Great Flexibility is Back with Jumbo Loans

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Filed under: Jumbo Loans

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I want to talk about jumbo loans today: these loans pick up where conventional (FHA and VA) lending ends. When conventional loans don’t offer enough for the mortgage you need, a jumbo loan is an option to consider.

Threshold for Jumbo Loans

Nationally, conventional lending goes up to $548,000 regardless of where you live. Then, there are designated high balance counties, like Orange County, LA County, other areas in Washington, etc.

In these counties with higher real estate prices, you can get a loan up to $820,000. That’s known as “conforming high balances.” Above that point is where true jumbo lending comes in.

Guidelines for Jumbo Loans

Each individual lender has their own guidelines for jumbo loans. It can be very different from one lender to the next. When you or a client needs a jumbo loan, it’s essential to work with someone who knows what they are doing.

Also, working with an individual bank can be a bit tricky because they only have 1 set of guidelines. If you don’t match one of these requirements, then you are going to get an automatic “no.”

That’s where it’s nice to work with a team like Franklin Loan Center, because we offer a bunch of options and can find something that’s going to work for your situation.

Jumbo Loans Now (Compared to 2020)

At this time last year, jumbo lending was tight. There were a lot of restrictions at the time: you needed a credit score over 700 and at least 20% – 25% down. Now that things are loosening up and the market is looking good, jumbo lenders are back again.

Common things that we are seeing include oddball properties with higher acreage or a hobby farm. There are ways to make the financing work now. Some lenders won’t touch these types of loans, but we definitely have options available.

We’re finding that lenders are willing to work with things like lower credit scores, higher debt-to-income ratios, or 10% down options. For the most part, jumbo lending is almost back to normal at this point.

At Franklin Loan Center, we have a portfolio project that gives us options to make exceptions in the loan approval process. If you need a jumbo loan or conventional loan, we’re always here to help. Reach out to talk to me about your needs so we can find the mortgage solutions that are right for you.

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