If you’re thinking of a way to finance your dream home, then getting a jumbo loan in Troy, MI might be a brilliant idea.
This type of loan is typically available for up to $2 to $3 million. Plus, jumbo loan requirements are more relaxed than in the past.
If you want to buy a house that exceeds the limits for a conventional conforming loan and consider taking out a jumbo loan, here’s what you need to know.
A jumbo loan is a type of mortgage used to finance homes that exceed the limits for a conventional conforming loan. This year's maximum amount for a conforming loan is $647,200 for most of the country, as determined by the Federal Housing Finance Agency (FHFA). Home buyers who want to purchase an expensive property may need a jumbo loan to finance their house.
Because jumbo loans exceed the conforming loan limit determined by the FHFA, they are called non-conforming loans by the mortgage industry.
The non-conforming title matters to home buyers. Because they’re classified as non-conforming loans, they’re not eligible to be guaranteed, purchased, or secured by Fannie Mae and Freddie Mac.
Since this type of mortgage isn’t under Fannie Mae and Freddie Mac’s jurisdiction, lenders can set their requirements. Which means guidelines for each lender may vary.
Before you apply for a loan, use our jumbo loan calculator for Michigan to estimate your monthly mortgage payments.
Your DTI must be low when you apply for a jumbo loan because it tells lenders that you have a steady cash flow to cover the monthly mortgage payments. If you make a larger down payment or credit score, you might be able to qualify for a jumbo mortgage with a higher debt-to-income ratio.
Some jumbo loans won’t let you qualify if your DTI ratio exceeds 45%.
Lenders may require your credit score to be higher than 700 and, in some cases, as high as 720 to be eligible for a jumbo loan.
To show lenders that you’re financially responsible, you’ll need extensive documentation, and they usually require more than conforming loans. Be prepared to submit your 2-3 years’ returns, 2-3 years’ W-2 or 1099 statements, bank statements, and information on any investment accounts.
Your chances of getting approved for a jumbo mortgage will be higher if you have ample cash in your bank account. It’s common for lenders to ask their clients to show they have enough cash reserves to cover a year of loan payments.
Jumbo loans have tons of benefits if you choose this mortgage to finance your property. The advantages are listed below:
The first obvious advantage of jumbo mortgages is their higher loan limits. You can use a jumbo loan to purchase a large house in areas where the housing market reflects higher average home prices. For individuals who can’t put down a considerable sum of cash, a jumbo mortgage is necessary to get their dream home.
Even though jumbo mortgages are larger-value loans, the rates offered by lenders can be lower than conventional mortgages. Keep in mind that even a slight rate change can help you save hundreds, if not thousands, in the long run.
Jumbo loans allow you to choose from various loan programs. You could take out a jumbo mortgage with a 30-year fixed rate or even an adjustable rate, giving you more flexibility in your mortgage terms.
Conventional lenders prefer when borrowers make a 20% down payment on a property. If they don’t, they’ll usually make the home buyer get a private mortgage insurance policy, which protects the lender if you stop making payments on your mortgage. Fortunately, for individuals who want to take out a jumbo loan, you often can make a 10 % down payment or even a 5% down payment on the home instead.
If you plan on purchasing a property in a high-price market in Michigan, you’ll need to take out a jumbo mortgage. The good news is jumbo loans are becoming more accessible online and are easier to qualify for now.
If you’re ready to take the next step toward your dream house, contact a mortgage broker from Reliance Financial Group to help you get started.
We've been helping customers afford the home of their dreams for many years and we love what we do.
Company NMLS: 137288
www.nmlsconsumeraccess.org
3501 Rochester Rd
Troy, Michigan 48083
Phone: (248) 687-5250
Hours of Operation: 9:00 AM to 6:00 PM (EST)
info@rfgusa.com
Powered By LenderHomePage.com
Reliance Financial Group Inc strives to ensure that its services are accessible to people with disabilities. Reliance Financial Group Inc has invested a significant amount of resources to help ensure that its website is made easier to use and more accessible for people with disabilities, with the strong belief that every person has the right to live with dignity, equality, comfort and independence.
Reliance Financial Group Inc makes available the UserWay Website Accessibility Widget that is powered by a dedicated accessibility server. The software allows rfgusa.com to improve its compliance with the Web Content Accessibility Guidelines (WCAG 2.1).
Reliance Financial Group Inc accessibility menu can be enabled by clicking the accessibility menu icon that appears on the corner on the page. After triggering the accessibility menu, please wait a moment for the accessibility menu to load in its entirety.
Reliance Financial Group Inc continues its efforts to constantly improve the accessibility of its site and services in the belief that it is our collective moral obligation to allow seamless, accessible and unhindered use also for those of us with disabilities.
Despite our efforts to make all pages and content on Reliance Financial Group Inc website fully accessible, some content may not have yet been fully adapted to the strictest accessibility standards. This may be a result of not having found or identified the most appropriate technological solution.
If you are experiencing difficulty with any content on Reliance Financial Group Inc website or require assistance with any part of our site, please contact us during normal business hours as detailed below and we will be happy to assist.
If you wish to report an accessibility issue, have any questions or need assistance, please contact us by sending an email to: info@rfgusa.com