Texas Jumbo Home Loans

What are Jumbo Home Loans?

Jumbo home loans offer a very unique opportunity for buyers who are looking for a luxury home or looking to refinance an existing large mortgage. Due to the large amount you’re able to barrow, Jumbo Home Loans have stricter lending requirements than other options, but it can still be just as affordable in comparison. In many cases, you can qualify for a Jumbo Loan with as little as 10-15% down.

What are the Pros and Cons?

Pros

Allows for a larger loan amount and in some cases, a better interest rate. As well as, some creative options to use as a 2nd mortgage.


If you have a higher income, and have a solid financial history/credit score and a large down payment this may be the home loan for you.


Having a good credit score, higher than 660 will more than likely qualify you and have a lower down payment


You can typically get a Jumbo Loan with as little as 10% down in you have a credit score that is higher than 720.


The total amount you want to finance for, your credit score, and your down payment will play a huge role in whether you get financing. This is where FPS Lending thrives at finding and giving you access to specialty Jumbo lenders to get you the perfect loan.

Cons

Is not guaranteed by the Federal Housing Administration or the Department of Veteran Affairs.


It can be tough qualifying for a Jumbo Loan. You typically need good credit and very good financial standings to qualify.


If you have a credit score that is below 660 you will likely have to put much more down in order to quality.


You will more than likely need at least 6 months worth of mortgage payments in an account.


If you need a loan that’s more than $5 million you may have to look for a portfolio lender that can offer super Jumbo Home Loans. Be sure to consult with your Texas Mortgage Lender for your best options.


What are the next steps when you get pre-approved?

Here are a few requirements you have to meet for a Jumbo Mortgage:

  • You need to be with the same employer for at least two years
  • You need consistent income over the past two years or income that’s trending upwards
  • If you have a previous bankruptcy, you’re required to have at least four years from a chapter 13 and six years from a chapter 7. As well as, a good credit record without any issues since then
  • You’ll need a mortgage payment that is equal to about 43% of your gross revenue or less based on what the purchase price of the home is, your monthly bills, income, and other debts

How long will you need to wait for the loan to be approved?

You can usually expect to wait about 7-10 business days. If there’s a need for more information or documentation to validate the accuracy of the approval, it can cause delays. The faster you’re able to provide accurate information, the shorted you’ll have to wait. The lender reviewing your information will request an appraisal of the home, your credit report, and verification of employment and finances.


What do you need to set aside for your down payment?

A 20% down payment is common for a Jumbo Loan, so you should expect this. Keep in mind that your Texas Mortgage Advisor will help you determine what you total upfront costs will be, so be sure to consider down payment, closing costs, appraisal fees, and home inspection fees. In some cases, if you have excellent credit, and strong financials you could put down as low as 10-15%.


What kind of interest rate and Annual Percentage Rate can I expect?

Remember to keep in mind that Jumbo Loan interest rates are typically the same as a conventional loan. This mean’s that even though you are borrowing substantially more, there are still low rates available to you. APR (Annual Percentage Rate), is the total cost of the ownership of your home and will always be unique to each situation. This is why you need to consult with your Texas Mortgage Advisor to help you work with the numbers.

There isn’t a set number. The APR is determined through the total amount you are borrowing, with all of the closing fees, and spreading it out through the length of the loan. This is the actual cost of your loan, including the interest you are expected to pay over the period of your loan; which is typically 30 years for a Jumbo Loan or a Super Jumbo Loan. This is added up and then broken own to give you a rate as a percentage.


Will I get penalized if I pay off my mortgage early?

Make sure to check with your lender to insure there will not be a penalty for paying your loan off early. Don’t get caught having to pay penalties on your loan for paying early. The FPS Lending team believes that no loan should have a penalty for paying it off early.

*Not all borrowers will qualify, credit approval is required

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