If you are looking for a luxury home loan in Frisco, TX, we offer the most personalized service available. Jumbo loans can allow you to finance or refinance your dream home without taking out multiple loans, but only if you are able to make the monthly payments comfortably. A jumbo loan can be used to finance a new home, refinance a former mortgage, consolidate multiple loans, or do a cash out refinance.
Jumbo mortgages can be immensely helpful for financing larger homes, but they are not necessarily right for everyone. When considering a jumbo loan, there are a number of things you need to consider.
Jumbo Loans, GSE’s, and the Conforming Limit
Normally, there is an upper limit on the size of a mortgage that lenders will give you. This upper limit, called the “conforming limit,” is the maximum amount that Fannie Mae and Freddie Mac will pay to buy a loan. Usually, this amount is $417,000.
Here’s how it works: Fannie Mae (or the Federal National Mortgage Association) and Freddie Mac (the Federal Home Mortgage Corporation) are government-sponsored enterprises (GSE’s) that buy mortgage loans from lenders. Since they have a maximum amount on what they will buy, amounts beyond $417K must be made as “jumbo” mortgages.
Jumbo mortgages represent a much higher risk to lenders, so the requirements tend to be much more strict.
Since jumbo loans are more risky for lenders, you must be able to prove that you are financially responsible (i.e. have good credit) and are able to take on the higher monthly payments. Jumbo mortgages will generally require higher down payments. Our jumbo loans require down payments of 20% in most cases, though special circumstances may only require 10%.
When calculating your ability to make monthly payments, we compare the payment amount to your gross income. Generally, jumbo mortgage payments should not exceed 43% of your income.
Advantages of Jumbo Loans
The main advantage of a jumbo loan is the ability to finance a larger home without taking out multiple loans. These luxury home loans also come in many shapes and sizes, including both fixed-rate and adjustable-rate mortgages.
To summarize, a jumbo loan can help you buy a luxury home or refinance a mortgage without having to manage multiple loans. When looking at jumbo loans, be sure to remember the following:
- Fannie Mae and Freddie Mac won’t buy jumbo loans because they are larger than the conforming limit of $417,000
- Jumbo loans represent a higher risk to lenders
- Lenders have more stringent requirements for jumbo loans
- Most jumbo mortgages require 20% down minimum, though 10% is possible in some cases
- There are multiple options available for jumbo loans
Jumbo loans may not be right for everyone, but if you can afford it and are well informed on your options, they can help you save money down the road.
Why Choose Patty Newby
Our team can help you finance your luxury home, build home equity, and take advantage of other options, such as a refinance mortgage or cash out refinance. Before we move forward with anything, however, we take a very close look at your current financial picture. This includes more than just your credit history. We examine such aspects as your net worth, the value of your assets, your current income, and so on. This is a level of personalized service you won’t find anywhere else, so in order to explore your home financing options in Frisco, TX, give us a call today.
About Frisco, TX
As one of the fastest-growing cities in the nation, Frisco, TX, offers residents and visitors a variety of attractions, including various sports venues. These venues include Dr. Pepper Ballpark, Dr. Pepper Arena, and the newly announced Cowboys headquarters, called The Star. The city is located in Collin and Denton Counties about 25 miles from the DWF International Airport.