What is a Jumbo loan in Texas?
A Texas Jumbo Loan is a loan that exceeds the maximum loan amounts of a conventional loan, according to Fannie Mae and Freddie Mac loan limits. Rates on Jumbo Loans are typically higher than conventional conforming loans. Jumbo Mortgage Loans generally are used to buy more expensive homes and high-end custom-construction homes. These larger loans also require a higher down payment than traditional loans. Effective January 1, 2022, the conforming loan limits increase. Anything above the conforming loan limit is classified as Jumbo Mortgage.
Jumbo Loan Limit
The new jumbo loan limits in Texas, effective January 1, 2022, are as follows according to the Federal Housing Finance Agency (FHFA):
- 2,916 counties remain at $647,200;
- 108 counties have loan limits of $679,650 for one-unit properties. These counties are considered the highest-cost housing market areas. They include New York City, San Francisco, and Los Angeles;
- 115 counties are between $679,650 to $1,019,475. These areas are considered to have higher than normal prices but not as high as the above-mentioned counties. The maximum loan amount for properties NOT in Alaska, Hawaii, Guan & US Virgin Islands, is $679,650, effective January 1, 2022. However, for properties in Alaska, Hawaii, Guam, and the US Virgin Islands, the new loan limit is $1,019,475.Additional information about Jumbo Loans is available with classifying risks and costs.
Types Of Jumbo Loans
Here are the types of Jumbo Loans in Texas:
Purchase Jumbo Loan
TheTexasMortgagePros.com offers Jumbo Loans with attractive rates at a low cost to the borrower. Our Jumbo Purchase Loans in Texas are very competitive and easier to qualify for compared to big banks. While other lenders are falling short on Jumbo Loans, we open our door to lending Jumbo Loans
Refinance Jumbo Loan
- Rate and Term Jumbo refinance – a Jumbo rate and term refinance either: (a) converts an adjustable-rate mortgage (ARM) loan to a fixed-rate loan or (b) lowers the current interest rate, resulting in lower monthly payment and savings over the life of the loan.
- Home Equity Jumbo refinances – allows the borrower to take out a new Jumbo Loan amount higher than the current one and have the difference paid to the borrower at closing. The borrower taking advantage of home equity jumbo refinance can use the extra money for home improvement, debt consolidation, or investing the equity pulled out to other investment tools.
- Custom line of credit – Just like the home equity Jumbo refinance, refinancing a Jumbo Loan to a custom line of credit is used to pay other important expenses. The borrower can use the line of credit to pay for college tuition, pay medical bills, make home improvements or use the money for other investments.
Jumbo Loan Requirements
Here are the Jumbo Loan Requirements in Texas:
Here are the Jumbo Loan Qualification Requirements in Texas: Credit score requirement is typically higher; a minimum of 680 middle credit score is required. The typical Jumbo Mortgage borrower has a middle FICO score of 740 and above. It’s not uncommon for credit unions and lenders to see a jumbo borrower’s credit score in the upper 700s to low-mid 800’s when originating a Jumbo Loan.
A Jumbo Loan may also require jumbo borrowers to provide bank statements to lenders to prove that they have the capacity to follow the payment schedule. Lenders may also require cash reserves to pay for the closing costs. Closing costs are around 3% -6% of the total property value.
Jumbo Loan Interest Rates
Jumbo Loan Interest rates are usually higher compared to Conforming Loans. Jumbo Loan mortgage rates are usually available in a variety of forms, such as fixed-rate loan and adjustable-rate mortgage (ARM) loan options. There are also interest-only loans (HELOC or HELOAN) or temporary buy-downs. With interest-only option loans (HELOC or HELOAN), a borrower cannot build equity through monthly interest-only payments. In order to build equity, a borrower has to make voluntary principal payments during the interest-only period when making payments. The line of credit (HELOC or HELOAN) has a variable interest rate (ARM) which may increase or decrease the monthly payment as interest rates fluctuate. The borrower can convert a portion of, or all of, the outstanding lines of credit to a fixed rate amortized in a 5 – 20-year loan term.
Jumbo Loan Loan-to-Value Ratio
The Jumbo Loan loan-to-value ratio in Texas is as follows. At a minimum, a Jumbo Loan borrower is required to come up with a 10% down payment; but more often, 20% is required to qualify for a Jumbo Purchase Loan. This is usually looked at on an individual basis since a borrower’s situation for Jumbo Loans varies from one borrower to the next. Some borrowers will be required to come up with a 25% – 30% down payment depending on their situation, credit score, DTI, and type of property being purchased. For details about Jumbo Loans, jumbo financing, and other non-conforming loans, contact our Home Loan Specialists at (877) 280-4833.
All loans are subject to underwriting or investor approval. Other restrictions may apply. This is not an offer of credit or a commitment to lend. Guidelines and products subject to change.