jumbo loan question

daaw1September 18, 2009

I contacted a bank the other day asking about a jumbo loan. The following was the reply, "On Jumbo Loans which are anything over the conforming limit of $417,000, the minimum credit score is 720 and the maximum LTV is 80%."

Is this universal or do all jumbos require an LTV of 80%?

I wanted to do around 3% on a 550k loan.

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brickeyee

You want a 550k loan and only have $16,500 to put down?

Better keep looking for a cheaper house, especially in the mortgage market today.

    Bookmark   September 18, 2009 at 5:15PM
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daaw1

My question had to do with the LTV of jumbos. No one said I only had $16,500.00 available to put down. I could in fact put over 20% down but WHY would I?

Now that you mention it, why would ANYONE put 20% down on a house in this market IF it's not needed? I would rather have the mortgage company take the risk if they are willing.

    Bookmark   September 18, 2009 at 5:44PM
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dave_donhoff

Hi daaw,

I have been successful in securing up to 90% LTV on Jumbo purchases up to $1.5MM... its doable (but not at 3%.)

Further, depending on the location of the property (the "MSA" or the zip code, if it is determined as "high cost") you *may* be qualified for 'Conforming Jumbo' which ranges from $417,001 to as high as $729,750. Each high cost area has different maximum levels.

Cheers,
Dave Donhoff
Leverage Planner

    Bookmark   September 18, 2009 at 7:10PM
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brickeyee

"I would rather have the mortgage company take the risk if they are willing."

Risk costs money,

That is why jumbos are a fraction of a point above conforming in most cases.

    Bookmark   September 18, 2009 at 7:25PM
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daaw1

brickeyee,

"Risk cost money"

agreed, I just have a hard time with the thought of putting over 100k down on a 550k house.

Dave,

exactly what I needed to know...that less than 20% is possible.

    Bookmark   September 18, 2009 at 8:00PM
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brickeyee

"I just have a hard time with the thought of putting over 100k down on a 550k house."

You are going to find the lenders have a similar viewpoint, especially given all the recent 'issues' in the secondary mortgage market and the increase in foreclosure rates.

The lender wants to make sure the borrower has enough 'skin' in the game to not walk away, and if the borrower does default that they can actually sell the property for the mortgage balance.

If you want to purchase expensive real estate, get used to large numbers.

    Bookmark   September 19, 2009 at 10:48AM
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