sherman Oaks CA:
