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  • FinanceByDoug

What is a Jumbo Loan:

Jumbo loans let you borrow more than the conventional loan limit for your area -- $484,350, or $726,525 for high-cost areas -- in order to purchase a home that’s priced above average. Although Jumbo loans let you finance more, they have stricter requirements as a means of risk management for the lender.


Programs:


Alternatives:

  • Buy in cash.

  • Veterans and other eligible borrowers can obtain VA loans beyond conventional limits unless the borrower is doing a 0% down mortgage. When a down payment is provided, VA loans do not have a set limit. (Positive changes coming in early 2020 for VA loans.)

  • Conventional High Balance loan limit for single-family is $726,525 and for a 2 family $930,300. Maximum DTI is 43% and 2 years tax returns required.

Good options are limited when it comes to mortgage loans on high-priced homes, which is a blessing in disguise. Jumbo loan guidelines prevent borrowers from purchasing more house than they can afford.


Other Notes:

The Tax Cuts and Jobs Act of 2017 decreased the amount of debt from which mortgage interest could be deducted, from $1million to $750,000 (the House bill had it reduced to $500,000). Given that personal deductions were increased and that borrowers considering Jumbo loans have a good-sized savings, this shouldn’t weigh too heavily on the mind of the borrower.





Disclaimer:

Rates, regulations, and loan conditions can and do change. The information presented in this article was accurate, to the writer’s knowledge, as of 11/20/2019.Consult your Sovereign Mortgage Investments Inc. advisor to see if rates, regulations, and loan conditions have changed.


  • FinanceByDoug

Updated: Nov 21, 2019

FHA loans - named after the government institution that insures them, the Federal Housing Administration - are one of the more commonly used loan programs among US home-buyers today. By providing opportunities for borrowers who otherwise would not have a home loan option, it has become a standard for buyers in need of a low down payment or those with less-than-average credit. The FHA loan requires just 3.5% down with a credit score of at least 580, and allows borrowers to use “gift” funds to pay for the entire down payment.


In today’s housing market, where many first-time home-buyers have significant student loan debt, it is no wonder why people are turning more towards low-down options. However, the lower credit and down payment requirements are offset by additional premiums not included with conventional home loans. A 1.75% Upfront Mortgage Insurance Premium (paid at closing) and annual 0.45% to 1.05% Mortgage Insurance Premium (MIP) are both included on FHA loans. Unlike the conventional loan's Private Mortgage Insurance, which is automatically canceled at 78% loan-to-value (LTV) , FHA loans include a MIP throughout the life of the loan.



Weigh the benefits and drawbacks with consideration to your personal financial situation. Is now the right time to buy? Would it make more sense to wait and save for a larger down payment to avoid additional fees?

When you’re ready, give us a call. We’d be to discuss your options with you.




Sources:

https://www.fha.com/lending_limits

https://www.fha.com/fha_loan_requirements

Disclaimer:

Rates, regulations, and loan conditions can and do change. The information presented in this article was accurate, to the writer’s knowledge, as of 9/12/2019.Consult your Sovereign Mortgage Investments Inc. advisor to see if rates, regulations, and loan conditions have changed.

  • FinanceByDoug

Updated: Nov 21, 2019

Like the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) introduced 3% down programs to compete with FHA loans. The Home Possible and Home Possible Advantage programs make home ownership more affordable for first-time and modest-income borrowers by reducing the down-payment required to 3%.


For borrowers whose income does not exceed to NEW 2019 LIMIT of 80% median area income (MAI), the Home Possible loan programs offer a great opportunity to begin the home-ownership journey.



Are you an aspiring new homeowner that meets the Freddie Mac 3% down requirements? Let's talk about which option fits into your financial goals.



Douglas Kennell

NMLS #364758

Sovereign Mortgage Investments, Inc.

NMLS #222681



Sources:

www.freddiemac.com/singlefamily/factsheets/sell/pdf/home_possible_97_572.pdf

sf.freddiemac.com/working-with-us/origination-underwriting/mortgage-products/home-possible

Disclaimer:

Rates, regulations, and loan conditions can and do change. The information presented in this article was accurate, to the writer’s knowledge, as of 8/30/2019. Consult your Sovereign Mortgage Investments Inc, adviser to see if rates, regulations, and loan conditions have changed.

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