Qualifying For a Jumbo-Mortgage

Jumbo Mortgages all but disappeared from the market it seems since the financialand mortgage-market meltdown of 2008. Though more recently more and more lenders and banks that offer mortgages are moving back into the jumbo-mortgage arena, albeit has been a slow-move. Lenders and banks have been very cautious about offering jumbo-mortgages. 

In places like Houston, TX where home values are stable and there has been little mortgage foreclosure activity jumbo-mortgages are readily available again, yet with more restrictions than those jumbo mortgages offered just a few years ago. Let’s just say that banks are more conservative with the money they have allocated for jumbo-mortgages.

So what should borrowers expect to qualify for a jumbo-mortgage in today’s mortgage market-place?

1. Excellent credit is a must for the majority of lenders that offer jumbo-mortgages your FICO score must be at least a 700, though a few lenders will entertain a jumbo-mortgage with a reduced loan to value with a 680 FICO score. You should not have had any late mortgage payments within the last 12 if not 24 months. You should not have had any bankruptcies within the last 5 years or a foreclosure within the last 7 years.

2. To obtain a jumbo-mortgage or any mortgage for that matter int  today’s current mortgage-market you need to be able to prove your income. Stated-Income mortgages or No-Doc mortgages are a thing of the past. If you work for a company you will need to provide your most recent-two pay-stubs and the last two years W-2s. For the self-employed borrower your income will be the average of your last two years adjusted-gross income from your tax return. For those individuals that “write-off” as many expenses as possible that may be detrimental to you qualifying for a jumbo-mortgage.

3. Down-Payment for a jumbo-mortgage in today’s mortgage market is a minimum of twenty-percent. The days of 100% financing of jumbo-mortgage are long gone.  The higher the loan-amounts expect the lender to require a lower loan to value or a higher-down payment on the jumbo mortgage.

4. Assets, in addition to your down-payment and closing-costs most lenders are going to require that you have from 6 months to 12 months of cash reserves of the total principal-interest-taxes-insurance of your jumbo-mortgage.

5. Employment, a minimum of a two year work history and if you are self-employed you must have at least two years history supported by tax returns showing you as self-employed.

Though there are additional factors for qualifying for a jumbo-mortgage these are the basics. Without them you won’t qualify for a jumbo-mortgage – have all of the above and you have an excellent chance of getting qualified for your jumbo-mortgage.

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