Georgia Jumbo Loan
A jumbo mortgage loan is a loan whose amount exceeds the borrowing limit set by Fannie Mae and Freddie Mac for conforming loans. The current limit in Georgia is $766,550 for a single-family unit. So, if you need a mortgage with an amount that exceeds that set limit you will require a jumbo mortgage.
What is a Jumbo Loan?
A Jumbo Mortgage is a loan that allows borrowers to buy homes that exceed the conforming loan limit of $766,550. Jumbo loans tend to have stricter lending requirements than other programs.
A common misconception about jumbo loans is that you need a 20% down payment to qualify. The reality is jumbo financing allows you to purchase a property with as little as 10% down and sometimes 5% down, not the traditional 20%. You will get a better interest rate with more money down.
What are the Pros & Cons of a Jumbo Loan?
Jumbo Loan Pros
- Allows for larger loan amounts and in some cases even better interest rates.
- If you are a high-income earner with a solid financial history, credit score and larger down payment this may be the right loan for you.
- If you have a good credit FICO score above 680 you will be more likely to qualify.
- You can get a Jumbo Loan with as little as 5-10% down in some cases if your credit score is higher than 680.
- The total amount you want to finance, credit score, and your down payment will play a major role in whether you get financing.
Jumbo Loan Cons
- Qualifying for a Jumbo mortgage can be tougher than regular loans.
- If your credit score is below 680 you will likely have to put down a much larger down payment to offset the risk of a lower credit score. You also will pay a higher interest rate for the risk.
- You will need at least 6 months of mortgage payments in reserves and sometimes more depending on the scenario.
What are the Requirements for a Jumbo Loan?
Jumbo Loan Requirements
- Income - Your monthly mortgage payment, including taxes and fees, should not exceed 36% of your total income. If you combine this with your other debts ideally it should not exceed 43-45% of your gross monthly income.
- Financial History - We will want to look at two years of income, including W2’s and pay stubs. If you’re self-employed, we will require profit & loss statements or tax returns.
- Credit Score - Your credit score (FICO) should be 680 or above. If your credit score falls below this, you may have a difficult time acquiring this type of loan.
- Down Payment - Traditionally it’s been 20% of the cost of the home. The good news is lower down payments may be available for highly qualified borrowers and depending on loan size.
- Cash reserves – Typically you want to have at least six months’ worth of mortgage payments available in a liquid account – checking, saving, retirement accounts. More may be required depending on the loan scenario.
- Sales Price - The loan amount in most counties must be over $766,550.
How Long Does it Take to Get Approved for a Jumbo Loan?
Usually, you can expect approval from underwriting within 2 – 3 business days. If further information or documentation is needed, it may cause delays. The faster you provide accurate information the shorter your wait will be.
What is the Down Payment for a Jumbo Loan?
20% down payments used to be required for Jumbo loans but that’s no longer the case. Today you can qualify for options with as little as 5-10% down. It will depend on loan amount, borrower profile, and current available underwriting guidelines for a lower down payment jumbo loan. We will help you to determine what your upfront costs will be along with estimated closing costs.
Misconceptions About Jumbo Loans
You will have a long wait for approval
If your documentation is in order, you will get the loan approval quickly. There shouldn’t be any delays in the processing of your loan.
Your credit score is all that matters
Your FICO score is one aspect of approval. But having stable work history, income, and finances is also a big factor in getting your loan approved fast. If you show a pattern of late payments this may have a negative impact on your loan being approved.
Expect more paperwork
The documentation needed might be a bit different but is very similar to other loan applications.
So, which is better for you? Fixed or Adjustable-Rate (ARM) Jumbo Mortgages?
The easy answer is that it depends on how long you expect to live in the home. Also, the current interest rate patterns at the time of closing will dictate the rate you choose.
Have These Items Ready for Pre-Approval:
When you speak with us, here are the documents you want handy.
- Pay stubs for the last 30 days
- W2s for the last two years for all borrowers and all employers
- Last two years of complete tax returns (if self-employed)
- Government-issued Photo ID
- Most recent bank statements
Jumbo Loan Pre-Approval Letter
Once we have the proper information from you and you have completed the application here, we will complete your approval and go over all the details with you. You will also receive a pre-approval letter for you to start shopping for your new home. This is a critical step since it will let sellers know you are serious and are approved to purchase their home. Your realtor will use the pre-approval to help negotiate and get you the best deal on your home.
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