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Your Questions Answered - Jumbo Loans


It's Sunmark's "Welcome Home Week". Are you looking for a new home? We're ready to help you make it happen. Recently, Sunmark added more mortgage products to our line-up to help you do more with your money. All week, our Sunmark experts will provide the answers to your top questions about these new offerings.

Jumbo Loans: A Q&A with Sunmark’s AVP of Mortgage Originations,

Tom Phillips

What is a Jumbo Loan?

A Jumbo Loan, sometimes referred to  as a “jumbo mortgage,” is simply a mortgage product for an amount that exceeds the “conforming loan limit.” The “conforming loan limit” refers to the dollar cap on the size of a mortgage eligible for purchase by Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) that ultimately buy and administer most single-family-home mortgages in the United States. In most areas of New York State’s Capital District, the conforming loan limit is $548,250, while in Westchester County, the conforming loan limit is $822,375.

Who is the ideal candidate for a Jumbo Loan?

A Jumbo Loan is the right choice for a homebuyer looking to purchase either a luxury home, or any home  with amenities that results in a purchase price  that’s significantly higher than the average home in the county or surrounding community. This type of loan would also be relevant to a homeowner who is refinancing for a larger amount.

What requirements need to be met to qualify for a Jumbo Loan?

To be eligible for a Jumbo Loan, a homebuyer must have a FICO score of at least 720, along with a 20 percent down payment or a 70 percent loan-to-value on a refinance cash out. Jumbo Loans are for single-family homes only; they cannot be used for investment properties.

If I didn’t meet the qualifications what other options are available?

For homebuyers who do not meet the qualifications for a Jumbo Loan, you can put a larger payment down – which would bring the loan amount into conforming limits. If you are refinancing, your other option is to refinance at the conforming limit and take out a home equity loan for cash out. 

What are the Pros and Cons of a Jumbo Loan?

Homebuyers utilizing a Jumbo Loan benefit from having a single loan with a single payment, as opposed to taking a first and second mortgage with two payments. Jumbo Loans are also attractive to many homebuyers because the loan size allows you to get “more house.”

When exploring a Jumbo Loan product option, it’s important to keep in mind that there may be higher closing costs. Additionally, more of your money will be tied up in a larger down payment.

How does the Jumbo Loan work and what happens once approved? 

A Jumbo Loan functions like a standard conforming loan.  After the title and appraisal have been submitted and the loan is approved, a closing is scheduled, and the loan receives final completion after all paperwork is finalized.

What sets the Jumbo Loan product apart from other options?

With a Jumbo Loan, homebuyers have more options when house hunting.

About Tom:

Tom Phillips is the AVP of Mortgage Originations at Sunmark Credit Union. He has over 20 years of experience in the financial industry.

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