90 LTV Jumbo Loans With No Mortgage Insurance
In this blog, we will be covering and discussing the 90 LTV Jumbo Loans. The 90 LTV Jumbo Loans stands for a 90% loan-to-value jumbo mortgage loan program. One 10% down payment is required on the 90 LTV Jumbo Loans with no private mortgage insurance required.
Real estate prices have been increasing since 2010. Despite mortgage rates being the highest since 2010, home prices have been increasing with no signs of any correction. The Federal Reserve Board is planning on increasing rates again. There seems to be a shortage of home inventory versus demand nationwide.
What Are Jumbo Mortgages?
A jumbo loan is a mortgage loan that exceeds the maximum FHA and Conforming loan limits. Fannie Mae and Freddie Mac will only purchase mortgage loans that conform to Fannie and Freddie Mac guidelines. Since jumbo loans exceed the maximum Fannie and Freddie conforming loan limit guidelines, any mortgage loan with a loan balance that exceeds the conforming loan limit is called jumbo loans. The maximum loan limit for FHA is $420,680. Conventional loan limits are capped at $647,200 unless the properties are in a high-cost area. High-balance loans in high-cost counties in the United States are now at $970,800 for single-family homes.
Due to rising home prices both HUD and FHFA have been raising loan limits for the past several years. Many qualified home buyers were hindered from buying homes due to home prices exceeding government and conforming loan limits and falling into non-conforming/Jumbo Loan Limit territory.
Understanding 90 LTV Jumbo Loans with No Mortgage Insurance
Introduction
As the housing market evolves, homebuyers seeking high-value properties often turn to jumbo loans to secure the necessary financing. Among the options available, 90 Loan-to-Value (LTV) jumbo loans with no mortgage insurance offer an attractive proposition. This article explores these loans’ features, benefits, and considerations, providing a comprehensive overview for potential borrowers.
What is a 90 LTV Jumbo Loan?
A 90 LTV Jumbo Loan is a type of mortgage designed for high-value properties that exceed the conforming loan caps established by Fannie Mae and Freddie Mac. The term “90 LTV” means that the loan covers up to 90% of the property’s appraised value, requiring the borrower to make a 10% down payment. A key feature of these loans is the absence of mortgage insurance, even with the high LTV ratio.
Eligibility Criteria
To qualify for a 90 LTV Jumbo Loan with no mortgage insurance, borrowers must meet stringent criteria due to the high loan amounts and associated risks. Generally, the requirements include:
- Age: Borrowers must be at least 18 years old.
- Credit Score: A high credit score, typically 700 or above.
- Debt-to-income Ratio: A low debt-to-income ratio, often below 43%.
- Income: Substantial and stable income.
- Cash Reserves: Significant cash reserves, sometimes enough to cover several months of mortgage payments.
Property Eligibility
Eligible properties for these loans usually include:
- Primary Residences: Homes where the borrower intends to live.
- Second Homes: Vacation or secondary properties.
- Investment Properties: Real estate purchased for rental income or investment purposes.
Benefits of 90 LTV Jumbo Loans with No Mortgage Insurance
These loans offer several advantages, making them appealing to high-value property buyers:
- Avoiding PMI: Borrowers can save thousands of dollars by not having to pay for private mortgage insurance (PMI).
- Lower Down Payment: Only a 10% down payment is required so borrowers can retain more of their savings.
- Increased Buying Power: Enables buyers to afford more expensive properties without a substantial upfront payment.
Costs and Interest Rates
While these loans offer substantial benefits, they also come with certain costs:
- Higher Interest Rates: Due to the inflated risk, interest rates for jumbo loans are usually higher than those for conforming loans.
- Origination Fees: Fees imposed by the lender for handling the loan application.
- Appraisal Fees and Closing Costs: Standard costs associated with securing a mortgage.
- Servicing Fees: Ongoing fees for managing the loan.
Risks and Considerations
Borrowers should be aware of the risks and factors to consider when opting for a 90 LTV Jumbo Loan:
- Stricter Qualification Requirements: These loans have more rigorous qualification criteria than conforming loans.
- Potential for Higher Monthly Payments: Monthly payments can be significant due to higher interest rates and loan amounts.
- Market Fluctuations: Fluctuations in the real estate industry can affect the property’s value and the borrower’s equity.
Repayment Terms
The loan must be repaid when the last remaining borrower sells the property, permanently moves out, or passes away. The loan balance, including interest and fees, becomes due then.
Alternatives and Refinancing Options
For those who may not qualify for a 90 LTV Jumbo Loan, alternatives include:
- Conforming Loans: Loans within the limits of Fannie Mae and Freddie Mac, often with lower qualification thresholds.
- FHA Loans: Government-backed loans have more lenient requirements but require mortgage insurance.
- Saving for a Larger Down Payment: Reducing the loan amount needed by saving for a higher down payment.
Refinancing options are also available for borrowers looking to change their loan terms or take advantage of lower interest rates.
Conclusion
90 LTV Jumbo Loans without mortgage insurance provide a practical financing option for purchasers of high-value properties. They combine the benefit of a higher loan-to-value ratio with the cost savings of avoiding PMI. However, it is crucial for borrowers to fully understand the terms, costs, and risks involved. Consulting with a financial advisor and carefully reviewing the loan terms can help ensure that this type of mortgage fits your financial situation.
Can You Get a 90 LTV Jumbo Loans?
Any loans over $647,200 are considered Jumbo Mortgages. However, lenders required a 20% to 25% down payment on all Jumbo Loans. Due to this issue, Gustan Cho Associates launched the 90 LTV Jumbo Loans. The great part of 90 LTV Jumbo Loans is borrowers will have no private mortgage insurance required.
90 LTV Jumbo Loans Is Now Available For Home Buyers
The new 90 LTV Jumbo Loans at Gustan Cho Associates An amazing new NON-QM loan product has been added to our long list of loan products available at Gustan Cho Associates
- We are excited to roll out a 90 LTV Jumbo Loans
- It is NOT a NON-QM mortgage loan program
- This will be a game-changer for many clients
- The 90 LTV Jumbo Loans is a traditional jumbo mortgage loan program
- This holds true, especially for homebuyers in need of Jumbo Mortgages
- It is tricky to get a Jumbo loan with 10% down these days
- A 10% down payment is UNHEARD OF
In the following paragraphs, we will explore the qualifications of the NEW 10% down payment traditional jumbo loan with NO MORTGAGE INSURANCE.
Benefits of The 90 LTV Jumbo Loans With No Mortgage Insurance
Who are the 90 LTV Jumbo Loans designed for? Higher-priced homebuyers who do not want to put all their cash down for a down payment. Borrowers who are 4 years out of a Foreclosure, Deed-in-Lieu, or Short Sale. Borrowers looking to purchase over Conforming and FHA loan limits.
Eligibility Requirements on the 90 LTV Jumbo Loans
What are the basic requirements for the 90 LTV Jumbo Loans? The borrower must have a 720 or higher credit score. The 90 LTV jumbo loans are only available for ONE Unit Primary Residences. The 90 LTV jumbo loans is a full income documentation mortgage program. The 90 LTV jumbo loan is a traditional jumbo loan. It is NOT a bank statement loan.
Late Payment Guidelines on Jumbo Loans
To qualify for the 90 LTV jumbo loans, late payments on housing are frowned upon. Cannot be 30 days late on housing payments in the last 12 months. MUST HAVE 12 months of reserves (total mortgage payment, PITIA). Reserves do not need to be cash. Can be 401k and/or investment accounts. Max DTI = 35%/40%. The minimum and maximum loan amounts are $730,000 – $3,500,000. One of the best features of this loan product is you are not required to carry mortgage insurance. Mortgage insurance is great for many loan products when not putting down 20% but can be a pain to cancel.
No Mortgage Insurance Jumbo Loans
With this jumbo loan product, homeowners will not need to worry about canceling their private mortgage insurance premium and you’re not putting down 20%. Meaning you will not need to go through the troubles of canceling your Mortgage Insurance once you get your loan down to 80% LTV or carry it throughout the life of the loan like some FHA loans.
Underwriting Guidelines on 90 LTV Jumbo Loans
All jumbo loans have their own mortgage underwriting guidelines depending on the lender. Each lender has their own mortgage underwriting guidelines on its jumbo mortgage loan program. In the following paragraph, we will go over the 90 LTV Jumbo Loans Underwriting Requirements.
Credit Score Guidelines on 90 LTV Jumbo Loans
The minimum credit score requirement to qualify for 90 LTV jumbo loans, the minimum credit score required is 720 FICO. Primary wage earners’ credit scores will be used if the co-borrower has lower than 720 credit scores. Verification of rent or verification of mortgage is required.
Credit Guidelines on 90 LTV Jumbo Loans
Must show no late payments on housing payments in the past 12 months. RENT FREE NOT ALLOWED. The borrowers must have 3 or more tradelines reporting for 12 months or longer. Or 2 tradelines reporting for 24 months or longer AND having activity within the past 12 months. We can close the 90 LTV jumbo loans in 30 days or less.
Best Jumbo Mortgage Options
Homebuyers with any questions about the new 10% Down Payment JUMBO Mortgage, call Mike Gracz at 630-659-7644 or text for a faster response. Or email Michael Gracz of Gustan Cho Associates at mgracz@gustancho.com. Remember this new Mortgage product ranges from $130,000 to $1,500,000 making it a great JUMBO mortgage opportunity.
Best Mortgage Lenders For Bad Credit
We are experts on traditional and NON-QM jumbo mortgage loans. Gustan Cho Associates has hundreds of non-QM and alternative financing loan options on owner-occupant, second homes, and investment loan programs. The team at Gustan Cho Associates can help home buyers get into their dream houses.
About Gustan Cho Associates
Gustan Cho Associates is a full-service mortgage broker licensed in 48 states, including Washington DC, Puerto Rico, the U.S Virgin Islands, and Hawaii. We do not have any LENDER OVERLAYS so we can service most clients. Over 80% of our clients are borrowers who could not qualify at other mortgage lenders either due to a last-minute mortgage loan denial, lender overlays, or because the lender did not have the mortgage loan option best suited for the borrowers.
Mortgage Brokers Licensed in 48 States With 190 Wholesale Lending Partners
Gustan Cho Associates is licensed in 48 states including Washington DC, Puerto Rico, and the U.S. Virgin Islands. We have a lending network of over 190 wholesale lending partners including government and conforming loan lenders with no lender overlays, non-QM lenders, and alternative mortgage lenders on owner-occupant, second homes, investment properties, and commercial loans. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.
Frequently Asked Questions (FAQs)
1. What is a 90 LTV Jumbo Loan?
A 90 LTV (Loan-to-Value) Jumbo Loan is a mortgage with a loan amount of up to 90% of the property’s appraised value. These loans are intended for high-value properties surpassing the conforming loan limits Fannie Mae and Freddie Mac set.
2. What does “no mortgage insurance” mean in the context of a 90 LTV Jumbo Loan?
Typically, lenders require private mortgage insurance (PMI) for loans with a high LTV ratio to protect against default. However, a 90 LTV Jumbo Loan with no mortgage insurance means the borrower does not need to pay for PMI, even though the loan amount is 90% of the home’s value.
3. Who is eligible for a 90 LTV Jumbo Loan without mortgage insurance?
Eligibility criteria vary by lender, but generally, borrowers should have a high credit score (typically 700 or above), a low debt-to-income ratio, substantial income, and significant cash reserves.
4. What types of properties qualify for this type of loan?
Eligible properties usually include primary residences, second homes, and investment properties. However, specific eligibility can vary by lender and property type.
5. How do I apply for a 90 LTV Jumbo Loan without mortgage insurance?
To apply, you must provide comprehensive financial documentation that includes tax returns, bank statements, proof of income, and details of any other assets. It’s best to contact a lender specializing in jumbo loans to guide you through the process.
6. What are the benefits of a 90 LTV Jumbo Loan with no mortgage insurance?
Benefits include avoiding the cost of PMI, potentially saving thousands of dollars over the life of the loan, having access to higher loan amounts, and the ability to finance a high-value property with a smaller down payment.
7. How does avoiding mortgage insurance save money?
Without PMI, borrowers can save on the additional monthly premium that would otherwise be required, reducing overall monthly payments and the total loan cost.
8. Are interest rates higher for 90 LTV Jumbo Loans without mortgage insurance?
Interest rates for jumbo loans are usually higher than conforming loans due to the lender’s increased risk. However, rates can be competitive, and shopping around with different lenders can help secure the best rate.
9. What are the typical costs of a 90 LTV Jumbo Loan?
Typical costs include origination fees, appraisal fees, closing costs, and potentially higher interest rates. Before committing, it’s important to review all fees with your lender.
10. What are the risks associated with a 90 LTV Jumbo Loan?
Risks include higher interest rates, stricter qualification criteria, and potentially larger monthly payments. If the property’s value decreases, you could also owe more than the home is worth.
11. Is qualifying for a 90 LTV Jumbo Loan harder than a conforming loan?
Yes, jumbo loans have stricter qualification requirements due to the larger loan amounts and higher risk. Borrowers typically need excellent credit, significant income, and ample cash reserves.
12. What happens if I default on a 90 LTV Jumbo Loan?
Defaulting on a jumbo loan can lead to foreclosure, damage to your credit score, and potentially significant financial loss. Given the high stakes, it’s essential to ensure you can comfortably manage the loan payments.
13. Can I refinance a 90 LTV Jumbo Loan without mortgage insurance?
Refinancing is possible, and it can be beneficial if interest rates drop or you want to change the loan terms. However, it would help if you still met the lender’s qualification criteria for refinancing.
14. Are there any alternatives to a 90 LTV Jumbo Loan if I can’t qualify?
Alternatives include conventional loans with a lower LTV ratio, FHA loans (which do require mortgage insurance but have more lenient qualification standards), or saving for a larger down payment to lower the loan amount.
