Midland Jumbo Home Loans

You’ll quickly discover that you’ll need a jumbo loan to get the financing you require if you live in an area with few options for affordable housing or are looking to buy a higher-end home.

Getting a mortgage loan is already hard enough. What more if you need a jumbo loan? Still, it’s not impossible. Let’s break down a jumbo loan, the criteria banks and other lending institutions look for, and how you can secure one.

How Does a Jumbo Loan Work? 

Do jumbo loans function similarly to conventional loans? Yes, but only to a certain extent. Jumbo loans exceed conventional conforming loan limits, which means they cannot be purchased or guaranteed by Fannie Mae and Freddie Mac, leaving the lender vulnerable to losses if the borrower defaults. Because of their high-risk level, jumbo loans typically have stricter financial and qualification requirements than all other mortgage loan options.

Take the following factors into account before you apply for a jumbo loan: 

• Property types

As long as you satisfy the terms set by your lender, you can use a jumbo loan to finance any real estate transaction, whether a primary residence, a vacation home, or an investment property.

• Down payment

You’ll typically need a higher down payment for a jumbo loan. Lenders usually require a 20% down payment, but some lenders may allow a lower down payment depending on the type of property you want to purchase, your loan amount, and your credit score. 

• Credit score

Your three-digit FICO credit score, which ranges from 300 to 850, is a measure of how well you handle debt repayment. You usually need a credit score of at least 620 to get a conventional loan. However, if you want a jumbo mortgage, your lender will probably want a credit score of at least 700.

• Debt-to-income ratio (DTI)

The DTI measures how much your monthly take-home pay goes toward paying off debt. You can figure out your own DTI by dividing your monthly gross income by any minimum payments you have to make. You’ll want to keep your DTI below 43% to increase your chances of qualifying for a jumbo loan.

Benefits of Jumbo Loans

You may wonder, “Why should I get a jumbo loan?” One of the main advantages may already be clear to you: jumbo loans allow you to borrow more money than the standards set by Fannie Mae and Freddie Mac. So, if you want to buy a home that costs more than the maximum amount a conventional loan can cover in your area, you have an option.

Some additional benefits of jumbo loans are as follows: 

• Possibility of getting better interest rates

• Borrow the entire amount from a single loan, as opposed to splitting it into two separate loans

• It provides more flexibility than conventional loans

Also, jumbo loans can be a more comprehensive financial tool because they allow you to select the mortgage that best suits your needs. If you want to invest in real estate, jumbo loans can play a significant role in your investment strategy.

Need a Hand With Midland Jumbo Loans?

Since jumbo mortgages are harder to qualify for, you should improve your credit score and save a more significant down payment or cash reserve before applying. But even if you are eligible, take a good look at your finances first and consider how the mortgage will affect your future. You would not want to make a 30-year commitment you can’t afford. 

Whatever mortgage option you decide to go for, the loan experts at Capital Home Mortgage are here to simplify and speed up the mortgage process for you. You can rely on them to give you honest, trustworthy advice on mortgage-related matters.

We’ve built a solid reputation for making homeownership possible for countless Texas residents and are keen on using our expertise to help you, too.

Contact us online or call (phone number) to speak to one of our mortgage experts at (432) 218-4828.