Thinking of going for a jumbo loan? There are a number of important considerations that you need to take into account prior to your application. Note that taking out a jumbo loan is a big decision to make. With higher the loan amounts come with higher monthly payments to deal with.
To give you some useful insights about whether or not jumbo loans, Irvine, CA, are right for you, we have shared below some questions to ask yourself for assessment.
Consider the following:
Is jumbo loan right for me?
The truth is, jumbo loans are not made for everybody. They are outside the limits of the size of loans that Fannie Mae and Freddie set. In other words, they are not “conforming loans”. This type of loan is not designed to help buyers stretch the limits of how much they can borrow. Instead, it is designed to help financially secure buyers invest in home that are pricier than average.
Am I prepared to meet the stricter qualifying requirements?
It is important to note that jumbo loans, Irvine, CA, are not guaranteed by Fannie Mae and Freddie Mac, which means they are perceived as riskier than conforming loans by lenders. More risks mean stricker requirement on jumbo loans.
Here’s a list of some items that you need to take into account:
- Credit score – Jumbo loans require a minimum score of 680
- Debt-to-income ratio – The sum of all your debt divided by your gross monthly income; this is used to scrutinize your capacity to pay back loan
- Loan-to-value ratio – The amount you borrow compared to how much your home is worth
Does this payment obligation work in my budget?
Always ask yourself this: Can I afford it? To find out what your monthly payment will look like, use a reliable mortgage calculator. You need to figure out the number and do what the number tells you. If the monthly payment does not make you comfortable, then it makes sense to reconsider your decision to go for a jumbo loan.
Want to know whether or not jumbo loans, Irvine, CA, are right for you? Talk to an expert at HomePlus Mortgage today.
Call us at (619) 325-8282.