The best mortgage lenders in Dallas provide a range of loan options to help customers in different circumstances. One type of loan you might need when looking to buy a home is a jumbo loan. Below, we’ll explain what a jumbo loan is, how it compares to a conventional loan, and what you’ll need to be eligible for a Dallas jumbo loan.
What Is a Jumbo Loan?
A jumbo loan is a type of mortgage that you can use to finance a property. Lenders use jumbo loans when the property is too expensive for a typical conforming loan. The Federal Housing Finance Agency determines the maximum amount for conforming loans, which is $726,000 in most counties, including Dallas. If you wish to buy a property that exceeds this amount, you would need to apply for a jumbo loan.
Jumbo Loans vs. Conforming Loans
Jumbo loans, also known as nonconforming conventional mortgages, differ from conforming loans in a few ways besides the aforementioned borrowing limit. One difference is that jumbo loans cannot be guaranteed by Fannie Mae and Freddie Mac, which makes them riskier for the lender. As a result, jumbo loans may have stricter requirements to help protect the lender. For example, the lender may require that you have a certain amount of cash available to make it less likely that you’ll default on the loan.
Eligibility for a Dallas Jumbo Loan
To obtain a Dallas jumbo loan, you’ll need to meet a few requirements from Dallas mortgage lenders. One of the first things the lender will look at is your credit score. While lender requirements vary, expect to need at least a 700 rating on your credit score.
The lender will also look at your debt-to-income ratio. This is the amount of debt in your name, compared to your annual income. Lenders look at this amount to ensure that you’re not overleveraged and taking on too much debt. Again, the amount can vary from lender to lender, but a common maximum debt-to-income ratio is 45%.
The last major factor that lenders look at is your cash reserves. If you have a sizable amount of money in the bank, lenders are more likely to approve your jumbo loan application. Having at least one year’s worth of mortgage payments in cash is a common requirement from Dallas mortgage lenders when it comes to jumbo loans.
If you think you meet all of these requirements, you’ll need to provide documentation to a jumbo loan lender that proves it. Some documents you’ll likely need are your tax returns, bank statements, and information on any investment accounts. The lending provider can give you more information about the specific documents they require.
Learn About Dallas Jumbo Loans at The Tuttle Group
If you want to work with one of the best mortgage lenders in Dallas, look no further than The Tuttle Group. We offer a wide variety of loan services to Dallas residents, including VA loans, FHA loans, and jumbo loans. To learn more, contact us today and let us know what type of loan you’re looking to secure.
