Have you been shopping around for a mortgage loan for your Fishers, IN home? You may have come across the term jumbo loan and wondered what exactly that is. Jumbo loans come into play when the property cost exceeds the mortgage conforming limit. Basically, loans starting from $417,000 – $625,501, depending on what part of the country the property is in. If you are planning on buying a higher priced property, a jumbo loan is a viable option, but, qualifying for it is tougher than with a traditional mortgage. Here are key factors in qualifying for a jumbo loan.
Income. Because jumbo loans have more scrutiny than conventional loans you will need to be able to prove you have the income and liquid reserves to cover the payments on your new Fishers, IN home. Traditional borrowers will need pay stubs dating back 30 days and W2 forms from two years back. If you are self-employed you will need to show further verification such as tax returns and bank statements as well as 6 months reserve of the new mortgage payments.
Debt-to-Income Limits. Since many jumbo loans are qualified mortgages your debt-to-income ratio cannot exceed 43%. If your debts put you over that limit you can still apply for a non-qualified mortgage.
Credit Scores. Because of the higher dollar value of jumbo loans, credit score requirements are higher. You will need at least a 680 credit score to qualify for most jumbo loans. Since all lenders set their own credit score requirements some lenders may require a higher score for approval.
Documentation. With qualified mortgages come increased need for documentation. When you apply you will need to provide documentation to back up any claims you made, including, but not limited to, the following: proof of income, proof of liquid assets, documentation on other loans you hold, and proof of ownership of non-liquid assets such as other owned properties.
Down Payment. While it may be tougher to apply for a jumbo loan, many have one thing to look forward to: lower down payments. In today’s mortgage climate 10% is usually sufficient with good credit.
When you are ready to buy a home in Fishers, IN, contact an experienced Fishers, IN real estate agent. We are committed to providing you with the highest quality buyer service. When making the type of investment that buying a home requires, you deserve to have all the latest market information and the very best advice, both of which we can provide you with. We hope to speak with you soon!
Rodney & Amanda Heard
Heard Real Estate Team