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Stonebriar Mortgage

Stonebriar Mortgage

Nationwide High Balance Loans

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Nationwide high balance loans are a great option for homebuyers looking to finance a higher priced home. They can also be used for current homeowners wanting to refinance. This loan is a jumbo loan. Many receive a great 30-year fixed rate without having to meet strict underwriting requirements normally used on large mortgages. This week, Stonebriar Mortgage teaches Dallas, TX and California homeowners about the benefits of using Nationwide High Balance Loans.

Requirements for Nationwide High Balance Loans

Nationwide High Balance Loans are a type of jumbo loan. This loan exceeds conforming loan limits set by Government-Sponsored Entities (GSEs). Many counties in California and Dallas Texas have high value homes on the market that may require non-conforming loans. The Federal Housing Finance Agency (FHFA) sets conforming loan limits annually. Approval for refinancing using a Nationwide High Balance loan, therefore, is also impacted by the annual limit. If looking to refinance using this product, note that the loan must have met conforming limits at the time it was sold to Fannie Mae. Properties can be one- to four-units, condos, co-ops, or manufactured housing.

How to Qualify for a Nationwide High Balance Loan

If you are looking to gain approval for a Nationwide High Balance Loan, it is best to meet the below criteria:

  • A credit score of at least 620 or more. The lower credit scores may lessen the amount of funds approved.
  • A maximum 80% loan-to-value amount.
  • A debt-to-income ratio of less than 43%.
  • Use of the loan for a primary or second home.
  • Provide ample income documentation, but less documentation than for a jumbo loan.
  • Provide the down payment required by the lender, though many do not usually ask for 20% like with a jumbo loan.

Pros and Cons of Using Nationwide High Balance Loans

With Nationwide High Balance Loan approvals, some lenders prefer to avoid using manual underwriting. Some interest rates tend to be higher than for conventional loans. This is because you are asking for more money, so the loan carries more risk for a lender. There are lower limits on this loan than with a jumbo loan. If you need more than a nationwide high balance loan can offer, you may have to re-apply for a jumbo mortgage. A higher loan amount or lower credit score may increase your interest rates. However, if you have great credit, they may allot you a higher debt-to-income ratio than 43%. You also do not need traditional income documents required by other programs.

Stonebriar Mortgage will help you accomplish your homeownership goals in Dallas, TX or California. We work with customers of all types and enjoy helping investors. Contact our team today and discuss the many benefits of using a Nationwide High Balance Loan.

What Are Portfolio Loans?

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When a bank decides not to sell a loan on the market, they are keeping it in their portfolio. This is known as a portfolio loan. Banks choose to do this so that they can profit from all the interest as payments are applied. Portfolio loans may also give the company more control over the terms of their loan program. This may be helpful if you cannot qualify for a more conventional source of financing. Read on to learn more about why you want to take advantage of this program. Contact Stonebriar Mortgage for your home purchase needs in the Dallas, Texas or California market.

The Portfolio Loan Application

Check with the bank who provides the loan for their specific application process. Many banks use automated underwriting software. If you lack the traditional documents to meet the automated standards, then a manual underwriting process may be best. Show your worth as a borrower through business assets or investments. Many small banks operate portfolio loan programs to attract an entrepreneurial or investment-savvy borrower into their business. For this reason, they may offer you better rates and loan terms, so that you stay with their company and open other accounts.

Benefits of Using a Portfolio Loan

Obviously, this loan could benefit you if you cannot qualify for a traditional loan program. Many people also appreciate the more personalized customer service they get from working with a smaller bank or credit union.  In a larger bank, you may deal with an array of people over the life of the loan, and struggle to build trust.

Many investors are attracted to portfolio loans for fix and flip properties. The manual underwriting standards may adapt to their unique needs. For example, if you have a high debt-to-income ratio or an unusual credit history, the lender can still work with you.

Risks of Using a Portfolio Loan

Some portfolio loans will carry additional risk, especially if you already carry a lot of debt. The manual underwriting process could subject you to increased interest rates and fees. In addition, a higher down payment may be asked. You can always explore refinancing the loan later if you are not getting your preferred terms. Read the bank agreements closely, since many customize policies. Note if there are any sections where you are being asked to waive certain consumer rights. You should also note any penalties for taking actions such as paying off the loan early, selling at a certain point, refinancing, or more.

Whatever your decision, the friendly staff at Stonebriar Mortgage are here to help. We can discuss your interests and guide you in the portfolio loan process. We are here to support Dallas, Texas and California homebuyers.