Jumbo Loans for High-Value Homes
Are you looking to invest in or to own a high-value home in New Jersey? Then you may need a jumbo loan to obtain your dream home. Also known as a nonconforming loan, this privately insured, privately funded mortgage has a high ceiling. A jumbo loan can exceed limits set by government-sponsored entities (GSEs) like Fannie Mae and Freddie Mac. Though the mortgage may be high, you can still get a great rate and term. You will want to compare quotes from several different national lenders. Dream Home by Bob is here to show you what makes jumbo loans so helpful when you look at a New Jersey home in the great areas of Aberdeen, Middlesex, Monmouth, or Ocean County. Read on below for more details.
Jumbo Loans are Conventional Loans
Jumbo loans are a type of conventional financing; that is, they are not secured by a government agency of any sort. Nonconventional loans, in contrast, are backed by agencies like the Federal Housing Administration, U.S. Department of agriculture, or the U.S. Department of Veteran’s Affair. While nonconventional loans like these have several benefits for borrowers, they’re typically not suited for the purchase of high-value homes.
Different Types of Jumbo Loans
A jumbo loan is a conventional loan. As discussed, there are two main types of conventional loan: conforming and nonconforming. Jumbo loans are nonconforming conventional loans., because they exceed GSE limits, while conforming loans do not. This can all seem confusing when buying a home. One main way to tell the difference between conforming and jumbo loans is that GSEs purchase conforming loans from private lenders and repackage them on the secondary market, while nonconforming loans stay on the private lenders’ own books. Many of these mainstream financial institutions may not purchase a high-value loan because they fear creating too much risk. In some cases, they’re riskier for lenders to keep on the books. All this means is that the approval requirements for jumbo loans may be a bit more intense than they are for conforming conventional loans.
Qualifying for a Jumbo Loan
Private lenders ultimately determine who is and isn’t approved for each jumbo loan. These loans are usually reserved for candidates with great credit scores, proof of steady income, a low debt-to-income ratio and a good amount of savings (in addition to down payment funds). Typically, you’ll need to put down at least 20% to be eligible for these high-cost loans.
Find Your Next Dream Home with Bob
That high value dream home may be more obtainable than you think. Dream Home by Bob is here to show you what makes jumbo loans so helpful when you look at a New Jersey home in the great areas of Aberdeen, Middlesex, Monmouth, or Ocean County. Reach out today for more details or click here to get started!