Jumbo mortgage rates in Michigan can be hard for a lot of people to figure out. It can be even harder to decide whether or not a jumbo loan would be a good idea. At Gem Home Loans, though, we take all the confusion out of the process. We’ll make sure you know exactly what kind of loan will be worth pursuing, and then help you do just that. You won’t have to deal with any pushy representatives who care more about their commission than your financial well being.
As you would probably imagine, a jumbo loan is one that’s bigger than the usual loan. It’s larger than the typical loan amount, so it can be harder to get. If you are thinking of buying a house in a high-priced location, or you’re looking to buy a very large home, then a jumbo loan may be worth considering.
In addition, unlike an FHA loan, a jumbo loan allows you to either buy a primary residence, or to purchase a vacation home, or an investment property.
While these are major differences, jumbo loans are actually pretty similar to more traditional loans in most other areas. You can, for instance, get either an adjustable-rate or fixed-rate jumbo loan, just like you can with conventional loans. It is important to know, however, that jumbo loan mortgage rates are usually higher than other loan programs.
As you learned earlier, the limits of jumbo loans are higher than those of other loans. For example, Freddie Mac and Fannie Mae set a limit of about $550,000 for most of the United States. In certain metro areas, as well as Hawaii and Alaska, the limits are closer to $820,000. So if you want to buy a home in Michigan that costs more than $550,000, you’ll probably need to get a jumbo loan.
Rates can also fluctuate more than those associated with conventional loans. In December 2020, a conventional 30-year fixed rate loan had a rate of 2.96 percent. The rate for a jumbo loan was 3.42 percent.
Even though rates tend to be higher, there are still some significant benefits to pursing a jumbo loan. The first one you already know – a jumbo loan will make it possible for you to get in a larger home, which wouldn’t be possible through a conventional loan.
A jumbo loan, as you can well imagine, is a riskier proposition for a lender. As a result, it will be more difficult for you to get one. You will usually need to have a lot of income, as well as a high credit score. While you might be able to qualify with a 660 FICO (credit) score, you’ll probably need one around 740 to have your best chance.
If your score is lower, you’ll more than likely need a low debt-to-income ratio in order to have a chance. In addition, you’ll probably need to make a down payment of between 10-20 percent, and be able to show you have enough liquid assets to be able to cover 6-12 months of mortgage payments.
Gem Home Loans experts are ready to answer any questions you may have regarding jumbo mortgage rates in Michigan. Use our online form or give us a call at (248) 780-1030 to get in touch.