If you are shopping around for a jumbo loan, you likely are buying a home with a price higher than conforming loans. Fannie Mae and Freddie Mac do not guarantee jumbo loans, which means the application can be extra challenging. For instance, you can expect to pay for higher jumbo mortgage rates.
In this post, we revolve our discussion on jumbo mortgage rates, San Diego. In particular, we tackle the following factors affecting the rates:
Not backed by Fannie Mae and Freddie Mac
Homes that exceed the local conforming limits cannot qualify the backing of Fannie Mae and Freddie Mac. Established by the US Congress, these entities help the market become more liquid, stable, and affordable. Because the said institutions do not guarantee jumbo loans, they tend to have fewer buyers. That results in less liquidity and pushing the jumbo mortgage rates, San Diego, higher.
Like in conforming loans, those who have high credit scores usually get the best deals on jumbo mortgage rates, San Diego. Some lenders may require a FICO score as high as 720. So, it makes sense to improve your credit score to meet such a number or higher if you want to get the best deal in town.
The loan-to-value ratios
LTV score represents the value of the property compared with how much to borrow. Many lenders require an LTV not greater than 80%. You can achieve that by putting a downpayment no smaller than 20%. In other words, the higher the down payment, the better the chances of approval with better interest rates.
Location of the property
Many lenders may offer varying interest rates from one location to another. So you have to make sure that you consider location in your application. If you are getting a home in a prime location, expect higher jumbo mortgage rates versus buying a property in a rural area.
Several other factors affect jumbo mortgage rates, so make sure you sit down with your broker to ensure you cover these factors before accepting any mortgage deals.
Online looking for a reputable mortgage company to help you in your jumbo loan application? Talk to a mortgage expert at HomePlus today.
Call us at 800-810-PLUS (7587) for your inquiries.