If you have your heart set on a property in California then you might be worrying about being able to afford property there. California has one of the highest home appreciation rates which makes it a challenging place to buy property but also one of the most profitable. The good news is that Dawn Palestini of Palestini Home Loans is available for your assistance. Book your consultation with her and learn about Jumbo loans, the best option for mortgages when you are trying to buy properties in high cost areas. Dawn will be able to guide you about the requirements and how you can meet them.
What is a Jumbo Loan?
Apart from the government backed mortgage programs, such as VA loans and USDA Loans, there are Government Sponsored Enterprises or GSE for short, too. These have been initiated to provide service to the public, by congress. They are overseen by FHFA or The Federal Housing Finance Agency who is also responsible for creating and setting the guidelines in the market for mortgage loans and ensuring the standards are followed. This in turn retains market stability and reduces defaults on mortgages. This is done by setting loan amount limits according to area and economical standings.
Jumbo Loan Qualifier
Home loans from $510,400 to $2,000,000 with competitive interest rates.
Interest rates for jumbo loans are typically lower than conventional loans.
Purchase a home with as little as 20% down.
Jumbo loans are available for primary homes and second homes, located on up to 20 acres.
Some GSE Companies that set these guidelines are Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) who then further guarantee and back loans which adhere to the guidelines. These loans are known as Conforming Loans. The ones however, which do not concur to these set standards are called Non-Conforming Loans.
Jumbo Loans are one such Non-Confirming Loan as they exceed the amount guidelines set by the FHFA. This also denotes Jumbo Loans are not undertaken or purchased by Freddie Mac and Fannie Mae due to the same reasons.
What are Jumbo loans’ requirements?
A Jumbo Loan is quite consistent in requirements to that of a conventional loan, however considering the large amount which is loaned, the eligibility is quite stringent. In order to qualify you would need to have a very high credit score and a large sum of available finance, enough to cover more than a year’s equivalent in monthly payments. Another determining factor is the debt burden, which determines the spendable funds available to a borrower after deduction of all expenses from their income.
What are the benefits of Jumbo loans?
Loan Amount: As the name suggests, Jumbo Loans are mortgages of larger than average sums loaned out.
Less Upfront: The average down-payment on most mortgages is around 20%. As the properties against which Jumbo Mortgages are taken, are usually priced at the higher end, in order to accommodate for more borrowings, the upfront payment criteria is more relaxed even going as low as 10% to 5% in certain areas.
Interest Rates: Interest rates are comparatively lower for Jumbo Loans as those compared to a traditional mortgage. This again is in order to promote more people to opt for this type of loan. The borrower even has the flexibility to choose between a fixed or variable interest rate to be applicable on the mortgage amount.
Tenure: To add to the flexibility of the loan, the lending institutions are quite accommodating with the duration of a Jumbo Loan too. The borrower has the option to choose from a wide array of terms available for one that best suits their position.
I am Proudly Serving These Areas
NMLS ID #361616
CA Lic. #CA-DBO361616
490 Chadbourne Rd #A172
Fairfield, CA 94534
We've been helping customers afford the home of their dreams for many years and we love what we do.
Xpert Home Lending, Inc. is a Real Estate Broker Licensed by the California Department of Real Estate DRE #02166758 NMLS: 2179191
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