Jumbo loans are becoming increasingly popular (and necessary) for Dallas homebuyers. This is mostly due in part to the rising costs of homes in Texas.
What is a Jumbo Loan?
A jumbo loan is a loan that exceeds a particular county’s loan limits. For most areas in Texas, the conventional loan limits range from $100,000 to $510,400. These limits are set by the Federal Housing Finance Agency annually. Any loan amount over $510,400 would be considered a jumbo loan.
Jumbo loans tend to have stricter underwriting guidelines because unlike conventional loans, they are not eligible to be purchased on the secondary market by Fannie Mae or Freddie Mac. Instead, these loans are held by banks or private funds. Jumbo loans usually have tighter debt-to-income (DTI) ratio requirements, larger down payment and reserve requirements, and stricter credit standards. Jumbo loans can be used for primary residences, investment properties, or second home purchases in Dallas.
Jumbo Loan Rates
Jumbo loan rates are usually lower than conventional loans. Part of the reason why jumbo loans tend to have lower rates is because of their stricter qualification criteria. At JVM, our jumbo rates match or beat all the big banks in Dallas.
Who Should Use a Jumbo Loan?
Jumbo loans are an excellent loan option for Dallas borrowers who have strong credit histories and have a decent amount of funds saved up for their home purchase. We strongly recommend that well-qualified borrowers with strong loan applications consider using a jumbo loan if the Dallas property they are looking to purchase exceeds the conforming loan limits.
If you are thinking about obtaining jumbo financing or have additional questions about what loan products you may qualify for, you can reach us here, by phone at (855) 855-4491, or by email at [email protected].