Are you in the market for a new home? If you're looking at a home that's more expensive than the average home, a jumbo loan may be exactly what you need. What is a jumbo loan, and what can you buy with one? Here's everything you need to know.
What Is A Jumbo Loan?
Before you even start looking around at new homes, you should know what a jumbo loan is. In the most basic terms, jumbo home loans in Fort Lauderdale are loans that exceed the limitations set by lending authorities, such as Fannie Mae and Freddie Mac. These limitations are in place as the largest amount a lender can borrow under a conventional loan. If you want a more expensive home, a jumbo loan may be the best way to finance it.
Who Can Get A Jumbo Loan?
While a jumbo loan may be the answer to a higher priced home purchase, you should be aware that not everyone can get one. You'll need to meet some strict guidelines in order to be eligible for a jumbo loan. These include:
- A good credit history: You'll need a credit score of at least 700 to qualify for a jumbo loan. Some factors can reduce the required credit score slightly, so it’s best to ask your lender when you're looking into loans to see if you qualify.
- A large down payment: Typically, you'll need around 20% of the mortgage as a down payment on your home. However, sometimes this can also be lower depending on your circumstances. Some lenders even advertise they need as little as 10%. To qualify for a lower down payment, you may need an exceptionally good credit score, strong income, or significant reserve assets. Again, talk to your lender to see what they can do for your specific situation.
- Good income and assets: To buy a home, you'll need to prove that you can afford the payments that are being asked of you when you buy it. A consistent income is best, and if you're self-employed, you'll need to provide the relevant documents to prove your income.
- A low debt to income ratio: A debt to income ratio of around 43% is best if you're looking at a jumbo loan, but that number also isn't hard and fast. For example, you can have a higher ratio if you have significant assets.
If you want to know more, you should talk to a lender about your options. Here at NHL Lending, we'll help you see what your options are when it comes to these non-conforming loans.
What Kind of Property Can You Buy?
There are no restrictions on the kind of property you can buy with a jumbo loan. These loans are just designed for homes and properties that cost more than average. For example, many modern luxury homes have higher prices, thanks to the amenities that you can get with them. Better amenities and homeowner association prices significantly raise the price of a home.
There are also homes situated on larger properties that you may want to buy, but that wouldn't be covered with a regular home loan. If you're a high earner who wants to establish some roots buying a larger property makes a lot of sense. You'll get more space, and more land to play with should you want to make changes in the future. A jumbo loan helps you realize that dream.
Benefits of A Jumbo Loan
There are many benefits when it comes to jumbo loans in Fort Lauderdale? Here are a few that you should be aware of:
- Just one loan: With a jumbo loan, you'll get the amount of money you need all in one go. That means no worrying about taking out multiple loans or juggling different repayments. A jumbo loan contains everything in one package.
- Different rate programs: Just like with regular loans, you'll get different rates on your jumbo loan. You can shop around and find the one that's best for you.
- Get the amount you need: Finally, a jumbo loan allows you to purchase the higher priced home you've been dreaming of.
There are all kinds of uses for a jumbo loan, and if you think this type of loan is right for you, talk to a lender today. Our friendly and professional staff here at NHL Lending can point you in the direction of the loan that will work best for you.