Jumbo Down Payment Requirements: With jumbo mortgage rates as competitive as they are, many borrowers financing a higher-end home will likely have a chat with their financial planner to see if leveraging these low rates makes better sense compared to making a 20 percent down payment when financing a jumbo home.
Keeping as much cash as possible working in equities, mutual funds or bonds might be the favored choice in lieu of tying up liquid assets in real estate. The jumbo mortgage market is similar to conforming and government-backed programs like FHA, but sometimes there can be slight differences from one mortgage company to another.
Because jumbo lenders don’t necessarily conform to conventional loan guidelines, they can introduce a jumbo program that few lenders have. Listed below are all the jumbo down payment requirements today:
Please note all programs require full income and asset documentation. The requirements below apply to only primary and second home purchases and non-cash out Jumbo refinance. Investment properties do have options for financing, but these programs will require a greater down payment.
- 95% LTV to $1,950,000. 700 fico credit score required. No monthly PMI.
- 90% LTV $3,000,000 with 720+ credit score, no PMI
- 85% LTV $3,500,000 with 720+ credit score, no PMI
Jumbo loan guidelines are very much like conforming loans and if the mortgage amount exceeds 80 percent of the value of the home, some lenders can require a mortgage insurance policy. Our programs permit up to 95% single loan options in most states with no PMI. 90% and 95% combo loan options (80/10, 80/15) are available in all states for qualified buyers.
Keep in mind borrowers with a higher down payment will generally always receive a lower interest rate due to decreased lender risk. For example, borrowers with a credit score of say 750 and a 30 percent down payment can have a better interest rate when compared to someone with say a 10 percent down payment and a 700 credit score.
After deciding how much to put down, the loan specialist will help compare different scenarios and discuss the pros and cons of each as well as review potential closing costs including reserve requirements for different loan types. Reserves are represented as the total monthly mortgage payment including principal and interest, taxes, insurance, homeowners association dues and mortgage insurance when used.
If the total monthly mortgage payment is $5,000 and the loan program asks for 6 months in reserves, that means an additional $30,000 in liquid and semi-liquid funds must be verified in addition to the amounts needed for the down payment and closing costs.
Borrowers are encouraged to read more about all the Jumbo financing options on our website. There you can find all the loan amount limits, loan to value caps and down payment requirements. Please contact us by submitting the Quick Contact form on the right side (mobile users will find the form below) We can also be reached by calling ph: 800-962-0677
