Here’s the scoop on jumbo home loans

July 5, 2014

After more than six years, the Jumbo Home Loan is much more available, and interest rates are very close to those of conforming home loans. Conforming loans go up to a $417,000 loan balance. Jumbo loans come into play over that amount.

If you have been contemplating refinancing your jumbo loan or need to combine two liens and have been waiting for it to make sense, now is the time.

Loan to values up to 75 percent are available up to a maximum of $1.5 million. This is for a rate/term refinance and requires a credit score of at least 700. Debt-to-income ratio is limited to 43 percent. Loan terms are 15 and 30  years.

One appraisal is needed for loan amounts up to $1 million and two are required for over $1 million.

Borrowers must have cash reserves as follows: six months housing payment for a primary home under $1 million and nine months payments for over $1 million; 12 months housing payment for a second home under $1 million and 18 months payments for over $1 million.

All financed properties other than the subject property require an additional six months housing payments for each additional property.

Borrowers must have at least a 24-month housing payment history of no late payments. Past bankruptcy; Chapters 7, 11 and 13; foreclosures; short sales; deed-in-lieu; and loan modifications are not allowed.

If you want to pull cash out with your refinance, the loan-to-value is limited to 65 percent up to a loan amount of $1 million and 60 percent over that up to $1.5 million.

Minimum credit scores for the cash out refinance is 700 up to $1 million loan amount and 740 for loan amounts over $1 million up to $1.5 million. Maximum cash back to the borrower is $250,000.

Example of a payment based on rates from June 3, 2014: $700,000 loan amount and $1.2 million value, 30-year fixed rate at 4.625 percent, 45 day lock, 780 credit score equals a principal and interest payment of $3,600.

JoAnn Moore is president and owner of The Mortgage Market of Delaware LLC. She is a Licensed Mortgage Professional and a Certified Military Housing Specialist. Call the office at 302-855-1306, cell 302-236-1229 or email