Buying a High-Value Property

Are you interested in buying a luxury home that is being sold at an expensive price, and curious as to what financing options are available to you? If the home you are interested in purchasing is located in a higher-priced area and more costly, you may want to consider using a jumbo loan. If you are interested in buying a deluxe property in Conyers, Georgia, and have questions about the loan options that may be available to you, Preferred Capital Funding can help. Read on to learn more about financing a property with a jumbo loan.

Jumbo Loans: Essential Information

Jumbo loans are considered a type of “non-conforming” loan, meaning that they do not conform to the price limit of a traditional conventional loan. Fannie Mae and Freddie Mac, (which are government-sponsored enterprises that help to regulate the housing market), set a maximum loan limit for conforming conventional loans, which is currently at $647,200, and $970,800 in higher-priced areas. In the event that a borrower needs a mortgage for a higher amount than that, a jumbo loan will be needed in order to finance the home. These types of loans are considered high risk and have strict eligibility requirements since the mortgages are not insured by the government and lenders are not guaranteed repayment if the borrower is unable to pay the loan.

Jumbo Loan Benefits

There are many advantages to obtaining a jumbo loan if you are able to meet the stringent application requirements. Private mortgage insurance costs are not usually required for jumbo loans, and you may be able to get competitive interest rates with the option to refinance for a better mortgage rate later on. Since you are able to take out a loan for such a significant amount with a jumbo loan, you could have the opportunity to buy many different types of properties, including vacation homes, luxury homes, and investment properties.

Jumbo Loan Eligibility Requirements

The eligibility requirements for a jumbo loan are very rigorous because they pose such a high risk for lenders. In order to qualify for a jumbo loan, the typical requirements include:

• Good credit – A score of 720 or higher is ideal
• Low debt-to-income ratio – A DTI of 43% or lower is preferred
• A minimum down payment of 20% is required
• You may be required to pay for more than one home appraisal in order to determine the most accurate value of the property
• You will be required to provide necessary paperwork and documentation to verify your income, assets, and tax information to demonstrate that you are able to afford monthly mortgage payments

If you are interested in purchasing a higher-priced property in Conyers, Georgia, and interested in learning more about your financing options, contact Preferred Capital Funding today for a consultation.