Jumbo loan financing is slowly making a comeback, which is good news for Southern California home owners and buyers. Since mid 2007, when the Mortgage Backed Securities market collapsed, taking “nonconforming” financing along with it, Jumbo financing has been difficult. Although Fannie Mae and Freddie Mac increased the Conforming loan limits, in many areas to $729,750, this still left a good number of high cost areas in a tough position.
A Few Jumbo “Niches” For Southern California Home Buyers
Although loan underwriting guidelines remain tight, there are some “niche” programs available through some smaller, local banks and mortgage bankers/brokers. For example, sometimes in order to get a great deal on a home, the buyer will pay all cash so they can close escrow quickly. But they would still like to have a loan on the property. A new Jumbo program will work perfectly in this situation. The lender will allow an “all cashout refinance” up to 75% of the properties value, up to a loan amount of $3,000,000. This means a southern California home buyer can purchase a home for $4,000,000, pay all cash, and then refinance immediately for a new loan of $3,000,000.
Also, while most Jumbo lenders require FICO scores over 740, and in some cases over 760, some Southern California Portfolio lenders will fund Super Jumbo loans at loan to values of 75% on $3,000,000 loans with FICO scores at 680 or lower.
Piggy Back Jumbo Mortgage
A few years ago the “piggy back” loan program was fairly common. A piggy back occurs when there is a 1st mortgage combined with a concurrent 2nd mortgage, allowing the home buyer to purchase a home with either less down payment, or more favorable terms because of the low loan to value on the 1st mortgage. For example, another southern California Jumbo lender is offering a “piggy back” Jumbo program on a purchase price up to $1,225,000, with a combined loan to value of 80%. The first mortgage is at the maximum high balance Conforming loan limit of $729,750, which the equity line 2nd mortgage is $250,000.
Jumbo Loans for Investors
Some Portfolio lenders are even offering fairly aggressive financing options for investors. A local southern California Portfolio lender will go as high as 60% of the investment properties value on loan amounts to $3,000,000. There are hints of more aggressive programs to come in 2011. Don’t expect to see “stated income” any time soon, but at least with these Portfolio programs, the underwriting criteria is more flexible that anything we’ve seen in a few years. A few other new “niche loan programs” include the Asset Depletion loan and the Pledged Asset mortgage loan.
Authored by Tim Storm, an Orange County, CA Loan Officer – Please contact my office at Trust One Mortgage for more information about an Orange County, CA home loan. 877-786-4243 x 7.
Contact us for your Orange County Jumbo Mortgage:
Call our office today and see how we can help you and your family. Also, rates are very low for the Jumbo Mortgage program.
877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com
*Trust One Mortgage Corporation is licensed and supervised by the California Department of Real Estate (“DRE”), License # 01087829
We are not the FHA, VA, USDA, HUD or any other government organization. The content on this blog is intended for information purposes only.