loanmart.com

loanmart.com

Borrowers considering homes that require mortgages above the Fannie/Freddie maximum of $417,000 should be aware of the many differences that exist in the qualification and underwriting processes. Generally, Jumbo mortgages are harder to qualify for and demand higher base interest rates. Conventional loans are available up to $417,000 in most areas at interest rates currently averaging below 5% for terms of up to and including 40 years. Jumbo mortgages (above $417,000) are offered by a diminishing number of lenders with rates generally at or above 6% with maximum terms of 30 years.

Another obvious disparity is the minimum required credit rating. Borrowers with FICO scores above 660 meet the minimum score qualification for conventional loans originated by most mortgage lenders. Jumbo loan applicants must apply with credit scores equating to 720 minimum. Additionally, conventional underwriting will allow at least one 30 day mortgage or rental payment delinquency in the prior 12 months (some lenders even allow for one in the past 6 months). Jumbo applicants can have no 30 day late notices over the same period.