Do you have your eye on a home in an upscale neighborhood? Is your dream home considered a luxury home? What do you do when the home of your dreams costs more than the average home in the Ft Lauderdale area? It is time to consider a jumbo loan.
What is a Jumbo Loan?
Generally, when one takes out a mortgage on a home, the loan is called a conforming loan. A conforming loan is a loan that conforms to government created guidelines. These guidelines cap the amount of the loan for a single family home, which in 2017 is set at $424,100 in the continental US. The guidelines also outline criteria for income to value ratio, income to debt ratio, and credit score. Many homes on the market today, especially in Ft Lauderdale, cost more than a conforming mortgage can cover.
Any loan that does not meet the guideline limits, especially in the area of the loan amount is known as a jumbo loan. Most state laws define a jumbo loan as, a loan that exceeds $417,000. However, some states, namely Hawaii and Alaska, have higher rates for their jumbo loans. Jumbo loans qualify for similar programs as conforming loans, for example, you can find fixed-rate jumbo loans, ARMs and interest-only loans for the jumbo loan program.
Who Qualifies for a Jumbo Loan?
Jumbo loans are higher risk loans, so you will pay more for a higher mortgage rate for a jumbo loan. Depending on your risk, your credit history, your finances, your lender and the amount of loan you take, you can pay as little as .25% more or as much as a few points more than a conforming loan. You are not likely to get a fixed-rate jumbo loan. If you want this type of loan, be prepared to take on an adjustable rate loan. Your down payment size will greatly influence your ability to get a jumbo loan in Ft Lauderdale and the amount of jumbo loan for which you are approved. Your credit will also influence both the amount of loan and your ability to obtain the loan.
Because of the housing bubble crisis of 2007-2008, there are more restrictions on jumbo loans and who can obtain them, but they are not at all impossible to obtain. You can increase your chances of being approved by doing a few things. You must be able to make at least a twenty percent down payment on your purchase, the more you have the better your chances will be. You must provide documents proving your income, including pay stubs and tax documentation. The monthly payments for this mortgage can equal no more than thirty-eight percent of your gross monthly income. Ideally, your credit score should be close to 700 or above, and 600 at the bare minimum. With a traditional loan, your monthly debt payments should be lower than thirty-three percent of your income. For a jumbo loan, you should try to have even less, ideally less than thirty percent if possible. Jumbo home loans in Ft Lauderdale are a great option if you have the credit, down payment and income necessary to meet the requirements of a jumbo loan.
How Do I Apply for A Jumbo Loan?
Kloze is an expert on jumbo home mortgage loans in Ft Lauderdale. Our goal is to help individuals like yourself get into the home of their dreams. Our professional account managers can help you find the perfect loan. We understand the Ft Lauderdale area and the real estate market. We are here to walk you through the lending process for jumbo home mortgage loans and help you get into that home you have had your eye on! Our website is full of information on NHL lending practices and procedures, and we are always here to answer your call! If you do not qualify for a jumbo loan, we also offer traditional loans, FHA loans, and VA loans. Call us today to schedule an appointment. Let us help you get started on your way to owning your dream home.