Jumbo Loan Maricopa County Arizona: What You Need to Know
If you're looking to buy a high-priced home in Maricopa County, Arizona, you may need a jumbo loan. A jumbo loan is a type of mortgage that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac.
In Maricopa County, the conforming loan limit for 2021 is $548,250. If your desired home price exceeds this amount, you'll need to apply for a jumbo loan.
Here's what you need to know about getting a jumbo loan in Maricopa County:
Higher Credit Score Requirements
Because jumbo loans are riskier for lenders than conforming loans, they typically require higher credit scores from borrowers. To qualify for a jumbo loan in Maricopa County, most lenders will want to see a credit score of at least 700.
However, some lenders may be willing to work with borrowers who have lower credit scores if they have other compensating factors such as significant assets or stable income.
Larger Down Payment Required
Jumbo loans also usually require larger down payments than conforming loans. While conventional mortgages often allow down payments as low as 3%, many jumbo lenders require at least 10% or even 20%.
This means that if you're buying a $1 million home in Maricopa County with a typical 20% down payment requirement on your jumbo mortgage, you'll need to come up with $200,000 upfront.
More Stringent Income Verification
To ensure that borrowers can afford their monthly payments on large mortgages like these ones offered through Jumo Loans LendingTree , most lenders will scrutinize income documentation more closely than they would for smaller loans.
Expect requests for tax returns and pay stubs going back several years along with verification of any additional sources of income such as rental properties or investments. Some banks may also require a minimum amount of cash reserves to be held in an account after closing.
Higher Interest Rates
Jumbo loans often come with higher interest rates than conforming loans. This is because lenders are taking on more risk by lending larger amounts of money, and they want to be compensated for that risk.
However, the difference in interest rates between jumbo and conforming loans has narrowed in recent years. In some cases, borrowers can even find jumbo loan rates that are lower than conventional mortgage rates.
Choose Your Lender Carefully
Because jumbo loans are not backed by Fannie Mae or Freddie Mac, there's less standardization among lenders when it comes to underwriting guidelines and qualification requirements. That means you'll need to shop around carefully to find a lender who offers competitive terms and will work with your unique financial situation.
It's also important to choose a lender who has experience working with jumbo mortgages specifically. These types of loans can be more complex than traditional mortgages, so you'll want someone on your side who knows what they're doing.
In conclusion, if you're looking to buy a high-priced home in Maricopa County Arizona , getting a Jumo Loan could help make your dream home become reality but keep these points mentioned above in mind before making any decisions about financing options.
