Louisville KY Jumbo loans are any loans over $417,000. With jumbo loans you typically have to put down 20% or more. Jumbo loan option include 30 and 15 year fixed or 3, 5, 7 year ARMS. Jumbo loans start over $417,000, but can go up to the multi-million dollar range. As the loan amount goes up, the percentage you have to put down goes up.
These loans often require the borrower to have high credit scores and plenty of reserves. The borrower also has to be willing to help us document their income. The stated income options of yesterday are long gone. If you are a business owner, you will now have to provide tax returns to prove income.
Typically Jumbo loans have higher rates than conforming loans under $417,000. This is because jumbo loans carry a lot more risk to lenders. Jumbo loans are associated with luxury homes which can take longer to sell and can be prone to large valuation shifts. Jumbo loans and higher-end homes have come under more scrutiny with the lower market values and the associated difficulties with appraising luxury homes. In the current mortgage environment fewer lenders are offering jumbo loans and super jumbo loans.
So, if you are in the market for a jumbo loan, here are the new rules:
â€¢ A down payment, or, if refinancing, equity, of (usually):
â€¢ At least 20% down for jumbos up to $1 million
â€¢ At least 30% down up to $2 million
â€¢ More for loans over $2 million
â€¢ An excellent credit score (at least 720 but could be more as some banks report that their average jumbo customer has a credit score in the 760s)
â€¢ Income documentation and verification. Borrowers are now required to provide financial records verifying that they earn what they say they earn (some borrowers have been asked to provide two years of their income history).
â€¢ Expect to obtain an adjustable-rate loan; fixed-rate jumbos are relatively rare.
â€¢ DTI (Debt-to-Income) of less than 38 percent. That means a borrowerâ€™s monthly mortgage payment must be less than 38 percent of their income before taxes. The ability to afford to make monthly payments is critical in the jumbo loan market.