Mid America Mortgage Inc. Is One of the Best Jumbo Mortgage Lenders Serving the Houston TX Area

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If you’re in the market for a jumbo lender serving the Houston TX area, you probably already have some ideas about the features you want most out of your luxury home. If considerable square footage tops your wish list, you’re likely going to need a loan that matches the price tag of your dream home. A non conforming loan might be the answer to all your financing woes.

What is a Jumbo Loan in Houston?

A jumbo loan is exactly what it sounds like; it’s essentially a larger loan than its conventional counterpart. It’s a loan that specifically meets the financial needs required when purchasing a more expensive property.

You might be wondering what “more expensive” means, exactly. There is an actual number attached to that description: $424,100. In most parts of the U.S., that’s the starting cost to qualify for this type of mortgage. Anything less than that amount falls under the category of a conforming loan. In especially high-cost areas, such as Los Angeles, the minimum is set at $636,150.

One of the benefits of this loan product is that it makes buying a large house more attainable. Instead of having to save up until you have enough money, hunt down multiple loans, or sacrifice some other accounts you had set aside for other uses, you can use this niche mortgage product to finance the full amount of the home.

If you’re looking to purchase a very expensive home, you might qualify for a super jumbo mortgage, which is for extremely high end properties.

Super jumbo loans are usually set aside for amounts exceeding $650,000, however there isn’t a specified minimum because this type of loan isn’t governed by any overseeing organization. Thus, the definition and limits vary among lenders who offer it.

Jumbo Lending Requirements

For home-buyers whose income can accommodate a more substantial mortgage, these provide unique advantages, and also come with unique requirements. The requirements to obtain one are more stringent than that of a conforming loan, simply because of the risk involved in providing a loan for a higher-cost property.

As with all loans, your overall income needs to be proven adequate enough to cover the monthly payments. Additionally, your debt-to-income ratio (DTI) should be somewhere in the neighborhood of 38 percent or lower. Every lender will have their own DTI maximum, but the common element is that they scrutinize your DTI more closely when determining if you qualify for jumbo financing.

You also need to have a fairly solid credit score to qualify. Most lenders are not willing to offer this type of financing for someone who has a so-so credit history. Requirements differ between lenders, but most will look for a credit score no lower than 680.

The down payment of is determined by the overall price. Some lenders only require 5% down on houses in the 400s. If your cost is going to exceed $1M, expect to put at least 10% down, and 20% if it’s a multi-million dollar property.

Lenders will also consider the liquid assets for which you can provide documentation. You’ll need to show that you can handle a down payment, closing costs, and future monthly payments. As with other requirements, lenders differ in their policies regarding reserves. One lender might only require six months of reserves, while another might require 5 years. Some of the variability also depends on how large the loan is.

Jumbo home loan interest rates tend to be higher than those of conforming loans, because with a higher loan comes higher risk. Not only is the amount of the loan higher, but the market is smaller for higher-priced homes. Subsequently, high-priced homes might be difficult to sell in the future, or might sell for less because of fluctuations in value during rocky market times. The higher interest rates compensate for the risk involved.

Finding the Right Jumbo Mortgage Lender Serving the Houston Area

When shopping around for lenders, keep in mind that there are some particulars to consider.

Obviously, you want to find someone who will offer rates that work with your budget. You also want to do your research and make sure that you meet the requirements of that particular lender. Instead of wasting your time getting to an office and being turned down, it’s easy to go online and look up the requirements and other pertinent information. That will give you a starting point and help you narrow down the options.

You also want to make sure that the lender you’re working with has exceptional knowledge and experience working with jumbo mortgage financing. If you decide to go with an organization that handles an astronomical amount of financial dealings like a bank, you should expect to get different service than if you go to a mortgage lender. Banks have loan specialists, but you might not get the attention and education that you want with a bank. Smaller companies tend to be more focused on making sure you have everything you need to be successful in the entire process, instead of leaving you to navigate the operation on your own.

If you’re looking to move quickly, as most buyers are, you want to seek out a company that excels in customer service. This will not only ensure you that the process will go smoothly and that you’ll be kept in the loop about any information you might need to be privy of, but you’ll likely close the deal more quickly. A large purchase can be stressful enough, and you want to work with someone you feel comfortable with, whom you feel is very invested in your satisfaction.

Jumbo mortgage loans are an indispensable resource for anyone who is interested in a higher-priced home. As long as the buyer has the right financial details in order, the convenience of a jumbo loan is going to open up a range of options that could make the home buying process much more comfortable. With the aid of a good lender who understands the ins and outs of this particular financing option, a borrower will be off to a great new start.

For questions about a Jumbo Loan in the Houston area, please call 281-533-8544

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