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Jumbo Mortgage Loans In Texas

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Texas Jumbo Loans

Are you in the market for a new home in Texas, but find that conventional mortgages are out of reach? A jumbo loan may be right for you. Jumbo loans in Texas are available for up to $2 million and provide some flexibility when it comes to down payment requirements and interest rates.

If you’re interested in learning more about jumbo loans, contact our team at LBC Mortgage today. We can help you determine if a jumbo program is the right option for you, and walk you through the application process.

How Does a Jumbo Loan Work in Texas?

Texas jumbo loans are mortgages that exceed the maximum loan limits set by the Federal Housing Finance Agency (FHA). Texas jumbo mortgages can be fixed-rate and adjustable-rate mortgages (ARM). They have higher interest rates than conventional loans, so it’s important to shop around and compare rates before making a decision.

What documents do you need to apply for a jumbo loan in Texas?

Applying for a jumbo loan, the lender will look at your credit score, employment history, and income. They will also consider the value of the property you are planning to purchase. Let’s take a close look at the jumbo program requirements to consider.

How to Qualify for a Jumbo Loan in Texas

Qualifying for a jumbo loan is not so easy. The requirements are more stringent than for a conventional mortgage, and the down payment is higher. However, there are some ways to increase your chances of qualifying:

1. Credit score
Lenders will be looking for a score of 720 or above. If your score is lower, you may still be able to qualify if you have a strong history of on-time payments.

2. Debt-to-income ratio
This ratio measures how much of your income goes towards debt payments each month. Lenders like to see a ratio of 45% or below.

3. A strong employment history
Lenders will want to see that you have been employed steadily for at least two years. They may also consider self-employment on a case-by-case basis.

4. Down payment
Jumbo loans typically require a down payment of 20% or more. However, some lenders may work with you if you have a smaller down payment but strong financials overall.

5. Financial well-being
Prepare extensive documentation to prove your income and assets. This may include full tax returns, W-2s and 1099s, and bank statements. While this may seem like a lot of work, it is essential to get the best loan terms.

6. Property in an eligible area
Some areas are excluded from jumbo loan eligibility due to their higher risk level. Make sure to check with your lender to see if the area you’re buying in is eligible.

7. Higher interest rate
Jumbo loans typically come with slightly higher interest rates than conventional mortgages, so be prepared for that extra cost.

8. Work with an experienced loan officer
Applying for a jumbo loan can be complex, so it’s important to work with someone who knows the process inside and out.

Jumbo Loan Benefits In Texas

For home buyers in Texas who need to finance a large purchase, a jumbo loan can be a great option. Jumbo loans offer several advantages over traditional mortgages, including:

  • Flexibility
    Jumbo loans often offer more flexible underwriting guidelines than conventional loans, making them easier to qualify for.
  • No PMI
    Private mortgage insurance (PMI) is required on all conventional loans with less than 20% down. However, because jumbo loans are not backed by government agencies, they do not require PMI, saving borrowers hundreds of dollars per month.
  • Higher loan limits
    In most counties across the country, the maximum loan limit for a conventional loan is $647,200. However, jumbo loan limits are much higher in Texas. This means that home buyers who need to finance a larger purchase can do so with a jumbo loan.
  • Access to unique property types
    Because of their higher loan limits, jumbo loans can be used to finance the purchase of unique properties that may not qualify for a conventional mortgage. This includes investment properties, luxury homes, and second homes.
  • Fixed or adjustable-rate options
    Jumbo loans are available in both fixed-rate and adjustable-rate varieties, giving borrowers the flexibility to choose the loan product that best meets their needs.

Texas Jumbo Loan vs. Conventional Loan

When it comes to financing a home purchase, potential borrowers have two main options: a jumbo mortgage or a conventional mortgage. So, what’s the difference between these two types of loans?

As it was mentioned above, jumbo mortgages are loans that exceed the maximum loan limits set by Fannie Mae and Freddie Mac, the two government-sponsored enterprises (GSEs) that buy and securitize mortgages. Jumbo mortgages come with higher interest rates than conventional mortgages, as they are seen as riskier by lenders. They may also require a higher down payment, and some lenders may impose stricter credit and income requirements on borrowers.

Conventional mortgages, on the other hand, fall within the loan limits set by the GSEs. These loans are typically easier to qualify for than jumbo mortgages and often come with lower interest rates. However, borrowers who put less than 20% down on their homes will likely be required to pay private mortgage insurance (PMI), which can add to the cost of their monthly payments.

If you are trying to decide between a jumbo mortgage and a conventional mortgage, consider the benefits and drawbacks of each option, as well as your particular situation and financial goals.

Apply For a Texas Jumbo Loan Today

At LBC Mortgage, we understand that buying a home is a significant investment. We also know that finding the right financing can be overwhelming. That’s why we offer comprehensive jumbo loan programs designed to save you time and money. Texas mortgage broker will work with you to assess long-term costs, and determine the best way to structure your loan to minimize tax liabilities.

So, if you’re looking for the best jumbo loan terms in Texas, contact us today. We’ll be happy to answer any questions and help you get the financing to enjoy your new home.

Frequently Asked Questions

  • 1. What are the jumbo mortgage rates in Texas?

    If you’re in the market for a jumbo mortgage, now is a great time to lock in a good rate. The jumbo 30-year fixed mortgage rate is 7.20%, while the 15-year rate is 6.49%. So, it’s important to keep in mind that rates could start to rise soon, and you should act asap not to miss an opportunity.

  • 2. What are the jumbo loan limits?

    Jumbo loans are not centrally regulated, which means that each lender can set its loan limits. Some lenders offer jumbo loans up to $2.5 million, while others allow loan amounts up to $3 million.

  • 3. What is the jumbo loan down payment?

    To qualify for a jumbo loan, most lenders require a minimum down payment of 20%. However, some programs allow a smaller down payment, so, it is important to compare different jumbo loans before picking one that is right for you.

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