In high housing cost areas, jumbo mortgages may be the only residential financing available for home purchases or refinances.

This is because conventional mortgage sources- Fannie Mae, Freddie Mac, FHA and VA—cannot go over preset mortgage amounts. The standard maximum mortgage amount is $484,350. There are exceptions in certain high cost housing areas, such as Northern Virginia. These exceptions are $535,900 and $726,525 in the state of Virginia.

If the mortgage amount will exceed these limits, jumbo loans are the only alternative financing source. In the past, jumbo loans had terms that were inferior to those of conventional sources. Either rates were higher, or maximums were lower ( ie., lower credit scores, lower loan-to-value, lower debt-to-income ratio). But, in recent years, these discrepancies have significantly lessened.

Jumbo loans are also called non-QM mortgages, meaning they do not fall within the definition and eligibility of a federal Qualified Mortgage ( which applies to the conventional mortgage sources.)

The biggest negative of non-QM mortgages is that there is no standard list of eligibility requirements for the various lenders. There are as many individual standards as there are non-QM mortgage lenders. The diligent mortgage seeker must search many lenders to find the product that best suits his needs.

This becomes especially difficult when the mortgage seeker has less than perfect credit. Most lenders set credit score minimums at 720. But, there are some that go down to 600. Unfortunately, as the credit score requirement lessens, so does the maximum mortgage amount. Or, the maximum loan to value ( 90% to 80%, for instance.)

Researching the jumbo mortgage market is a daunting task. All Credit Mortgage, as a broker, has done the research and has relationships with the most favorable non-QM lenders. We can take your application to them and get you the best execution.

Here are examples of jumbo loans for fair credit scores:

600-620           85% LTV           $1.5 MM

620-680           85% LTV           $2.0 MM

680-720           90% LTV           $2.5 MM

720 over          95% LTV           $2.5 MM

Rates and costs for these loans are comparable to conventional mortgages, and none of them require mortgage insurance.

Contact our loan officers if you have any questions.

All Credits Mortgage Inc.