Jumbo loans often require a large down payment, sometimes as high as 20% just to qualify for the financing. Unfortunately, this creates a massive hurdle for many would-be buyers, but San Diego Purchase Loans can help. By offering jumbo loans with low down payment requirements, you can purchase an excellent home without the massive initial cost.
This program actually allows you to qualify for a jumbo loan with as little as 5% down on a loan up to $2 million! This allows a qualified borrower to purchase a property with a price as high as $2,105,263. If you bring a down payment of 10%, you could receive up to $3 million in financing!
Top-Quality Minimum-Down-Payment Jumbo Loans from SDPL!
100% of the Down Payment Can Come from a Gift
Possibly the biggest advantage of this option over other jumbo loan programs is that 100% of the down payment and the reserve requirements can come from a gift if you reach the 10%-down milestone. You’ll have a hard time finding any other jumbo loan program that offers such excellent terms! Essentially, this means the reserve requirements of nine months can be deposited into your account during the underwriting process, and it will still meet the requirements for this program. Also, there are no sourcing or seasoning requirements for the program, which adds to the convenience of the approval process.
No Mortgage Insurance
Another significant advantage, although one that is slightly tempered by other factors, is no mortgage insurance on the loan. The program does, however, include lender-paid insurance, and this is factored into the interest rate, but not having borrower-paid insurance is a unique advantage. This is especially important for homebuyers because a HELOC used to purchase a property is no longer tax deductible, and if your household income is above $100,000 for joint filing or $50,000 individually, monthly mortgage insurance is not tax deductible.
Limited Payment Reserve Requirements
Most people are familiar with the down-payment requirement, but when dealing with jumbo loans there is also a requirement for financial reserves. Essentially, these need to be held by the borrower as a safety net for financial problems. This loan program is unique because it offers only nine months of reserve requirements. Basically you need to have cash reserves to support the loan payments for nine months, while other programs may require reserves equalling as much as two years worth of reserves. Best of all, you can use this nine-month requirement on a loan up to $3 million, which make it enormously beneficial to high-income earners who may not have liquid financial reserves sitting in a bank account.
Cash-Out Options Allowed
You can also use this program for cash-out refinancing on a primary residence, and it can be used for up to 95% of the home’s value for a loan amount up to $750,000. This may not be as substantial as the $3 million we discussed above, but it’s still a large amount for cash-out refinancing, and 95% is an extremely high percentage for a cash-out loan.
To give this a little perspective, let’s look at a typical jumbo investor, such as Wells Fargo. This national company will only allow the borrower to use a 70% LTV on the cash-out of their primary residence.
Typically, if a homeowners wants to take out a 95% value, they will need a second mortgage, which is usually a Home Equity Line of Credit. While there is a small amount of lenders that will allow for a 95% cash out (usually these are credit unions), the loan is fully adjustable and has an interest rate that is determined by the prime rate (around 5.5% currently) and will have an additional margin of 2.75%, which means a blended interest rate of 8.25%.
Multiple Purchase Options Available as Well
With this loan program, you’ll also have plenty of options. While other programs only allow for a purchase of a primary single family home, this program allows you to also purchase a condo or PUD.
Non-Warrantable Condos Available
When you work with us for this jumbo loan program, you can actually get a loan for a warrantable or non-warrantable condo, which is virtually unheard of in the mortgage-lending industry, but it’s a service we are proud to offer.
Numerous items can impact the warrantability of a condo unit, but many are allowed through San Diego Purchase Loans. For example, the subject property must be 100% residential, but legal conforming and legal non-conforming are allowed as per Fannie Mae’s guidelines. The units must be at least 475 square feet, and less than 50% of the properties can be owned by a single person or entity.
First-Time Homebuyers Welcome!
This program also does not discriminate against first-time buyers, a group that often has trouble with financing. Some jumbo loans have limits built in specifically for people who are purchasing their first home, but this is not the case here.
Other Important Distinctions for Our Minimum-Down-Payment Jumbo Loans
This program will allow for restricted-stock units as income if certain conditions are met, and there are owner-occupied and second-home designations for borrowers. Payment reserves are calculated on the subject property and other properties are not required for calculation, which is another important advantage for the program.
There is also bankruptcy restriction that you should be aware of. If you have had a bankruptcy, you will need to wait at least four years to qualify for this option. This goes for short sales and foreclosures as well. Many actually require seven years, so this could actually allow you to purchase a home when other programs won’t.
There is no limitation on lot size, but the land value of any property over five acres can’t exceed 35% of the total value for the property. This is another important change from other jumbo loan programs that typically limit the number of acres to five or ten.
If you want to learn more about these jumbo loans, contact San Diego Purchase Loans today to get all the information you need on applications and qualification.