Do you have your eyes set on a big beautiful home but you aren’t sure that you can afford it? Are you worried that a lender won’t want to take on a the mortgage for such an expensive home? These days, lenders are willing to provide homebuyers with jumbo mortgage loans in Detroit Lakes MN if they qualify. These loans are similar with conventional loans, except for the fact that they’re usually much larger and call for higher interest rates. Let’s take a look at these loans to see if you may qualify.
Buyers should be aware that, although lenders are willing to provide jumbo mortgages, they’re a lot stricter than they used to be. We’re all aware of the market collapse that occurred in 2007. During that time homes were being foreclosed on left and right, and homeowners were defaulting on their loans to no end. Lenders are much more careful about who receives jumbo mortgage loans in Detroit Lakes MN and who doesn’t.
If you want a jumbo mortgage loan, you’ll have to be willing to pay a larger down payment. In almost every case, a lender will require that a borrower pay a down payment, but jumbo mortgages can call for an additional 5% on your down payment. This may seem unfair to some, but banks don’t want to same thing to happen to them that happened in 2007. In order to leverage any potential loss, lenders require more money up front to protect themselves.
What does your income look like? If you’re going for a jumbo mortgage loan, you’ll have to be willing to open up about your monthly or annual income. In the past, banks were much more relaxed about what kind of money a borrower made, however, the market collapse changed all of that. The value of your home should be no more than 2 or 3 times your annual income.
Borrowers will also have to be willing to sign on for a loan with an adjustable rate. Most buyers look for loans that have a fixed rate so that they can avoid higher interest costs. Unfortunately, these days banks are less willing to dole out fixed-rated loans. Currently there are very little fixed-rate options for jumbo mortgages so buyers will have to be willing to take the chance. Click here for more information.
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