​Jumbo Loans

Looking for a jumbo loan around the Colleyville, Southlake or Flower Mound areas? Don’t panic, King Financial can help you!

Jumbo mortgages are non-conforming loans that possess a value greater than the costs that apply to conforming/conventional mortgages. They are also not sponsored by Fannie Mae or Freddie Mac. The above-mentioned areas are where King Financial excels with its services, which have a conforming limit of $417,000 for a single-family housing unit. 

Jumbo loans are largely funded by big banks. Outside investors sometimes do purchase jumbo loans from the secondary market in assortments that are secured. Lenders can also decide to manage them for their own private records. 

Prominently used for loans needed for luxury homes, jumbo mortgages are typically more expensive to refinance since their closing costs are tallied as percentages of the total amount of a loan. 

Interest rates and down-payment requirements are higher with jumbo mortgages, as they are risky to award. Lenders often prefer borrowers to make a 20% down payment or to have a minimum of 20% equity when refinancing. It should be noted, however, that some lenders do accept a 10% down payment. 

Borrowers utilizing jumbo mortgages should expect their credit history and income records to be thoroughly reviewed and scrutinized by lenders. Credit-score requirements can vary lender to lender, though a score of 680 is typically needed to qualify.

Since a lender will be looking to verify a borrower is in possession of the needed income and assets to repay the loan, they will require pay stubs, W-2 forms, liquid-asset verification and bank statements to be provided. 

Many jumbo loans are “qualified mortgages”, so borrowers shouldn’t possess a debt-to-income ratio of more than 43%. Qualification is still possible for a borrower who exceeds this limit, as they can qualify for a non-qualified mortgage if a lender can verify the loan will be repaid appropriately. 

Jumbo loans are allowed to be used for single-family and for multi-unit buildings up to four units. New homes and existing properties can be obtained by borrowers. Second home and investment properties can also be acquired through jumbo loans, although receiving funding for those types of properties can present a more strenuous challenge to borrowers. 

Mortgages for jumbo loans can be at either a fixed or an adjustable rate. Standard repayment periods are 15 or 30-year options. Among those pair of mortgage options, fixed-rate mortgages are the most prominently used due to being easier to understand by borrowers. Principal balance and interest payments are made as monthly installments, which remain the same throughout the term.

As opposed to fixed-rate mortgages, adjustable-rate mortgages (ARMs) feature lower early installments for borrowers than their counterparts. ARMs are ideal for the short-term, but borrowers should be aware of their significant increases as their term moves forward. 

Call King Financial at (972) 539-2500 today to begin obtaining your jumbo loan!

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