What is a Scottsdale Jumbo Home Loan?
Are you purchasing a luxury home that exceeds $647,200 in Arizona? Did you know that you cannot finance the purchase with a conventional loan? If you are not prepared to pay for the home in cash up front, then you must find a way to finance the purchase. But no need to fret. You have options. There is a type of loan available for situations such as this known as a Jumbo Loan.
What is a Jumbo Loan?
A jumbo loan, or jumbo mortgage, is a special type of loan designed for home purchases that exceed the conforming loan limit set by Fannie Mae and Freddie Mac. Loans that exceed the set amount are a higher risk for the bank to guarantee; therefore, these types of loans have different rates and terms.
Jumbo loans typically have higher credit score requirements and stricter debt-to-income ratio requirements. This is to ensure that the borrower is suited to repay the loan. Additionally, jumbo loan rates are typically higher interest rates. Though, you can typically finance with a fixed rate or an adjustable rate, depending on your loan amount.
Other differences with a jumbo loan include larger down payments and higher closing costs and fees due to the extra steps for qualifying.
Do I Qualify for a Jumbo Loan?
Home buyers who wish to qualify for a jumbo loan must typically have at least a 700 credit score. Regarding debt-to-income rates, most lenders have a strict cap at 45%, though this is adjustable if you have cash reserves on hand
To qualify for a jumbo loan to purchase a home with a higher price point, there are also stricter requirements when it comes to assessing your financial health. For instance, you will be asked to produce documentation such as tax returns, W-2s, 1099s, investments, and more to prove that you are a safe risk.
Phoenix Home Loans for your Jumbo Loan
Our Highly Motivated Vercellino Team has assisted many families over many years with their jumbo home loan needs. Whether you are looking to compare mortgage rates, find an adjustable rate mortgage, or find a financing solution with a smaller downpayment, we can help. When you are looking for a jumbo home loan in Scottsdale, PHX Home Loans is the go-to mortgage lender.
Call us today to see how we can help you with your jumbo home loan.