Jumping into the home mortgage market can be confusing, especially for first time home buyers. Typically, if you are looking at more expensive homes and are going to need a mortgage over $417,000, you’re going to need a what is called a jumbo loan. But before you get in over your head, it’s a good idea to brush up on terminology and understanding the basics of jumbo home loan purchases in NJ.
These types of loans are not called jumbo loans for the dollar amount only, but in most states, the conforming loan amount for a single-family home is $417,000. Only two states have a higher limit and those two states are Alaska and Hawaii, where the limit is actually $625,000.
As with other conventional mortgage loans, there are many factors that will allow you to qualify for a jumbo loan. It is best to speak with a seasoned mortgage lender to see what you are qualified for and understanding all your options.
Typically, for a jumbo loan purchase, your debt-to-income ratio will need to be lower than that of a conventional loan. Other factors that will be considered are higher credit scores, larger cash reserves and much larger down payments. Another aspect that may be a consideration is that the jumbo mortgage rates are often higher than those of conventional mortgage rates.
Many consumers are very interested in these types of loans because right now the rate for a jumbo loan is at an all time low. This allows consumers to purchase more home for less interest. For home buyers that have the assets, the credit score and the cash to put down for the down payment, they can get the home of their dreams for very little.
Another reason why so many home buyers are asking for these types of loan is because the housing market has so many higher end homes for sale. With the crash of the housing market years ago, many high end homes went into foreclosure or were put up for sale as a short sale. This allows families to purchase even more of a home for less than what they could a decade ago.
