Jumbo loans are no longer available and have not been for a few weeks. I sound like a broken record but lenders are looking for ways to mitigate risk and they individually but collectively decided to stop offering any loan amount great than $510,400 in Coconino County. The jumbo loan limit is based on county statistics and happens to be $510,400 for Arizona counties. Markets like Northern California, for example, with significantly inflated real-estate values have county jumbo limits in excess of $750,000.
What this means for your client that is purchasing a house in excess of the jumbo limits:
$650,000 purchase price
10% down – $65 K
Loan amount = $585,000 which is now a non-conforming loan amount
Cash-to-close = $75,000 plus typical closing costs
Actual Loan Amount = $510,000 (conforming loan amount)
The loan amount must be brought down below $510,400 with cash at closing/down payment.
When I am writing pre-qualification letters for a scenario like the above illustration the pre-qual is calculated on a loan amount of $510K regardless of the purchase price due to the new guidelines. Bottom line is that buyers need to put enough money down to decrease loan amount to at least $510,400.
We will see the jumbo products return to the market, just not sure when and what changes may accompany their return.
Comments (6)
-
Everything is very open with a really clear clarification of the issues. It was really informative. Your site is very helpful. Many thanks for sharing! Wren Milton Yoo
-
After looking over a few of the articles on your website, I honestly like your way of blogging. I book-marked it to my bookmark webpage list and will be checking back in the near future. Take a look at my website too and tell me how you feel. Niki Nicolai Hanae
-
I think this is a real great post. Really looking forward to read more. Fantastic. Joceline Nealson Vaios
-
Wow! This can be one particular of the most beneficial blogs We have ever arrive across on this subject. Actually Excellent. I am also an expert in this topic therefore I can understand your effort. Marcelline See Jerrold
-
What an outstanding website, genuinely joyful I came across it! Carolyne Hunfredo Oreste
-
Greetings! Very useful advice within this post! It is the little changes that produce the most significant changes. Many thanks for sharing! Anna-Maria Benji Horlacher