What Are My Jumbo Loan Options?

There is a common misconception that there is only one “jumbo loan” when, in fact, there are many ways to borrow over the conforming loan limit. The misconception is generally unsurprising because few lenders offer a wide range of jumbo loan options. Mortgage banks, like United Home Loans, develop relationships with both large institutions and smaller, specialty investors, which means you have access to more solutions.  

What is a Jumbo Loan?  

A jumbo loan is any mortgage in which the amount is above what the Federal Housing Finance Agency sets as the conforming loan limit (press releases containing the following year’s conforming loan limit are typically published in November and can be found here). Loans up to the limit are eligible for financing through government and government-backed agencies. Loans above the limit- therefore deemed riskier- can only be purchased by banks and investment firms that are not government-backed. 

Keep in mind that while the many jumbo loan options below give you easier ways to qualify, you will still need to meet more stringent requirements than if you were applying for a conforming loan, including better credit scores and lower debt-to-income ratios. That said, it’s important to talk to a mortgage banker about qualifying because you may find out you already qualify or there are just a few simple things you need to do in order to qualify. It’s never too early to plan for a jumbo loan! 

Overview: Jumbo Loan Options

The typical jumbo loan requires a 20% down payment, higher interest rates, and strict income documentation. The purpose of jumbo loan options is to ensure that everyone who can afford a jumbo loan is able to qualify for one. The loans below each solve for at least one of the requirements above.  

10% Down Jumbo

The title pretty much says it all. If you don’t have 20% to put down on a home, there’s a lower down payment option available. Alternatively, you may have 20% but rather than use it all for the down payment, you can reallocate your funds to go toward renovating the home or wealth management solutions.  

Jumbo ARM

If you don’t plan on staying in the home forever or are simply looking to lock in a lower rate today with a future refinance in mind, a Jumbo ARM is the way to go. A lower interest rate is locked for an initial fixed period, after which adjusts to the market. People who plan to sell or can safely predict a refinance due to better market conditions before the initial fixed period is over, benefit the most from an ARM.   

Bank Statement Loans

One of the most difficult circumstances for acquiring a conventional Jumbo Loan is when the borrower is self-employed because tax write-offs skew income down as reported by Federal tax returns. Additionally, those whose employment is seasonal will find difficulty qualifying for a traditional jumbo loan because they cannot document steady paystubs. This jumbo loan option, however, allows you to prove you can afford the home by providing 12-24 months of bank statements. 

$0 Down Physicians Loans

Why would a doctor need a specialty Jumbo Loan? The answer is medical school debt. It’s hard for new doctors, despite their income, which we know will rapidly increase in the future, to achieve a DTI that will qualify them for a loan. With a modified calculation of school debt and down payment options as low as $0, new doctors can become new homeowners. 

Debt Service Coverage Ratio

When it comes to investment properties, private individual loans can be risky and a cash buy can sometimes be unattainable. A DSCR loan uses unconventional qualifying requirements to provide investors with a simpler path to financing as much as $2.5M.

Hard-To-Find Loans

Alternative jumbo loan options aren’t exactly easy to find, which is why banks like United Home Loans cultivate varied investor relationships to bring you what you need all in one place. If you’ve been looking for the right jumbo solutions, fill out the contact form below!