Jumbo mortgage options have recently expanded in Pittsburgh – Allegheny County over the last few years. The new programs today include low down payment financing structures with only 10% and 5% down for approved home buyers. In addition, the programs are not limited to only Jumbo purchase transactions, but also include rate-term refinance. Like all mortgages today, whether it be an FHA or Conventional loan, Jumbo programs have minimum qualifying standards that must be met in order to qualify. Below we will discuss the core requirements needed to obtain approval, home buyers that have questions can learn more by visiting www.JumboMortgageSource.com or simply call ph: 800-962-0677
First off it’s important to understand exactly what is considered a “Jumbo” loan. In Pennsylvania, a Jumbo mortgage is any loan amount that exceeds that maximum conforming loan limit which is currently $484,350. The only exception to this would be the one high-cost location in PA, Pike County. Please see the complete 2018 Loan Limits chart below for Conventional, FHA, VA, and high balance locations.
*FHA floor nationally is set at 65% of the conforming loan limit and can vary by county. VA limits the amount of guarantee for a zero down loan at the conforming loan limit. Jumbo VA loans above these limits require a down payment of 25% of the difference between the conforming limit and the sales price. USDA loans do not have a loan limit but limit the household income.
** High-cost limits for areas in which 115% of the local median home value exceeds the baseline conforming loan limit. The maximum limit is 150% of the conforming loan limit. Limits can be higher in Hawaii, Alaska, Guam and the U.S. Virgin Islands.
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Loan Limits and Credit Score Requirments:
Please note all the following requirements apply strictly to primary owner-occupied properties.
- 95% Financing: Loan amount cap – $2,000,000. 700 min credit score.
- 90% Financing: Loan amount cap – $3,000,000. 680 min credit score when financing below $1.5m. 700 credit for $1.5- $2.0m. 720+ credit for loan amounts that exceed $2,000,000
- 85% – 80% Financing: Loan amount cap – $3,500,000. Min credit scores will vary depending on loan amount.
- The minimum credit score listed does not guarantee loan approval. Borrowers with any past financial hardships (previous six years) like bankruptcy, foreclosures or short sales could have additional waiting periods regardless of credit score.
- All the loan programs will require mortgage payment “reserves” from the borrower. Reserves are the amount of savings a borrower has after the down payment and closing costs have been paid. The exact amount of reserves will depend on many variables like credit, down payment and overall loan amount. Borrowers financing 95% should plan on a minimum of 3-6 months of payment reserves. Higher loan amounts exceeding 2mil should plan on 9+ months payment reserves. The payment reserve requirements can be satisfied by non-liquid retirements accounts like 401K, or IRA.
- Borrowers require financing for investment properties do have financing options with greater down payment of 20%.
Approval & Documentation Requirements:
- Whether you are financing 80% or 95% all the Jumbo programs will require complete income and asset documentation. Just like any other mortgage, this includes (2) years tax returns, pay stubs and W2’s in the case of regularly employed borrowers. Asset documentation should include previous bank statements and most recent quarterly retirements statements.
- Borrowers should have a minimum two-year employment history. This applies to both regularly employed and self-employed buyers.
- Eligible properties include regular single family homes, condos, and townhomes. New construction is permitted when the home is initially built and financed by the builder – new spec home for example. Construction- permanent financing is not permitted. Vacant land, acreage is also not permitted.
Jumbo Loan Benefits:
- No mortgage insurance cost (PMI) with all programs. Loans are most commonly executed in a combo structure to avoid PMI. This includes 80/10 piggyback loans for 90% financing and 80-15 piggyback loans for 95% financing.
- All common fix rate and adjustable rate terms available – 30-year fix, 15 fix, 5/1 ARM, 7/1 ARM, 10/1 ARM.
- All loans are standard principal and interest amortization.
- Closings in as little as two weeks.
Please contact Jumbo Mortgage Source to learn more, they serve home buyers nationwide 7 days a week.