In addition to government and traditional home loans, we at Pacific Union Financial also offer what’s known as a Jumbo loan, or a Jumbo mortgage. These are mortgages that exceed the limits set by Fannie Mae and Freddie Mac, which is currently $424,100 in most markets.
Pacific Union Financial offers Jumbo loans up to $3 million, so if you want to upgrade your home or move to a high-value market, like San Francisco or Washington D.C., this could be the loan for you. However, there are still guidelines to follow.
Rates and Down Payments for Jumbo Loans
Jumbo loan rates used to be much higher than traditional mortgages. Current interest rates are more comparable to traditional home loans, and in some cases lower. Jumbo loans have also typically required 30% down; however, the down payment requirements today are often in the 10-15% range. For comparison, traditional home loans often require 20% down. It’s also important to note that most Jumbo loans are adjustable-rate mortgages, so you should either be prepared for rate changes later on down the line, or shop around for other mortgage options.
Credit Score and DTI
As you might expect, you need a shining credit score to qualify for a Jumbo loan – typically above a 720, but some lenders require a score as high as 760. You should also have a debt-to-income (DTI) ratio of 43% or less. This shows the lender you are less of a credit risk and more financially capable of paying back a Jumbo mortgage.
If you currently own a home, then you already know about how you can deduct the interest you paid on your mortgage. The same applies for Jumbo loans, but it’s a little different. You can claim a tax deduction, but only up to the interest paid on the first $1 million. Remember, you should always consult your tax advisor for advice on your unique financial situation.
We’re Here to Make Mortgage Easy
We know there are a lot of rules and stipulations in place when it comes to getting a Jumbo loan, which is why we’re here to help make it easy. If you have any questions, concerns, or if you’re interested in getting a Jumbo loan, contact us today! Our team is ready to share our knowledge and expertise to help you get the home of your dreams.