Killeen Jumbo Home Loans

If you want to purchase a home in Killeen priced above the standard limit for conforming loans, you will need to apply for a Jumbo home loan. These loans typically come with higher interest rates and down payment requirements than conforming loans. At Capital Home Mortgage, we are committed to helping our clients secure the best possible financing for their home purchases.

Our knowledgeable mortgage consultants will consult you and help you navigate the application and approval process to decide whether a jumbo loan is the best choice for your circumstances. 

Jumbo Loans vs. Conforming Loans

There are two main categories for home loans: jumbo loans and conforming loans. Jumbo loans are for borrowers who need a loan amount higher than the federal government’s limit. Conforming loans are for borrowers whose loan amount falls within federal guidelines. What differences exist?

For one, Jumbo loans typically come with a higher interest rate than conforming loans because lenders view jumbo loans as being riskier. A home with a loan value more significant than this may end up in the lender’s possession if a borrower defaults on their debt. As a result, lenders often charge a higher interest rate to offset this risk.

Another difference between Jumbo loans and conforming loans is the down payment. Borrowers taking out a jumbo loan often have to put down a larger down payment than those taking out a conforming loan because of the higher loan amount.

Lastly, Jumbo loans often have stricter credit requirements than conforming loans. Lenders want to see you have a strong credit history and a low debt-to-income ratio before approving you for a Jumbo loan.

Qualifying for a Jumbo Loan

Jumbo loans are more extensive than average and can cover properties that exceed loan limits, thus having more stringent requirements.

• Assets and Reserves

Lenders looking at your application want to see that you have the assets and reserves necessary to cover a large loan. This includes having enough money in the bank to cover several months’ mortgage payments and any other debts or obligations you might have.

Liquidity is also something lenders look for during the application process. They want to ensure you have enough cash on hand, including investment accounts, so they can trust your ability and commitment towards paying off what was loaned out recently or soon-to-be loaned again in future mortgages.

For Jumbo loans, the minimum down payment can be as high as 30% to skip private mortgage insurance. Meanwhile, it is only 20% for conventional loans.

• Credit History

The minimum credit score to qualify for a Jumbo loan is 700. It can go higher, depending on your current debt load. At Capital Home Mortgage, we recommend paying it off some debts before applying. Reducing that burden will improve your credit score and increase your chances of success.

• Debt-to-Income Ratio

We will also want to see that you have a low debt-to-income ratio, which means that your monthly debts are not taking up a large portion of your income. An ideal DTI is 45%, but the lower, the better.

• Employment and Income

We may request tax returns and other financial papers to verify your employment and income to see if you have a reliable job and a good salary. If you’re self-employed, we’ll want to see documentation of your business’s financial statements.

Apply for a Jumbo Home Loan in Killeen

Here at Capital Home Mortgage, we understand that buying a high-priced home comes with challenges. So, let us help you meet those needs and more by offering various flexible financing options for this type of loan! We’re also a direct lender, so we can make decisions quickly and get the loan process started sooner.

Call us at (254) 213-7343 to learn more about our Jumbo home loans in Killeen.