Mortgage Talk - Jumbo Loans

In Barnstable County, mortgages over $453,100 are considered "Jumbo"
Frank Merola is Executive Mortgage Banker for William Raveis Mortgage LLC.

If you look up the word jumbo in the dictionary you will see something akin to “a very large thing”

In mortgage speak, Jumbo loans are Conventional loans that are non-conforming. Confused yet? What that means is that a Jumbo loan exceeds the regional loan limits set by Fannie Mae and Freddie Mac.

For Barnstable County, mortgage loans larger than $453,100 will be considered Jumbo.

Lenders set their own underwriting guidelines for jumbo loans, so eligibility requirements may vary among lenders often times they are accompanied by stricter guidelines for credit, income, down payment and debt to income.

Jumbo loans can be used to purchase primary residences, second homes and investment properties.

Jumbo loans can also be used to refinance an existing mortgage.

Standards vary from lender to lender, but typically Jumbo loans will require a loan to value of 80% which equals a 20% down payment.

Whereas other conforming loan programs allow a debt to income ratio up to 50% and FHA up to 55% for Jumbo loans, total debt to income (DTI) is typically 38 - 43% or less

For Jumbo financing. FICO score requirements vary but often times lenders will want to see 680 middle score or higher.

I have seen many different types of products for Jumbo loans in recent years. Not only is the vanilla 30 year available but there is also Interest only product, an Adjustable Rate Mortgage product, a 15 year Jumbo product and a few more.

When it comes to pricing or interest rates we have historically seen Jumbo loans price higher than conforming loans. Lately the gap has closed, and some lenders are aggressively pricing their Jumbo products to levels below conforming rates.

So to sum it up, if you are a high-income earner with a solid financial history, have good credit and a larger down payment the Jumbo loan may be the right loan for you if you want to buy that higher priced home.

For more information about jumbo loans please contact me via phone or email.

Frank Merola

Executive Mortgage Banker

NMLS Mortgage Loan Originator ID: 1020051

William Raveis Mortgage LLC NMLS ID #2630

Cell 508-740-5922

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