Getting the Home You Want in the Portland Market
A JUMBO loan, by definition, is any loan that exceeds the maximum amount allowed by the two federally backed loan holders, Freddie Mac and Fannie Mae.
These loans can help borrowers with good credit and available resources to purchase larger properties, luxury properties, and properties located in markets with high home prices where a portion of the entire loan amount is coming from another investment firm.
JUMBO loans have been associated with both the housing bubble and the collapse of the housing market in the run up to the Great Recession. However, while JUMBO loans may have played some small part in helping homeowners secure financing for properties with inflated values, they were a means to an end, and not the problem themselves.
Without JUMBO Loan Programs, buying a home in a developed market would be next to impossible for all but the independently wealthy.
How the JUMBO Loan Program Works
The JUMBO Loan program is typically available to individuals who wish to obtain a loan greater than the current Freddie Mac and Fannie Mae maximum of $424,100 for a conforming loan, or $636,150 for properties in specific high price areas of the country.
For more information on limits for multi-unit properties, mortgages in Alaska, Hawaii, or the US Virgin Islands, check the Freddie Mac website. For a list of areas that are subject to the higher limits, check the FHFA website.
JUMBO Loans are similar to Conventional Loans in that the borrower has a variety of options regarding loan term and other variables. However, since the source of the money is different than that of a Conventional Loan, the rules of the loan differ.
Qualifying for a JUMBO Loan From Options Financial
Because the money borrowed under a JUMBO Loan Program does not come from Freddie Mac or Fannie Mae but from another investment firm, loan program guidelines vary depending upon the source of financial aid. Generally speaking, JUMBO loans require a larger down payment than a conventional mortgage.
Qualifying for a JUMBO loan also usually requires a lower debt-to-income ratio, a higher credit score, and higher cash reserves or assets than a conventional loan. In these instances, investment firms tend to be more conservative when it comes to credit and income.
Getting the Most House You Can Afford in the Portland Market
JUMBO Loan Programs are a great tool for prospective homeowners looking to buy property that is a bit outside the normal price range for federally backed lenders. Because the funding comes from elsewhere, the qualifications necessary to obtain the loan as well as the loan term can vary widely.
Generally speaking, JUMBO loans can help buyers with good credit, good debt-to-income ratios, and the necessary assets get into a home for which they otherwise would not be able to obtain financing.