JUMBO
Credit Requirements
Jumbo Mortgage Loan Credit Requirements
A Jumbo Mortgage is a type of home loan used to finance properties that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). Because these loans are not eligible for purchase by Fannie Mae or Freddie Mac, lenders take on more risk, and as a result, they impose stricter credit requirements on borrowers. If you’re considering applying for a jumbo mortgage, here are the key credit-related factors that lenders will evaluate.
Tradelines
Minimum three traditional tradelines with at least 24 months reviewed
– At least one active tradeline in the most recent six months
– Remaining two may be open or closed
– No significant adverse credit permitted with any of the three
Mortgage History
– Zero lates in the last 12 months on all real estate owned
– Zero forbearance within the last 12 months
Rental History
– Zero lates in the last 12 months
Contingent liabilities
– Can only be excluded from the debt to income ratio(s) with proof the borrower is not the primary obligor
– Zero lates in the last 12 months
Derogatory Event | Discharge/Dismissal |
|---|---|
Bankruptcy — Chapter 7 or 13 | 7 years |
Foreclosure, Deed-in-Lieu of Foreclosure | 7 years |
Loan Modification | 7 years |
Pre-foreclosure/Short Sale | 7 years |
Charge-Off of Mortgage Account | 7 years |
Number of Units | Loan Amount | Credit Score Fixed | Credit Score ARM | Occupancy |
|---|---|---|---|---|
1 | $1,000,000 | 680 | 720 | Primary Residence |
1 | $2,000,000 | 680 | 720 | Primary Residence |
1 | $2,000,000 | 660 | 700 | Primary Residence |
1 | $2,500,000 | 720 | 720 | Primary Residence |
1 | $3,000,000 | 740 | 740 | Primary Residence |
2 | $2,000,000 | 680 | 720 | Primary Residence |
2 | $2,000,000 | 660 | 700 | Primary Residence |
2 | $2,500,000 | 720 | 720 | Primary Residence |
2 | $3,000,000 | 740 | 740 | Primary Residence |
3-4 | $2,000,000 | 680 | NA | Primary Residence |
3-4 | $2,000,000 | 660 | NA | Primary Residence |
3-4 | $2,500,000 | 720 | NA | Primary Residence |
3-4 | $3,000,000 | 740 | NA | Primary Residence |
Number of Units | Loan Amount | Credit Score Fixed | Credit Score ARM | Occupancy |
|---|---|---|---|---|
1 | $1,000,000 | 680 | 700 | Primary Residence |
1 | $2,000,000 | 680 | 700 | Primary Residence |
1 | $3,000,000 | 740 | 740 | Primary Residence |
Number of Units | Loan Amount | Credit Score Fixed | Credit Score ARM | Occupancy |
|---|---|---|---|---|
1 | $2,000,000 | 680 | 740 | Second Home |
1 | $2,000,000 | 660 | 700 | Second Home |
1 | $2,500,000 | 720 | 720 | Second Home |
1 | $3,000,000 | 740 | 740 | Second Home |
Number of Units | Loan Amount | Credit Score Fixed | Credit Score ARM | Occupancy |
|---|---|---|---|---|
1 | $2,000,000 | 700 | 700 | Second Home |
1 | $3,000,000 | 740 | NA | Second Home |
Number of Units | Loan Amount | Credit Score Fixed | Credit Score ARM | Occupancy |
|---|---|---|---|---|
1 | $1,000,000 | 680 | 720 | Investment Property |
1 | $2,000,000 | 660 | NA | Investment Property |
1 | $2,500,000 | 720 | NA | Investment Property |
Number of Units | Loan Amount | Credit Score Fixed | Credit Score ARM | Occupancy |
|---|---|---|---|---|
1 | $2,000,000 | 680 | 740 | Investment Property |
1 | $2,000,000 | 660 | NA | Investment Property |
1 | $2,000,000 | 660 | NA | Investment Property |
The credit requirements for jumbo mortgages are stringent due to the size and risk associated with these loans. Borrowers need strong credit scores, low debt-to-income ratios, significant cash reserves, and a large down payment to qualify. By preparing in advance and understanding these factors, prospective jumbo mortgage borrowers can increase their chances of securing favorable loan terms.
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