A jumbo loan is larger than the typical mortgage loan and requires larger down payments, higher interest rates, and more complexities. If you are diving into the luxury real estate market in Sun Valley or Ketchum, Idaho, a jumbo loan may be a path you need to take to secure your property.
6 Things to Consider Before Entering into a Jumbo Mortgage Loan
A jumbo mortgage loan is different from a conventional loan because the government will back a traditional loan, which originated from a program meant to help the working class. Here are some hoops you may need to jump through to secure a jumbo loan:
1. Finding a Lender:
Not all lenders will offer jumbo loans. Because the government does not guarantee them, you will have to find a lender willing to enter a jumbo loan agreement with you.
2. Conforming Loan Limit in Your Area:
For 2021, the jumbo loan limits were updated. In most of the United States, the limit is $548,250 before it is considered a jumbo loan. The jumbo loan limit for Blaine county Idaho is $625, 000.
3. Higher Credit Score:
For jumbo loans, they require an even higher credit score to determine that you have a good history with money and will be able to pay back the loan.
4. High-Interest Rates:
You can expect to pay higher interest rates when you take out a jumbo loan. The lender is taking a risk, and so they will ask for a higher interest rate.
5. More Cash-on-Hand:
It is common to require a more significant down payment for jumbo loans. And for small business owners, a lender can require proof of reserve payments for up to 6 months.
6. Second Appraisal:
Oftentimes, you will have to undergo a second appraisal to ensure that your home is valued at the high price determined in the first appraisal.
Many investors take the jump into the luxury real estate market with huge pay-offs. Their initial investments included taking out jumbo loans and adhering to these rules. If you are interested in taking out a jumbo loan, now you have the knowledge to get started.
Contact Luxury Real Estate Experts
For any questions regarding real estate and loan limits, contact our experienced team! Give Kirsten DeHart a call at Wood River Properties to explore luxury real estate opportunities in beautiful Sun Valley: (208) 721-4131.