Jumbo mortgages are a type of home loan that exceed the conforming loan limits that were established by regulation. The limit for the majority of jumbo loans in the United States is $417,000 with the limit in higher cost areas being $625,500.
Nationwide changes have determined how jumbo loans in Fort Lauderdale are handled after the global financial crisis that occurred in 2007-08. The lax lending practices in the intervening years were allowing borrowers to take out jumbo loans with minimal down payments and without income verification. The lenders at this time were engaged in fierce competition to attract clients and those who were the lowest bidder emerged as the winner.
The increasing number of jumbo loans meant buyers were being approved for large home purchases they couldn’t afford causing the prices of houses to skyrocket as the demand continued to climb. The prices came crashing down eventually when borrowers were unable to repay the jumbo loans they had taken out.
How is the Market for Jumbo Loans Today?
Since the financial crisis in 2007-08, the market has stabilized and stricter underwriting has been put in place to ensure borrowers don’t have such easy access to jumbo loans in Fort Lauderdale. There’s even a return down payment requirement of 20% in most cases to even start the process for qualifying for a jumbo loan.
Being able to obtain a jumbo loan is difficult in today’s market with only the largest brand-name banks providing the service. This puts customers in a difficult position since they have to sacrifice personal accessibility and service with a company handling the investment which exceeds at least half a million dollars. Here at Nationwide Home loans, we service jumbo loans for our clients while maintaining the personal attention and quality of service you deserve to have from your lender. We work alongside you to ensure you understand every facet of having a Fort Lauderdale jumbo home loan.
How Do You Start the Process of Qualifying for a Jumbo Loan?
The conforming limit for jumbo loans vary depending on the geographic location. The standard for the majority of housing markets is $417,00, but in higher prices areas like Los Angeles, the limit can easily exceed $700,000. Due to the nature of scrutiny that comes with jumbo loans, applicants will have to be prepared to provide certain proof and information to qualify for one.
Applicants will have to be prepared to provide the 20% down payment to gain approval for a jumbo loan in Fort Lauderdale. Jumbo loans being used to refinance an already existing home, the equity in the house must equal at least 20% of the mortgage amount. Income documentation will also need to be provided and the monthly mortgage payment cannot exceed 38% of the borrower’s pre-tax income.
When shopping around for a lender who offers a jumbo loan, most borrowers will find these loans are offered on adjustable rate interests instead of fixed rate interests. The interest rates are favorable for the borrower, but they rise over time to keep pace with the interest payments issued to bank depositors.
What Happens if You Don’t Qualify for a Jumbo Loan?
Here at Nationwide Home Loans, we understand not everyone may qualify for a jumbo loan in Fort Lauderdale. These large loans require at least a 20% down payment or if you’re refinancing a home, there has to be at least 20% equity in the home to account for the mortgage amount. When faced with such a hefty upfront cost, we understand it can be disconcerting for potential borrowers who feel they may never be able to purchase a home.
Our portfolio is filled with a variety of loans to fit any financial situation and we’re here to help you every step of the way. From the application process to figuring out the ideal option to fit your budget, we believe in providing the information our clients need in the clearest terms so they can make the best decision for their financial future.
One of the challenges of purchasing a home for the first time is having to sink at least a 20% down payment into it upfront. Many homeowners have sunk their lifesavings into their home which puts them at risk or they’re unable to afford the upfront costs.
We are proud to say we’re a Federal Housing Administration loan provider who has helped thousands of low to moderate income Americans each year have access to the credit they need and reducing the short term cash demands often associated with closing costs and down payments. We also have Veterans Affairs loans available backed by the federal government which extends favorable interest rates to service men and women which aids in reducing those upfront costs.
We look forward to hearing from you soon. Please feel free to call us if you have any questions about our services.