When it comes to purchasing a home, buyers can have difficulty finding financing that exceeds the conforming loan limit. This is where jumbo loans come into play.
What is Jumbo Loan?
A jumbo loan A mortgage is a type of mortgage designed to help you buy a home over and above the limits set by the Federal Housing Finance Agency. In ArizonaThis type of loan is often needed for expensive homes or properties located in expensive housing markets, such as Scottsdale. With Jumbo Loans, you can get the financing you need to buy the home of your dreams, even if it’s more expensive than a standard mortgage.
If the loan amount required is more than the Conforming Loan Limit (CLL), then you will need a jumbo loan. It is important for homebuyers to understand the requirements and implications of obtaining a jumbo loan in Arizona. For example, borrowers typically need a high credit score and a large down payment to qualify for a jumbo loan.
What is the jumbo loan limit in Arizona?
The jumbo loan limit in Arizona is $726,200 in all states. This means that loan amounts over $726,000 will be considered jumbo loans in Arizona. For example, if you are buying a Home in Maricopa CountyWhere the average sale price is $440,000, loan limits in excess of $726,200 will be considered jumbo mortgages.
Keep in mind that it is the amount being borrowed that determines whether you will need a jumbo loan or not, not the cost of the home you are buying. So, if you put the $100,000 down on the $780,000 home in phoenix, the loan would be $680,000, which is within the corresponding loan limit for the area. In this case, your loan will not be considered as a jumbo loan.
For more information about the conforming loan limit in your county, visit FHFA map,
What Are The Requirements For Jumbo Loans In Arizona?
To qualify for a jumbo loan in Arizona, borrowers must meet stricter requirements than for a conforming loan. Specific requirements may differ from lender to lender, but below are the specific requirements for borrowers applying for jumbo loans.
High Credit Score: To be eligible for a jumbo mortgage, lenders typically expect borrowers to have a credit score of at least 720. While some lenders may consider a score as low as 660, a credit score lower than this is generally not accepted.
Large down payment: jumbo loans are in great need advanced payment compared to conventional mortgages. While the exact amount varies depending on the financial situation of the lender and borrower, down payment requirements for jumbo loans can be as high as 20% or more. That said, some lenders may offer jumbo loans with down payments as low as 10%, provided the borrower meets certain credit and income requirements.
More Properties: During the asset review process, lenders typically request that jumbo loan borrowers provide sufficient liquid assets or proof of savings to cover the equivalent of one year’s loan payments.
Low debt-to-income ratio (DTI): When applying for a jumbo mortgage, Arizona lenders typically look for a borrower with a debt-to-income ratio (DTI) of less than 43%. Ideally, a DTI closer to 36% or less is preferred. dti It is calculated by dividing the sum of all monthly loan payments by gross monthly income. A low DTI reflects a borrower’s ability to manage their current debt load while taking on additional mortgage payments. It also indicates greater financial stability and ability to make timely payments for their jumbo loans.
Additional Home Appraisals: A home appraisal It is required whenever a homebuyer obtains financing for the purchase of his home. Although a mortgage lender may require additional appraisals for jumbo loans. In areas with limited comparable property sales, this appraisal may be more expensive than in areas with higher sales rates.
