Jumbo Loans for High-Cost Properties in Dallas, Houston, Austin, San Antonio, TX & Beyond
Many homes throughout the Dallas metropolitan region and the state of Texas can be purchased with conventional financing.
But for certain high-cost properties, conventional financing may not provide sufficient funding to cover the price of a home.
That is when it is time to apply for a jumbo loan instead.
What is a jumbo loan?
Put simply, a jumbo loan is a loan that is bigger than the conforming loan limits Federal Housing Finance Agency (FHFA) has set for that year.
Every year, the FHFA sets the conforming loan limits for Fannie Mae and Freddie Mac.
Within those limits, it is possible to use conventional financing to purchase a home.
But if the price of a home is above those lending limits, one needs to qualify for a jumbo mortgage instead.
When do you need a jumbo loan to buy a property?
To know whether you need a jumbo mortgage, you need to be familiar with the conforming loan limits that cap off conventional financing.
The limits differ from county to county, but in 2022, the limits for Dallas County are the same as those for the majority of counties throughout the country:
Note that these are the 2022 conventional loan limits, which are higher than those for 2021. These limits have gone up every year for the past few years. That means that there are some properties that you may now be able to purchase using conventional financing which you would have needed to get a jumbo loan for last year.
Always make sure you know the current year’s conventional loan limits before shopping around for properties. You may be surprised at how much a conventional loan can cover!
How do you qualify for a jumbo loan in Texas?
If you do need to use a jumbo mortgage to finance the purchase of a home, here are the requirements you will need to meet:
- Your credit score and debt-to-income (DTI) ratio must be very competitive, even more so than if you were applying for a conventional mortgage. After all, you’re asking to borrow a lot of money!
- You must be able to produce documents that prove at least two years of steady employment on a solid career track.
- In some (but not all) cases, you may need to place more money down on the home than you would with a conventional loan.
- The value of your assets and cash reserves to date will be evaluated as part of your application. The more of either or both you possess, the more competitive your application will be.
You do not need to be a repeat homebuyer to apply for a jumbo loan. You can purchase your first home with a jumbo mortgage. You just need to meet the qualifications.
When you apply for a conventional mortgage, one of the requirements is to get an appraisal of the property.
That remains a requirement when applying for a jumbo loan, but you may need to get two appraisals, not just one. Again, you’re asking for quite a bit of money, so the lender needs to be absolutely sure they’re making a good investment.
How expensive are jumbo loans?
Homebuyers are sometimes concerned that the interest rates for jumbo loans will be too high to afford. But your interest rate depends on your eligibility. If you’re able to put together a strong application, you may qualify for interest rates that are close to conventional mortgage interest rates.
Interested in taking out a jumbo loan? Call us now.
If you are interested in learning more about purchasing property with a jumbo loan, contact Stonebriar Mortgage now to schedule a free consultation! Based in Dallas, TX, our certified team is proud to serve clients throughout the Dallas, Texas Metropolitan area.