Your Complete Guide to the JUMBO Home Loan
- SECTION 1What is a JUMBO Loan?
- SECTION 2Am I Eligible for a JUMBO Loan?
- SECTION 3JUMBO Loan Benefits
- SECTION 4JUMBO Loan Rates
- SECTION 5First-Time Homebuyers
- SECTION 6JUMBO Jumbo Loans
- SECTION 7Refinancing with a JUMBO Loan
- SECTION 8Contract Guidelines
- SECTION 9The JUMBO Loan Process
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What is a Jumbo Loan?
Video: The Jumbo Loan Process
A Jumbo home loan is one that is through private investors like insurance companies, big banks, and private funds. Jumbo home loans have been streamlined through the years to provide access to the mortgage market for all types of buyers; first time home buyers, first time move up buyers, and investors. A jumbo home loan is a large sum of money lent to a borrower by a mortgage lender. Jumbo home loans often have higher lending requirements and qualifications but in return you are able to purchase in the luxury market price ranges. When a prospective homeowner is ready to shop around for a mortgage, they will work with their Orbit Home Loan mortgage broker. This is a financial professional who brings together borrowers and lenders. They are not lenders and, as such, do not use their own funds to advance mortgage loans. Instead, they act as intermediaries, helping consumers comparison shop, bringing them a variety of quotes from different lenders at one time.
If you're ready to start your Jumbo loan, check your eligibility or have specific questions on the Jumbo loan, talk with a Orbit Home Loans specialist today.
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How Do Jumbo Loans Work?
Jumbo home loans work like this: Your Orbit Home Loan mortgage broker (Mortgage Banker) works on your behalf to qualify you with the most competitive lenders in the nation. Jumbo home loans are typically lent out with 15 or 30 year repayment periods; the one that’s right for you depends on your personal finances, your income, and the interest rate you can secure. Once you are qualified, completed the process and have purchased the property your lender will sell your loan to a private investor fund. That investment group will either service your loan or they will have your loan serviced by a servicing company. It is important to remember that you payments includes your promise to pay back the lender with interest.
Interest is the percentage rate you pay to the investors for the trouble of lending you money. This is how the they makes money from having lent you such a large sum. Interest rates are either fixed or adjustable and interest rates normally adjust daily but can adjust multiple times a day. The interest rate you receive on a conventional loan will also vary based on your own personal financial profile.
Types of JUMBO Loans (PAUL)
1. Non-Qualified Mortgage (Non-QM) Jumbo
2. VA Jumbo ( Has to do with the cost of living index)
3. Low-Down Payment Jumbo
Exploring The Jumbo Loan
JUMBO Purchase Loan
A Jumbo loan is a type of financing that exceeds the limits set by the Federal Housing Finance Agency and cannot be purchased, guaranteed, or securitized by Fannie Mae or Freddie Mac. Homeowners must undergo more rigorous credit requirements than those applying for a conventional loan. Policies and guidelines can Jumbo loans vary by lender. Some lenders may not make all of these types of Jumbo purchase loans.
Jumbo Cash-Out Refinance
The Jumbo Cash-Out refinance allows qualified homeowners to refinance their mortgage and take out cash from their home's equity. These loans are open to Qualified borrowers with and without current conventional loans. Qualified homeowners can typically refinance up to 90 percent of their home's conventional value. Lending guidelines and loan-to-conventional value requirements can vary by lender. Homeowners are not required to take out cash with these loans, which means Qualified borrowers with non-conventional mortgages can use this option as a basic rate-and-term refinance.
You can change your loan's term or interest structure or take cash out of your equity with a cash-out refinance. Remember that not every lender offers a Jumbo loan refinance and might have limits on the principal balance they'll refinance. Lending guidelines and JUMBO loan requirements can vary by lender. Homeowners are not required to take out cash with these loans, which means borrowers with non-Jumbo mortgages can use this option as a basic rate-and-term refinance.
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Jumbo Loan Limits
A Jumbo mortgage is a home loan for an amount that exceeds conforming loan limits established by the federal housing finance agency. The conventional loan limit in many California counties is $647,200. However, in select California counties such as Sacramento County, the maximum conventional loan limit is $675,050.
What is the Jumbo funding fee?
No funding fee
Is the Jumbo loan a good option?
Jumbo loans are arguably the most powerful loan option on the market if you need to get into a property above the conforming loan limit. Every buyer's situation is different and going over all your loan options with a home loan specialist can help ensure you make the best financial decision possible.
How do I get a Jumbo Loan?
Talk with a trusted lender that knows Jumbo loans and how to get the most from this hard-earned benefit. The process typically starts with getting preapproved, which can often be done in minutes using your phone, laptop or tablet.
Loan preapproval is a key first step before making an offer on your dream home. Having that preapproval letter gives you a clear sense of your buying power and shows sellers and listing agents you have what it takes to get to closing.
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If I’ve Previously Used a Conventional loan, can I use it again?
Yes, this is not a one-time option. Once you use the conventional loan benefit, it's yours for life. You can reuse the conventional loan over and over again, and it's even possible to have more than one active conventional loan at the same time.
Continue to learn more about Jumno loan in our next section.