Are you planning to apply for jumbo loans, Orange County, CA? While the market may present great deals, the chances are that you will have to go through stricter requirements to obtain one. The surge in numbers of applications even in this time of COVID-19 pandemic, which pulls the interest rates at an all-time low, is the main factor for this market trend. If you want to get a great deal, it makes sense that you do your homework.
But what are jumbo loans, Orange County, CA? In simplest words, these are loans that exceed the loan limits set by Fannie Mae and Freddie Mac, which are both government-sponsored enterprises in the US.
As part of doing your homework, here are some facts that you need to know, which you can use in making decisions when applying for jumbo loans in California.
The median value of a home in California is more than double the median value in the US as a whole
Jumbo loans are not backed by federal agencies, which means lenders are taking on more risk when they offer them – unlike the conventional mortgages.
Some counties in California have higher jumbo loan limits than others because of the high cost of the average homes in certain areas. San Francisco, for instance, has conventional limits of up to US 765,600 due to higher home values.
Lenders may require your FICO score to be 700 higher to qualify for a jumbo loan.
Lenders also consider the debt-to-income ratio to assess whether or not you are over-leveraged. But some lenders have a hard cap of 44% DTI, however.
Lenders are more likely to approve your jumbo loan applications if you have ample cash in the bank.
Take note also that you need to prepare extensive documentation to prove your financial health. For instance, you should be ready to provide your full tax returns, bank statements, investment accounts, among others.
Some lenders may require a second home appraisal for the prospective property you’re planning to purchase.
To increase your chances of getting great deals on jumbo loans, Orange County, CA, work with an expert here at HomePlus. Please call 800-810-PLUS (7587).