LagunaBuck323
Jumbo Refinance Mortgage Loans Could be Approved If you are Prepared
You're thinking of a jumbo loan for a home refinance while rates are low but you have been told, "Do to not waste your time and effort applying. Not now, since the banks aren't lending!" Most banks aren't too interested in approving jumbo loans. The jumbo loans are considered high risk loan, especially in a stagnant economy. Some banks may offer jumbo loans however their underwriting process is so strict that getting the jumbo loan towards the closing table is impossible. There are some banks that handle jumbo loan efficiently and will hold these loans within their portfolio. Finding this kind of bank may be the first step inside your mission to have your jumbo loan refinanced. The right bank will have the widest variety of terms and have the most flexible underwriting guidelines. There are other points that needs to be considered when choosing the best bank.
Despite the inherent risks posed by higher loans, the basics of home loan underwriting still apply. Like mortgage loans with amounts below $417,000, the five Cs of lending remain intact, (capacity, credit, capital, collateral, character.) So what's different with jumbo loan underwriting?
A residential jumbo loan is any mortgage loan where the loan size exceeds GSE's (Government Sponsored Enterprise for example Fannie Mae and Freddie Mac) limits. Currently, the GSE's loan limits are limited to $417,000.00 or $625,500 in Alaska or Hawaii. Any mortgage loan exceeding these limits is considered a jumbo loan. This is obviously the very first obvious difference between a standard home mortgage and the jumbo loan. With higher loans comes a lesser LTV (loan to value) Expect to have a minimum of a 20% equity position on the rate/term refinance.
The loan terms will be different from lender to lender and it's always prudent to look for a lender that has a variety of options that can be tailored for your specific needs, whether you'll need a Thirty year fixed rate, a 15 year fixed rate or perhaps a 5/1, 7/1 or 10/1 hybrid ARM or interest only. The eye rates on these higher loan amounts are not up to some borrowers think they'd be. They often are a tiny bit higher than conventional home loan rates and in some cases they might be lower than some conventional loans after their rate adjustments.
Many borrowers have unique situations and the bank that you ought to use is one which has a clear knowledge of the uniqueness from the higher loan borrower. For instance, although a lot of borrowers possess a standard salary and W2 income, there's a disproportionate number in comparison with lower amount borrowed applicants which have a W2 income which include bonuses or commissions. With the higher loan values, there's also a larger quantity of self-employed borrowers and professionals. Different calculations ought to be used for this kind of borrower to allow for depreciation, depletion, bonuses and commissions. For a borrower's best shot at loan approval and efficiency, the larger loan amounts require a bank which has a staff of underwriters and originators who've a greater skill set and proper training for this type of mortgage origination and underwriting.
In order to be approved for a jumbo loan, you must bring along support documentation. Income documentation, documentation of reserves, letters of explanation, tax documents, etc. In a nutshell, you will need 2 yrs tax statements with all of schedules, one month's newest pay stubs, 8 weeks most recent bank statements, schedule of property owned, most recent statements of stocks, bonds 401k and IRA accounts. An expert loan originator who is accustomed to this type of loan will give you insight on what documents you need for your application.
