When it comes to buying a home, buyers can find it difficult to obtain financing beyond conforming loan limits. In this instance, you may need to apply for a jumbo loan. whether you have your eye on ranch-style home in tulsa or a New Construction in the YukonLet’s take a look at what a jumbo loan is in Oklahoma, the 2023 compliant loan limits, and what is needed to qualify for this type of loan.
What is Jumbo Loan?
So what are jumbo loans in Oklahoma? Those are large loans that exceed the loan limits set by the FHFA for conforming loans. jumbo loan Allow borrowers to finance homes that exceed the Conforming Loan Limit (CLL), making it possible to purchase high-end properties that might not otherwise be affordable.
If you need to borrow more than CLL for the house you are buying, you will need to apply for a jumbo loan. Because of the larger loan amount, jumbo loans typically have stricter requirements and higher interest rates than conforming loans. Lenders may require a higher down payment, a lower debt-to-income ratio and a stronger credit score in order to qualify for a jumbo loan in Oklahoma.
What is the jumbo loan limit in Oklahoma?
In Oklahoma, the corresponding loan limit is $726,200 in all counties. For example, if you are buying Home in Tulsa CountyWhere the average sale price is $275,000, loan limits in excess of $726,200 will be considered jumbo mortgages.
Keep in mind that it is the loan amount that determines whether you will need a jumbo loan, not the value of the home. So, if you need to reduce $50,000 on $750,000 home in bixby, the mortgage will be $700,000, which is under the typical loan limit for the area. In this case, your loan will not be considered as a jumbo loan.
This FHFA Map will give you more specific information regarding the conforming loan limit in your county.
What Are The Requirements For Jumbo Loans In Oklahoma?
As mentioned earlier, the requirements for a jumbo loan are much more stringent than those of a conforming loan. The specific requirements may differ from lender to lender, but below are the specific requirements for borrowers seeking jumbo loans.
High Credit Score: To qualify for a jumbo mortgage in Oklahoma, borrowers are generally required to have a credit score of at least 720. However, some lenders may be willing to accept scores as low as 660, although less frequently. A high credit score reflects a borrower’s ability to manage credit responsibly and is an important factor that lenders evaluate when reviewing jumbo loan applications.
Large Advance Payment: Jumbo loans usually require larger loans advanced payment Compared to conventional loans. Typically, lenders require a down payment of at least 20% of the home’s purchase price to qualify for a jumbo loan. However, some lenders may require a higher percentage depending on the creditworthiness and overall financial condition of the borrower. Don’t forget that a larger down payment can help lower the monthly mortgage payment, as well as lower overall interest costs over the term of the loan.
More Assets: Jumbo loan lenders generally require borrowers to demonstrate a strong financial profile, including substantial liquid assets or savings. To qualify for a jumbo loan, borrowers must have enough reserves to cover at least one year’s mortgage payments. This requirement ensures that borrowers have the financial flexibility to meet their loan obligations in the event of financial hardship.
Low debt-to-income ratio (DTI): A mortgage lender will look at the borrower DTI (debt-to-income ratio) Assessing their creditworthiness and spending habits. For conforming loans, a DTI of up to 50% may be acceptable to some lenders. However, jumbo loan borrowers require a lower DTI, ideally less than 43% and closer to 36%. This is because jumbo loans are risky for lenders because of the large loan amount. Applicants with a higher DTI may still qualify for a jumbo loan, but it may result in a higher interest rate or a stricter approval process.
Additional Home Appraisals: When you buy a home in Oklahoma, mortgage lenders will require home appraisal To confirm that the value of the property is equal to or more than the loan amount. In some cases, a lender may require an additional appraisal for a jumbo loan. In locations with very few comparable property sales, appraisal costs can be higher than in neighborhoods with more frequent sales.
