It's no longer news that home prices in Seattle are sky-high. If you're thinking of buying a home in Seattle, you may need a jumbo loan to bridge the gap between your down payment and the purchase price. Over time, jumbo loans have become synonymous with jumbo interest rates. Once the amount you need is getting past the regular loan threshold, you'll struggle to find favorable interest rates. However, this doesn't have to be so. If you have a competent mortgage broker on your team, you can still secure reasonable rates for your Jumbo loan in Seattle. Here is a guide to the essential details you need to know about getting a Jumbo loan when buying a home in Seattle, WA.
What is the necessary credit score?
Banks expect a high credit score when giving out Jumbo loans for the Seattle real estate market. We recommend having a minimum score of 700, although some banks can demand as high as 720. You probably already know that a high credit score gives you a better chance of securing low-interest loans. However, if you already have bad credit, you may wonder how low lenders are willing to go.
Some lenders may consider people with a credit score of 680 if the borrower ticks other boxes from our experience. However, there is very little wiggle room if your credit score is below this mark. Remember, the lender is taking on more risk by offering jumbo loans. Thus, the borrower needs to have a high loan score to convince them they're worth the risk.
What documents do I need to secure a Jumbo loan?
You'll need documents centering around your income and debt to secure a jumbo loan in Seattle. If you're running your business, the lender will demand your tax returns to verify your debt to income ratios. You'll usually be asked to bring documents supporting your length of employment, monthly expenses, and mortgage or loan history.
Because a jumbo loan is not government-backed, the lender may not have to follow standard mortgage rules. Lenders typically make their rules, and they may vary based on the situation. Often, the lender also relies on their gut feeling to approve or reject Jumbo loans.
Does Jumbo loan rates have to be higher than regular loans?
Previously, it was almost a rule of thumb that Jumbo loans come with higher interest rates. However, the economic situation has prompted lenders to become more competitive. Most banks now offer adjustable-rate mortgages, and this bodes well for borrowers. If you work with a competent mortgage broker, they can help you come up with strategies to enjoy the loans at reduced rates.
Do I need a larger down payment?
From our experience as Seattle, WA, realtors, homebuyers that wish to obtain a Jumbo loan will need a larger down payment than other mortgages. The standard down payment is 20%. However, some lenders may accept less, depending on the borrower's financial status.
Are you thinking about buying a home in Seattle, WA? Do not hesitate to get in touch with us at Seattle's Mortgage Broker. We take pride in being one of the best real estate companies in Seattle, and we offer diverse financing options for potential homeowners. Call Seattle's Mortgage Broker today: 206-251-0818.
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