What is a Jumbo Loan?
Jumbo Loans exceed the maximum loan amounts established by Fannie Mae and Freddie Mac conventional loan limits. Rates on jumbo loans are typically higher than conforming loans. Jumbo Loans are typically used to buy more expensive homes and high-end custom construction homes. Typically Jumbo Loans require a higher down payment than traditional loans. Assurance Financial has very competitive rates and down payment options for all Birmingham and Tuscaloosa jumbo loans.
How to use a Jumbo Loan
A Birmingham or Tuscaloosa jumbo loan can be used for either purchasing or refinancing an existing mortgage. Jumbo refinances can help lower payments and reduce the interest rate or consolidate multiple mortgage liens into one.
Jumbo Loan Down Payments
A Birmingham or Tuscaloosa jumbo loan with Assurance Financial can have down payments at 15% of sales price or greater with no mortgage insurance added to the loan payment. The underwriting requirements are generally more detailed than normal conventional loans. There could be a reserve asset requirement that allows the lender to see multiple months mortgage payments available.
Jumbo Loan Requirements
- Income Requirements: Jumbo loans may require a lower debt to income ratio than normal financing. 43% may be a normal estimate for debt to income ratios since it is done case by case referencing credit scores.
- Down Payment: Jumbo loan guidelines with Assurance Financial will require 15% or more on the down payment where interest rates will be higher at 15% compared to 20% down.
- Credit Score: The lowest middle credit score for a jumbo loan with Assurance Financial will be 700.
- Property Requirements: All properties purchased through a Birmingham or Tuscaloosa jumbo loan must meet certain safety and security requirements that are set forth by the guidelines. Generally the cost for the appraisal is higher for jumbo loans and can be held to a much higher standard in underwriting compared to conventional loans.
Working with a Qualified Lender
At Assurance Financial, we are dedicated to assisting our clients with all their Birmingham or Tuscaloosa mortgage needs. If you are purchasing a home or trying to refinance your jumbo loan at a lower rate, we would love to help. Contact me, Ransom Kelly (205-624-0484), today for any questions you may have on any Birmingham or Tuscaloosa jumbo loan.