Jeff’s take – Jumbo loans are Non-Conventional, meaning they are not underwritten using Fannie Mae and Freddie Mac exact guidelines. For the most part, Jumbo financing means any loan above $649,750.00 (differs for each county). NGG has seen loan financing go as high as $4 million. Jumbo financing is all about customization based on the client’s income, assets, credit score, and RESERVES. For example, if a client wants a $4mm loan, they need to have 36 months-worth of monthly Principal, Interest, Property Taxes, Property Insurance, and HOA (PITIA) in liquid assets (stocks, CD’s, cash, etc.). On $1.5mm loans or less, the requirement on reserves are way more relaxed.
The qualifying process on Jumbo loans can take a bit longer than normal because the typical client purchasing a higher-priced home usually have more documents to review. Those additional documents may include: Personal Bank Statements, Business Tax Returns, Investment Home Statements, Trust Agreements, etc. It may be an invasive process, but know that our team respects the client’s privacy to the fullest. Our rates on Jumbo loans are phenomenal because we have preferred relationships with some of the best Jumbo Investors in the U.S. Jumbo rates can sometimes be better than Conventional financing… ask me to price out a comparison for you
A jumbo mortgage is any single loan amount over the conforming loan limit set by the Federal Housing Finance Agency, (which is currently set at $424,100 for a one unit property). As a result, unlike conventional mortgages, it is not eligible to be purchased, guaranteed or securitized by Fannie Mae or Freddie Mac. Designed to finance luxury properties and homes in highly competitive local real estate markets, jumbo mortgages come with unique underwriting requirements and tax implications. These guidelines are constantly changing and are usually very specific to the individual borrower and their financial goals.