Jumbo Loans

10% Down Jumbo Loan Advantage

As Conforming products continue to tighten, Jumbo Loans are making a comeback!

We offer a Jumbo program that only requires a down payment of 10%… no more first and second mortgage combos. The Jumbo is one loan that we process, underwrite and fund in-house with our staff for excellent efficiency.

This program is only available to a select few branches in Colorado. And, pricing is great!

The basics:

  • One loan to 90% of the purchase price
  • Purchase / Refinance
  • Minimum credit score of 680
  • SFR / Town home / Condo
  • Terms: 30 year, 20 year, 15 year

What is a Jumbo Loan?

A jumbo mortgage, or jumbo loan, is a mortgage loan that exceeds the limits set by the Federal Housing Finance Agency (FHFA.) A jumbo loan is often referred to as a nonconforming loan because they do not adhere to those limitations. Borrowers may be exposed to greater scrutiny because jumbo loans don’t have the guarantees that other options would. A jumbo loan can attract different types of investors or anyone who is not buying your typical mortgage bond.

What are the Conforming Loan Limits?

There are limits that are set on how high a mortgage can be. This is called a conforming loan. These limits are set by Fannie May and Freddie Mac. As mentioned previously, as of 2022 you can only borrow up to $647,200 as of 2022. This various by each state so make sure and check your local guidelines.

Conforming loan limits can go as high as $970,800 in Alaska and Hawaii. These examples the average median price of a home is above the national average. In many other areas, loan limits vary set on a conty-by-county basis.

Are there properties that cost more than the conforming loan limits?

If you are looking to buy a home in one of the most expensive housing markets in the U.S, you’ll most likely need a jumbo loan. In some cases, housing has risen so much that people are turning towards jumbo loans in Denver Colorado to afford even a modest size house. You’re not the only one considering this option.

The demand has risen so lenders are becoming more comfortable offering jumbo mortgages. Get in touch with a member of Sierra Pacific Mortgage today to see what type of loan limits we can offer you. In some cases we may be able to find a solution for you that fits your specific need. We understand the importance of getting the home of your dreams and we want to help be apart of that journey with you.

Jumbo Mortgage Rates Compared To Conforming Loan Rates?

Because of the higher risk, the interest rate of a jumbo loan is going to be higher. However, past and current data suggests that jumbo loans have rates that are very competitive with market rates.

Today’s rates indicate the difference of conforming and nonconforming loans ranges from 0.25% to 1%. You may find that some jumbo loans have rates that are below average to other mortgage loans.

How does a Jumbo Loan Work?

Similar to a conventional mortgage, jumbo loans come in an array of terms and repayment schedules. These can be fixed rate or adjustable-rate loans. Contact Sierra Pacific Mortgage today to see which jumbo loan type we currently offer.

To be clear, jumbo loans work differently than conventional mortgage types. These loans have stricter requirements, your property type must also meet certain specifications, credit score, down payment and debt to income ration requirements to receive one.

Property Types

Because there are no government restrictions on how you can use this loan, you can buy various types of properties. You just have to meet the lenders other requirements, basically you can use jumbo loan mortgages for primary residences, vacations house or investment properties.

Down Payment

Jumbo loans will more than likely have a must higher down payment requirement when compared to conforming loans. For a single-family unit, you may find that a lender will require 20% down on a jumbo loan for single family units. Second homes will also require a higher down payment as well as multi-family units. The final down payment requirement is based on your credit score and loan amount.

Sierra Pacific Mortgage offers a jumbo loan option for you and your family. Call us today and speak with a representative to find out out the best options for a jumbo loan in Colorado.

Credit Score

A big notifier in determining getting a jumbo loan mortgage is your credit. Your credit score is the numerical value of how well you stand as a borrower. The score you have may sit on a range from 300 to 850 and many factors determine this score.

Some of the minimum credit scores that you will need are:

  • 700, to receive a jumbo loan for a one- or two-unit property with a loan limit of up to $1 million.
  • 720, for loans between $1 million and $1.5 million
  • 740, for anything between $1.5 million and $2 million
  • If your planning on buying a second home, 720 and 760 depending on the size of the loan

For a primary residence, vacation home or investment property a 680 Fico score and up is the standard for acquiring a Jumbo Smart Loan. in certain situations, a score of 760 may be required, depending on the type of property and what you plan on doing with it.

Debt-To-Income Ratio (DTI)

Debt to income ratio is a term that might sound confusing at first but in theory its actually pretty simple. So what is debt to income ratio? This metric compares the amount of money you earn versus how much debt you have accumulated in total. If you divide all of your required minimum monthly payments by the amount you earn before taxes, you get your DTI ratio.

An example of this would be, if you pay $1,000 a month in bills and you bring home $2,000 per month before taxes, your DTI ratio is 50%.

Having a low DTI ratio is a good thing when your applying for a jumbo loan. It notifies lenders that you have enough income to cover your mortgage payments. A larger down payment or credit score will help you qualify for a jumbo loan with a larger DTI ratio.

Call Sierra Pacific Mortgage today and ask about what DTI percent you need in order to qualify today

 


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Sierra Pacific Mortgage NMLS# 1788. Michael Shotnik NMLS: 218281, CO License: 100017466. Not licensed in Alaska or New York.  To check license status of mortgage loan originator, visit D.O.R.A. and NMLS consumer access.