The Office of Federal Housing Enterprise Oversight (OFHEO) establishes limits for conforming loans on homes. Any home that falls outside of the guidelines cannot be securitized, purchased, or guaranteed by Freddie Mac or Fannie Mae, therefore they are referred to as Houston jumbo loans. The loan limits established by the OFHEO change annually, thus potential home buyers need to be aware of current conforming loan limits before purchasing a home. Individuals wishing to purchase a home that exceeds the conforming loan limit need to looking into non-conforming jumbo loans.
Jumbo Loan Limits
Currently, the Office of Federal Housing Enterprise Oversight has set the conforming loan limit at $417,000 for all states within the continental United States. Homes in Alaska and Hawaii may be purchased in amounts up to $625,500 and still be purchased, securitized, or guaranteed by Fannie Mae or Freddie Mac. In addition, in areas where homes fall into a high-priced market, such as in Los Angeles, the limit is higher, allowing home buyers to purchase a residence as high as $625,500 with a secured loan. This does vary by area, however, thus home buyers need to learn the limits in their region to determine how much they may obtain without turning to jumbo home loans. At this time, jumbo loans in Houston, Texas must conform to the existing federal guidelines.
Securing A Jumbo Loan
Many borrowers wonder if they will be able to secure their loan. Thankfully, certain institutions do offer this option, but here is a higher credit risk associated with these securities. As a result, the securities require slightly higher interest rates simply because they trade at a yield premium.
Purchases That Qualify For A Jumbo Loan
Potential home buyers find that jumbo mortgage loans may be used for a variety of purposes. Many lenders limit certain products to primary residences, yet this isn’t the case when a person obtains a jumbo loan. A loan of this type may be used for a vacation or second home, and it may also be used for investment properties. Buyers may choose between adjustable and fixed-rate loans, but all must be aware that loan limits may differ for multi-unit properties.
Qualifying For A Jumbo Loan
Home buyers must meet tougher requirements to obtain a jumbo loan. For instance, the buyer must be able to provide a 20 percent down payment or have an equivalent amount built up in home equity if they are trying to refinance the home. Income must be thoroughly documented, and the mortgage payment can be no more than 38 percent of income before taxes. Thankfully, interest rates seen with jumbo loans tend to be reasonable. In fact, many times they are equivalent to what a buyer would pay when obtaining a conventional loan.
Consider Houston jumbo loans the next time you go to purchase a home. Although the requirements are stricter for this type of loan, having this option allows you to purchase your dream residence rather than settling for something less. Finding the right lender to work with is crucial during this process. Therefore, look into all options before proceeding. You want to get a great deal on the home, and the right lender works to make this happen.