If you’re looking to buy a high-value home in Savannah, you might be considering a jumbo home loan. These loans exceed the conforming loan limit of $806,500 in Georgia. But what exactly does that mean for you, and how can you benefit from low down payment options?
In this guide, we’ll cover everything you need to know about jumbo home loans, including the benefits of low down payment options and combo piggyback loans like the 80-10-10 and 80-15-5.
What is a Jumbo Home Loan?
A jumbo home loan is a type of mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). For residents of Georgia, any loan amount exceeding $806,500 falls into the jumbo category. These loans are designed for luxury homes or properties in highly competitive real estate markets.
Key Characteristics of Jumbo Loans:
- Higher Loan Amounts: Exceeds conforming limits.
- Stricter Requirements: Often require higher credit scores and lower debt-to-income ratios.
- Potentially Higher Interest Rates: Due to increased risk for lenders.
Benefits of Low Down Payment Jumbo Loans
Traditional jumbo loans usually require a 20% down payment, which can be a significant barrier for many home buyers. Thankfully, there are low down payment options available, with as little as 5% or 10% down depending on the loan amount.
Advantages of Low Down Payment Options:
- Increased Affordability:
- Helps you get into your dream home faster without needing a massive upfront payment.
- Liquidity Preservation:
- Keeps more of your cash available for other investments or emergencies.
- Easier Qualification:
- Some lenders offer flexible underwriting criteria for low down payment jumbo loans.
Understanding Combo Piggyback Jumbo Loans
Combo piggyback loans are a popular way to finance a jumbo mortgage. These typically involve two separate loans that together cover most of the home’s purchase price.
Popular Types of Combo Piggyback Loans:
- 80-10-10 Loans – 90% Financing
- First Mortgage (80%): Covers the majority of the loan.
- Second Mortgage (10%): Often a home equity loan or line of credit.
- Down Payment (10%): Paid by the borrower.
Benefits:
- Avoid paying private mortgage insurance (PMI).
- Lower overall interest rates due to splitting the loan amount. Buyers can often keep their primary first mortgage at the conforming loan limit.
- 80-15-5 Loans – 95% Financing
- First Mortgage (80%): Covers the bulk of the loan.
- Second Mortgage (15%): Usually a home equity loan.
- Down Payment (5%): Paid by the borrower.
Benefits:
- Even lower down payment required.
- Avoid PMI while having affordable monthly payments.
Steps to Obtaining a Jumbo Loan in Savannah
Step 1: Assess Your Financial Situation
- Credit Score:
- Aim for a score of 700 or higher. Lower credit score are acceptable with greater down payment.
- Income and Assets:
- Ensure you have sufficient income and assets to support a jumbo loan.
- Debt-to-Income Ratio:
- Keep your DTI ratio below 45%.
Step 2: Research Lenders
- Compare Offers:
- Look for lenders that specialize in jumbo loans and compare their terms. Just submit the Request Contact form to get a quick quote.
- Check Reviews:
- Read reviews to find a reputable lender with good customer service.
Step 3: Pre-Approval
- Gather Documents:
- Income statements, tax returns, asset statements, and credit history.
- Submit Application:
- Complete the pre-approval process to understand your borrowing capacity.
Step 4: Choose Your Loan Type
- Evaluate Options:
- Decide between a low down payment jumbo loan or a combo piggyback loan. Choose terms like secure 30 year fix rate, or adjustable rate terms.
- Consult Advisors:
- Speak with financial advisors to choose the best option for your situation.
Step 5: Close the Loan
- Final Approval:
- Submit all required documents and undergo final underwriting.
- Close the Deal:
- Sign the paperwork and finalize your jumbo loan.
Jumbo home loans can make purchasing a high-value home in Savannah more accessible. By understanding your options, especially with low down payment jumbo loans and combo piggyback loans, you can secure a mortgage that fits your needs without breaking the bank.
Ready to take the next step? Contact us 7 days a week to learn more about jumbo home loans and get expert advice tailored to your unique situation.