Jumbo Loan Question

[Samantha Zanotelli]

Is there anybody offering 10% down on Jumbo Loans in Southern California..

I was told that this isn't possible right now and that given the current market most people want to see 12 months of reserves. Was curious what others have to provide for information on this and if they have seen 10% down on jumbo loans for a first time home buyer.

[Miranda Holland]

Quote from @Samantha Zanotelli:

Is there anybody offering 10% down on Jumbo Loans in Southern California..

I was told that this isn't possible right now and that given the current market most people want to see 12 months of reserves. Was curious what others have to provide for information on this and if they have seen 10% down on jumbo loans for a first time home buyer.

 You’re right—commercial lenders are tightening up their guidelines, and it’s becoming harder to find 10% down on jumbo loans, especially with the current market conditions.  I'm sending you a connection request. 

[Jeff Chisum]

What do you consider Jumbo? What purchase price are you looking at.  What type of property?

[Melvin List]

I would reach out to a broker in your area. They will have a Jumbo product with 10% down with no reserve requirement up to $2,000,000

[Brandon Croucier]

Similar products are out there, non conforming full doc loans might just be your best bet.

What part of California are you looking at?

[Dave Skow]

@Samantha Zanotelli- depending on the price and loan amt needed - there are lenders / programs that allow 10% for a jumbo loan scenario ...the payment reserves  requirement will likely be 12-24 months of payments  and you are able to use part of any retirement account balance to meet this requirement 

[Jacqueline Wright]

Hi Samantha!

Yes, there are lenders that offer 10% down on jumbo loans, but it often depends on a few key factors:

1. Market Conditions:

• Given the current market, many lenders are tightening their requirements, especially for jumbo loans. Some lenders may still offer 10% down, but they might require strong compensating factors such as excellent credit, higher reserves, or a low debt-to-income (DTI) ratio.
• The requirement for 12 months of reserves is common with jumbo loans right now, especially in Southern California, where property values are high.

2. Credit Score:

• For 10% down, lenders usually expect a credit score of at least 720 or higher. The better your credit, the more likely you'll be able to access a lower down payment option.

3. Reserves:

• Most lenders will ask for 6-12 months of reserves to ensure that you can cover mortgage payments if you face financial hardships. These reserves can typically be in liquid assets, including cash, stocks, or retirement funds.

4. First-Time Home Buyer:

• Some lenders might be more conservative with first-time home buyers, asking for higher down payments or additional reserves. However, if you have strong financials and good credit, you may still find options.

5. Lender-Specific Programs:

• Some non-bank lenders or credit unions might offer more flexible jumbo loan options, including 10% down. It’s worth shopping around and asking different lenders about their specific jumbo loan programs.

Recommendations:

• Shop around and contact specialty mortgage brokers or credit unions in your area that might have more lenient jumbo loan programs.
• Ensure you have at least 12 months of reserves ready in case the lender requires it. Even if you find a 10% down program, having reserves will still improve your chances of approval.

While the market is a bit more challenging for jumbo loans with lower down payments right now, it’s definitely worth exploring different lenders. Some may offer more flexible terms, especially if you have strong financials overall.

[Stacy Raskin]

There are jumbo loans that have 10% down payment options if the credit score is 680 and above for a $2 million or less loan amount. This program applies to single family homes, condos, 2-4 units and PUDs. The program requires the debt to income (DTI) ratio to be 45% or less when comparing overall eligible monthly income to debt.

Loans are underwritten by Fannie Mae’s Desktop Underwriter (DU) or Freddie Mac’s Loan Product Advisor (LPA) which based on the loan application will decide on reserves needed. 

DU and LPA are automated underwriting systems (AUS) is used to assess mortgage applicants' eligibility. This is done by comparing the information on the loan application to the guidelines. The loan application information is then verified during underwriting by income documents such as pay stubs or tax returns. 

Happy to connect to discuss further.