If you’re a homeowner who wants to borrow more than the conventional mortgage limit of $510,400, then you should consider a non-conforming jumbo mortgage. Jumbo mortgages are loans that exceed the conforming loan limit set by the Federal Housing Finance Agency (FHFA). These loans can be used to buy or refinance properties with higher values.
Before applying for a jumbo mortgage, it’s important to understand how they work and why you should consider one. Here are some key benefits:
1. Lower interest rates: Non-conforming jumbo mortgages generally offer lower interest rates than traditional loans because lenders have more flexibility in setting rates. This can save you money over the life of the loan and help you pay off your debt faster.
2. Higher loan amounts: With a non-conforming jumbo mortgage, you may qualify for a larger loan amount than with a standard conforming loan. This means you can buy more expensive homes or finance larger projects with your loan proceeds.
3. More flexible terms: Non-conforming jumbo mortgages often have more flexible terms than traditional mortgages, allowing you to customize your repayment plan to fit your needs. This can make it easier to manage your finances and save money in the long run.
To qualify for a non-conforming jumbo mortgage, lenders typically require higher credit scores (700 or above) and larger down payments (20 percent or more). They may also require additional documents such as tax returns, bank statements, and other proof of income and assets before approving your application. It’s important to shop around for different lenders and compare their requirements before applying for a loan so that you can find the best deal available.
In addition to meeting these basic criteria, there are some smart financial behaviors that can help improve your chances of getting approved for a non-conforming jumbo mortgage:
1) Pay off any existing debts as much as possible – this will lower your debt-to-income ratio and make it easier to get approved; 2) Make sure all payments on existing accounts are made on time – this will demonstrate financial responsibility; 3) Maintain ample liquid assets – having cash reserves is always beneficial when applying for any type of loan; 4) Make sure all credit reports are accurate – errors on credit reports could affect your score negatively; 5) Shop around for different lenders – compare rates and terms from different lenders before making a final decision; 6) Get preapproved – getting preapproved will give you an idea of what kind of interest rate and loan amount you could qualify for before submitting an official application; 7) Prepare all necessary documents ahead of time – having all necessary documents ready will make the process smoother when applying; 8) Calculate how much house you can afford based on income – use online calculators or speak with a financial advisor to determine how much house is within reach given your budget; 9) Develop an action plan if denied – if denied, come up with an action plan to address any issues raised by the lender so that when reapplying you have improved chances of being approved; 10) Consider other financing options if needed – if denied after trying all other avenues, consider alternative financing options such as FHA loans or VA loans which may also provide lower interest rates than conforming loans but require additional paperwork or eligibility requirements such as military service history or proof of disability respectively .
All in all, taking out a non-conforming jumbo mortgage is an excellent option if you need extra funding for large projects or expensive property purchases but don’t want to pay exorbitant interest rates associated with traditional conforming loans. By following these steps and meeting basic criteria outlined by lenders, homeowners should be able to secure approval quickly and start taking advantage of these great benefits right away!