Living in a luxury home is a dream by many. However, not everyone has the means to purchase an expensive property. Banks offer higher mortgages, called jumbo loans, for qualified buyers to help them get their dream house in a high-priced real estate area. But then, qualifying for this type loan is tougher than applying for a traditional mortgage.
If you have plans to purchase a luxury house through the help of a jumbo loan, here are the things you need to qualify:
According to PrimaryResidentialMortgage.com, jumbo loans may start at around $400,000 and they can go high as much as $2,000,000. Because of the high stakes, you’ll need to prove that you have the income that can cover the loan payments. It would also be better if you have liquid assets so that the proof of your ability to pay is much stronger.
Apart from submitting proofs of your income and liquid assets, you may also need to provide documentation on other loans you hold to qualify for jumbo loans. If you have non-liquid assets, you need to provide documentation for those too. Since the jumbo loan offers a higher amount than traditional mortgages, it is normal for banks or lenders to ask for a lot of proofs that you can really comfortably repay the loan.
High Credit Score
Unlike conventional mortgages, you’ll need at least 690 credit score to qualify for jumbo loans. Some loan providers even require a higher score for approval. So if you’re eyeing that beautiful house in Park City, you’ll need to increase your credit score.
Though qualifying for jumbo loans is quite difficult, this type of loan can reward you with a property that you’ve always been dreaming of. So, it is only fitting that you have your finances in order before you apply for a jumbo loan.