Financing a luxury home typically means using a jumbo loan instead of a standard conforming. Current conforming loan limits issued by Fannie Mae and Freddie Mac are limited to $647,200 in most counties in Utah, Salt Lake County included. However, a few counties in UT like Wasatch and Summit County are “high cost” and have higher limits up to $970,800
Mortgage amounts that exceed these limits are considered high balance or “Jumbo” in nature. In the past, most jumbo lenders require 15% and sometimes 20% down payments for these higher mortgage amounts. However, today there are some new competitive jumbo programs that don’t require such a large down payment.
Jumbo Low Down Payment Advantages:
There are a few advantages for buyers to put little money down on their next home:
Waiting on current home to sell or close – Maybe it’s taken longer than anticipated to sell your current home? Or you have to move due to job relocation, etc. The 3.5%, 5%, or 10% down jumbo programs can provide an option to get into a new home with a minimum down payment.
Funds for remodeling – Most buyers agree that no home is 100% perfect and will require some updating or renovations. By conserving cash, you can save the rest of your money for needed updates, new furniture, etc.
Lack of funds due to lost equity – even as the housing market has improved in recent years, property values in some markets are still below their all-time highs; so if you are making a lot less on the sale of your current residence, this program can help you get into a new home now to take advantage of low-interest rates and home prices we see today.
Retaining savings for other investments – check with your financial professional first but in certain cases it makes sense to put less down and keep your money working for you in stocks, etc. Or maybe you want to start a new business in the near future, all things to consider.
Buyers will want to remember a few things in regards to all the low down payment financing options:
- 96.5% financing: loan amount limit is $1,500,000. Please read more here on the new 3.5% down option.
- 95% financing: loan amount limit is $2,000,000
- 90% financing: loan amount limit is $3,000,000
- Buyers are required to fully document all income and assets (like normal Conventional mortgages)
- The property must be an owner-occupied home. However, there are other options for vacation homes, but these options could require a greater down payment.
- Regular single-family homes, townhomes, and condos only. Lot loans, farms/ acreage, or new construction (building on your own lot) are not permitted.
Buyers can read all the detailed credit requirements on the Jumbo Purchase page.
Also, note current homeowners have an assortment of cash-out and rate-term refinance options.
Buyers can learn more about all the qualifying and application requirements by contacting us at the number above or just submit the Quick Contact Form on this page.
Serving Salt Lake City, West Valley City, Provo, West Jordan, Orem, Sandy, Ogden, St. George, Layton, South Jordan, Millcreek, Taylorsville, Lehi, Logan, Murray, Draper, Bountiful, Riverton, Roy, Spanish Fork, Kearns, Pleasant Grove, Cottonwood Heights, Tooele