SPECIALTY loans: Jumbo, Combo, & Bridge loans
Jumbo Loan
A Jumbo mortgage exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac. The conforming loan limit [Effective January 1, 2025] is $806,500 for a single-family home in most of the U.S., with higher limits in some high-cost metropolitan areas.
How do I qualify for a Jumbo Loan?
Borrowers wanting to obtain a Jumbo mortgage typically have to have a higher FICO score than some other loan programs. Typically FICO scores of 700 and above are required.
Documentation for a Jumbo Loan includes:
- The most recent 30 days of consecutive pay stubs
- The most recent W-2s or 1099s for the past two years
- Two years of Personal Federal Tax Return, all schedules
- Two years of Corporate Returns, K-1s for the past two years
- The most recent 60 days of bank/asset Statements
- Hint: when underwriting Jumbo loans for approval, we HIGHLY recommend documenting reserves, i.e., 6 to 36 months or more of house payment [PITI], depending upon the loan amount.
What else should I know?
- The down payment for Jumbo Loan is typically 20% down. However, a Portfolio Loan, requiring as little as 5% down, may be an option for you. Let’s discuss!
- While the underwriting process is similar to confronting loans, please know that two appraisals may be needed instead of just one for a Jumbo Loan.
- Debt to Income Ratios are typically set 43% or less - a guideline that does not have much flexibility
- Please note that with my access to Doctor Loan Programs, we treat student loan debt with 'common sense' underwriting!
- Monthly reserves, (in terms of PITI) can be 6 to 12 months are typically required.
What other factors should I know?
- As mentioned before, the typical down payment is 20% for a single-family primary residence.
- If the Jumbo Loan is going to be used for a Condo for your primary residence, the down payment may increase to 25%
- And if the jumbo loan is for a second home, the down payment may also be 25% down and even more reserves could be required.
- First State Bank Mortgage has the ability to work with nearly a dozen different investors who offer Jumbo Loans. And, First State Bank Mortgage can underwrite most of these loan programs locally and not have to send your file directly to the Investor for their underwriting. This advantage allows us to control the complete file transition from processing to underwriting, to the final closing.
- With such a large purchase, we highly recommend that we meet early in the loan process to discuss goals, needs and options available.
Remember that each borrower's needs are different. There is not just a single 'template' for a Jumbo Loan, but instead, depending upon the borrower's needs, qualifications, there can be several Jumbo Loans a borrower can or cannot obtain. A thorough review of your file is HIGHLY recommended. Schedule a consultation to get started!
Combo Loans
When you want to purchase a home but do not have enough cash for a down payment - we can help.
This loan type typically has a combination of a first mortgage up to 80% loan to value (to avoid PMI.) And a 2nd mortgage to fill in the funds you need to purchase a home. These loans are popular when purchasing a "Jumbo Type" home requiring a 20% down payment, but can be used at any sales in the conforming loan limits too.
The combo loan may be a favorable loan for those bank customers have created large investment portfolios or have maximized the funding of their retirement account. Having a minimal amount down does not mean you can't afford a home, it just means we need to find the 'combination' for you to qualify for a larger home purchase. So, rather than have customers liquidate their assets at the wrong time in the market, our combination loan would be a great alternative solution.
Bridge Loans
Want to buy before you sell? In a competitive sellers market, a non-contingent offer may strengthen your positioning as a buyer. But, like many borrowers, you may have your equity tied up in your home.
A bridge loan is a short-term loan designed to provide temporary financing until a borrower secures permanent funding or removes an existing financial obligation. It "bridges the gap" between the sale of an existing property and the purchase of a new one.
How It Works For Homebuyers: If a homeowner wants to buy a new home before selling their current one, a bridge loan can provide the necessary funds for a down payment or full purchase. Once their old home sells, they can pay off the bridge loan.
First State Bank Mortgage wants to help you with all of your financing needs. We can show you how to pull equity out of your home and use this for a down payment on your new home purchase. Even better, we offer an interest-only loan during this short period to help you with your cash flow before your current home sells.