Kingston Mortgage

Purchasing a Home in 2019 with a Jumbo Loan

Purchasing a Home in 2019 with a Jumbo Loan

Those who wish to purchase an expensive, luxury home will need a special type of mortgage program to fund their purchase. This mortgage program is known as a jumbo loan. Jumbo loans are a non-conventional loan program so requirements for it depend on the mortgage lender.

Sam and Vanessa Need a Jumbo Loan

Sam and Vanessa are currently looking for a property in Southern California’s Orange County. Orange County has an average home value of $721,500. Their current home sold for $1 million which they plan to use to purchase a property near the coast, with at least a view of the ocean. They have narrowed their choice to either Newport Beach or Laguna Beach. Both Laguna Beach and Newport Beach have an average home price of $2 million. However, both cities can easily go up to $10 million, especially if the property has a beach or ocean view. In order to accommodate their wishes, Sam and Vanessa have a maximum budget of $10 million.

Jumbo Loan Programs

Depending on the final price of the home, Sam and Vanessa will need one of two kinds of jumbo loan programs. The first jumbo loan program funds properties in the price range of $625,500 up to $2-$3 million. The second jumbo loan program is known as a non-conforming jumbo loan which begins where the first program leaves off, at $3-$4 million and goes up to $10-$15 million. A non-conforming jumbo loan typically requires extra proof and documentation of their ability to afford the property.

Depending on the mortgage lender, a down payment for a jumbo loan will vary. It can be as little as 5%, 10%, 20% or higher than 25%. Large banks are usually the institutions which require a down payment of 25% or higher. Be aware that low down payments such as 5% may also require a good credit history.

Kingston Mortgage Jumbo Loans

If Sam and Vanessa came to Kingston Mortgage, they would have two different kinds of jumbo loan programs. The first jumbo loan program can approve mortgages up to $2.5 million with a down payment of 5% and a good credit history. The second is our Non-conforming Jumbo Loan Program, also known as Super Jumbo Loans, which are specifically for premium luxury properties with financing available up to $15 million.

The price of a beach-front or beach-view property in Laguna Beach and Newport Beach falls in the range of $5 million to $10 million. If the price of Sam’s and Vanessa’s new home is between $5 and $10 million, they will need a non-conforming jumbo loan to fund their mortgage. Under this program, they can get a loan of up to $15 million with a down payment as low as 10%.