Jumbo Mortgage Loan : September 2009

Are you interested in mortgage refinancing in Burlingame CA?  I have great news! Mortgage refinancing can now be customized to closely match the term of your current mortgage. 

You may not want a mortgage refinancing because you are thinking "Oh great, I have been paying on my 30 year mortgage for three years, now I am going to start over with a new 30 year mortgage!" You don't want to start over. You don't want to turn back the clock.

Here is the new mortgage refinancing solution for this problem: customized loan terms. Let's look at an example.

Suppose you have paid on your 30 year mortgage for three years, as above. You notice that interest rates are less than what you are paying on your current mortgage, so you are contemplating a mortgage refinancing. Instead of obtaining a 30 year mortgage, you are now able to customize the terms to a 27 year mortgage!

By customizing the terms with your mortgage refinancing, you do not have to turn back the clock! You can stay on the same amortization schedule to get your mortgage paid off.

The rates for this type of mortgage refinancing are determined by rounding up to the nearest published amortization term. In this example, the rates for a 30 year mortgage would be used for a 27 year mortgage.

Suppose you are 53 years old, and you would like to retire at age 65. You could apply for a 12 year mortgage refinancing to have your home paid off at the time of retirement. In this example, rates for a 15 year mortgage would be used because this term is the closest higher amortization term.

Customized mortgage terms are available with amortizations from 10 years to 29 years. Conforming loans and agency jumbo loans (loan amounts up to $729,750 for single family residences in certain counties) are available for customized mortgage refinancing solutions. Properties can be located not only in Burlingame Ca, but also in all parts of California.

Would you like to calculate your customized mortgage payment? Look over to the right under my picture and figure out what your payment will be with a mortgage refinancing.

Do you want to find out the current rates? Contact Me

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As a loan officer in California I specialize in the jumbo loan market. I have been encouraged recently by the re-appearance of some lenders (Suntrust, Citimortgage) into the jumbo loan space. Despite the increased competition, it is still very difficult to obtain a jumbo loan because of the strict underwriting guidelines.

I have done a survey of my jumbo loan sources with the purpose of finding some minimum standards required in each area of underwriting. Here is what I have found:

Stated income is virtually non-existent. However, I have one jumbo loan lender that will do stated income for large loan amounts. I wrote this blog post about the program.

The maximum loan-to-value percentage is 80%. In my area the maximum agency loan for a single family residential is $729,750. If you need to borrow more than this amount, you are limited to 80% of the property value. 

The maximum combined loan-to-value percentage for a jumbo loan is also 80%. By combined loan-to-value percentage I mean the  total amount of a first mortgage and second mortgage added together in comparison to the property value.

The minimum credit score allowed is 650. The score used to qualify is the middle score. If there are two or more borrowers, the lender will use the lowest middle score. The guidelines regarding credit score for a jumbo loan used to allow the lender to use the middle score of the primary wage earner.  

The maximum debt-to-income ratio for a jumbo loan is 50%. This maximum is exclusive to one lender. Most require a debt-to-income ratio of 45% or less. Several are at 40%. Most of the lenders tell us there are no exceptions to these guidelines. 

All loan programs with an interest-only payment option are qualified at the principal and interest payment. This requirement has presented some interesting problems for borrowers who are attempting to refinance their jumbo loan. I have presented quotes to clients in which their payment would go down significantly. However, because the lender requires the principal and interest payment to be used to qualify, they cannot, because the debt-to-income ratio has become too high with a principal and interest payment.

The maximum loan amount is $5,000,000. This maximum for a jumbo loan is not too limiting because there are very few borrowers who would like to borrow more than this amount, even in California. However, most of my lending sources have a maximum loan amount between $1,500,000 and $2,000,000.

The minimum amount of cash reserves is 6 months of PITI. PITI stands for principal, interest, taxes, and insurance. We do have one jumbo loan lending source that does not ask for verification of reserves, however, this is definitely the exception, not the rule.

Most jumbo loan lenders have a maximum amount of cash a borrower can take out - $350,000. However, there are a few lenders that allow more, but they generally are not as competitive with their rates.

A jumbo loan for a second home has a maximum loan-to-value percentage of 75%. Be prepared to prove that it truly is a second home with your tax returns. If income is declared for your second home, it is very difficult to get your loan approved as a second home. 

Do you have transactions in California that make sense but are tough to place through institutional lenders, and deserve better than most hard money terms? Montecito Financial is a lender that you may want to consider contacting.

In addition to my business as a mortgage broker, I am representing this product on a wholesale basis through mortgage brokers who are licensed in California.

Here are some of the features of the product we are offering:

• Loan amounts to $8 million and more by exception
• unlimited cash-out
• 75% max loan to value
• primary residence, vacation homes, investment property, and commercial property
• full documentation or stated income
• rate reductions for <45% LTV, full documentation, and 720+ scores