Jumbo Loan guidelines loosening for qualified borrowers

A strange thing is happening in the Jumbo mortgage market. Guidelines and programs that were almost non-existent less than 2 years ago, are officially back. The limit for conforming loans(Fannie Mae, Freddie Mac) is $417,000 in most of the country, with the exception of High Balance conforming loans which can go up to $625,000 in select counties nationwide. In Florida, a homeowner or Potential homeowner looking to borrow over $417,000, now has several options in the Jumbo Mortgage market. Previously, private wealth banks or Trust banks were the only option for these type of clients. Now, the Jumbo market guidelines have opened up and borrowers have more than a few options, particularly with mortgage brokers who generally must work harder to earn their business than a Mortgage Bank or Federally Chartered bank. Giving potential buyers the opportunity to work with Mortgage Brokers that now have the programs to compete and in most cases, beat what local Banks are offering is a huge benefit to the potential homeowner or existing homeowner.

Several changes to Jumbo guideline qualifications have made obtaining a loan much more feasible. For example, A potential homeowner can borrow up to 80% of the purchase price of the home on a Single Family residence, up to a $2 million loan amount, with a 700 credit score on their Primary Residence.

This also applies for a refinance that does not pull equity out of the home, or a rate and term refinance as it is known. On a second home/vacation home, the potential homeowner or existing homeowner can borrow 70% of the purchase price/appraised value on a purchase or rate/term refinance. The maximum loan amount on this would be $1.5 million with a minimum credit score of 700 as well.

This is just one of many different programs that are now available on the Jumbo mortgage side. Previously, the jumbo market required a minimum down payment of 35% with a minimum credit score of 740. The changes have already lead to a significant spike in volume within the jumbo loan market.

The most important benefit to the lax in Jumbo program guidelines is clearly to the homeowners or potential homeowners who simply didn’t have the option(s) that are most beneficial to them. The national average on a 30 Yr Fixed Jumbo loan is 4.45% as of 6/9/2014. Other loan programs on the jumbo side include the 3 Year, 5 Year, 7 Year , 10 Year and 15 Year ARM.

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