Vermont Jumbo Loan Guidelines: Home buyers in VT are surprised to learn about new Jumbo home mortgage options that require only 5% down payment. This is great for buyers purchasing in higher costs locations like Burlington that have limited cash down payment, or money tied up in other investments. If you think Jumbo loans still require a large 20% down payments, you may want to think again. Below we discuss all the latest jumbo guidelines including credit and LTV requirements. Please contact us anytime at Ph: 800-962-0677 with questions.
What is classified as a Jumbo Mortgage?
As the name suggests, a jumbo mortgage loan is a very large home loan. It is a loan that exceeds the conforming loan limit imposed by Fannie Mae & Freddie Mac (the 2 government-sponsored enterprises that buy loans from lenders) In most places, the conforming limit imposed by Fannie Mae and Freddie Mac is $726,300. However, this limit is greater in some higher costs locations around VT. Fannie and Freddie are willing to guarantee loans up to the conforming loan limit, not beyond it.
Benefits of a Jumbo Mortgage:
Jumbo loans are ideal for home buyers looking for high-end homes. These loans are designed to simplify home buying in pricey markets by covering the full cost of the loan, so there is no need for borrowers to drain their cash reserves. Once borrowers qualify for jumbo loans, there is no need to take out 2 or more loans to purchase. Many options today allow for one single loan up to 95% financing. Also just like conventional mortgages, jumbo loans can be obtained at a fixed and an adjustable rate- including 15 year, 30 year fixed rates to 5/1, 7/1 ARM.
In the past, the interest rates on Jumbo loans were much higher when compared to conventional mortgage rates. That’s not so much the case these days. The gap between conforming and jumbo loan has reduced significantly to spur home sales and economic growth, making jumbo loans extremely affordable for buyers.
Other perks of jumbo loans include:
- No PMI (Private Mortgage Insurance) requirements
- Jumbo financing up to 95% – 700 credit score required, $2mil loan amount limit
- Jumbo financing up to 90% – 700 credit score required, $3mil loan limit
- Other options available to $5 mil – will require 720 credit and down payment of 15% +
- Financing up to 90% available for vacation homes – 700 credit required
- Fixed rate or adjustable rate terms
- One single loan, or 80/15 combo options are available
- Simple Jumbo refinance options available.
Basic eligibility requirements for a Jumbo program:
Now let us take a quick look at the eligibility/qualification requirements for a jumbo loan. To qualify for a jumbo loan, a home buyer should expect:
- Documenting income – two years of tax returns and W2’s for salary workers
- The maximum debt-to-income ratio should not be more than 40 percent
- Buyers have at least 3-6 months’ worth of reserves available after closing. Lenders like to see borrowers’ reserves as it enables them to ensure that the borrower has the ability to make monthly mortgage payments. The reserves can be nonliquid accounts like 401K, etc.
- Single family, townhomes, and select condos are permitted. Land/lot loans, construction to perm, or rehab home financing are not permitted.
Be sure to take a look at the Jumbo Purchase page for more information
Jumbo Mortgage Source serves buyers nationwide, including Vermont – Burlington, Rutland, Essex Junction, Barre, Bennington, Montpelier, Winooski, Brattleboro, St. Albans, Middlebury, St. Johnsbury, Newport, Springfield, Northfield, West Brattleboro
Please contact us Monday – Sunday at ph: 800-962-0677 or just submit the Quick Contact form on this page.