Construction Jumbo

Your current land equity counts in your down payment. (with some obvious restrictions)

Houston & surrounding counties up to 90% of total cost of land and construction you can do 90% on permanent loan, either by finding a jumbo lender that will do 85% or 90% loans or by splitting the loan up to a $417,000 1st loan and the remainder in a 2nd loan. (The 1st lien interest rate is cheaper than the jumbo rate but the 2nd lien interest rate is in the 5-7% range).

Austin & San Antonio & Dallas Areas up to 90% of cost but tighter on 85% of LTV

The rest of Texas is at 80% of the lesser of cost or appraised value.

Be fore warned that when you get into jumbo and construction there are many restrictions, some are listed below and on this LINK

 

Max LoanToValue & Total-LTV
Residence Type Loan Amount Max LTV Max TLTV
Single Family Home or Duplex $100,000 – $750,000 90% 90%
Single Family Home or Duplex $750,001 – $1M 80% 90%
Single Family Home or Duplex $1M – 1.5M 75% 90%
Single Family Home or Duplex $1.5M – 2M 70% 90%
2nd Home $100,000 – $650,000 75% 80%
2nd Home $650,001 – $1M 70% 80%
Condominium & triplex & quad & non owner occupied / investment $100,000 – $650,000 75% 80%

* declining housing markets have lower LTV & TLTV
** cashout loans have lower LTV & CLTV

Cosigner – is NOT permitted
Credit Scores
Max LTV/TLTV
FICO Max LTV / TLTV
740 90%
720 85%
680 80%
660 75%

– Loans over $900,000 require 720 credit score
Max Debt-to-Income Ratio
Max Debt-to-Income Ratio
Mac DTI Max LTV / TLTV
41% 80+%
45% 70%-80%
50% 70%

(debts / gross income) *
* after expenses before taxes
Reserves 6 months PITI for loan <= $1M
12 months PITI for loans > $1M
Appraisals loans over $750k or “weak” appraisals to require two appraisals. This will cost approximately $500-$600 extra.
Seasoning 6 months required
Purchase contributions max of 6% of lesser of sales price or appraised value
Bankruptcy 7 year waiting since BK cleared
Foreclosure 7 year waiting since BK cleared
Deed in Lieu of Foreclosure 7 year waiting since BK cleared
Short Sale or Short Pay 5-7 year waiting for short sale depending if any mortgage lates in last 12 months

For more information call 281-259-0400

What is a JUMBO loan? In Texas any 1st loan over $417,000 is a jumbo loan.

What credit scores are required for a JUMBO loan? There is a variety of jumbo lenders and they all have different rules. There are very few that will accept credit scores below 700.
Credit score 680-699 0.25% higher rate (max of 80% LTV) LB
Credit score 680-699 0.5% higher rate (max of 75% LTV) LB
One lender requires no mortgage lates in last 24 months.

What is LTV? LTV is the loan to appraised value ratio. For example, if the property appraises for $1M and the loan is $700,000 then the LTV is 70%.

What credit scores are required for better rates on a JUMBO loan? A credit score of 760+ gets you the best rate with a 70% or lower LTV.

Can I get a 90% JUMBO loan? Yes but rates are slightly higher for this loan…
0.50% higher rate for 85.001-90% LTV
0.25% higher rate for 80.001-85% LTV

What RESERVES are needed for a JUMBO loan? Each lender varies from 3-12 months.

What is considered RESERVES? Reserves are the number of months of PITIH (Principle, Interest, Taxes, Insurance, HOA dues) you have in liquid accounts after you pay your “cash to close” amount.

How much lower is an ARM than a fixed JUMBO loan? There are 3/1 & 5/1 & 7/1 & 10/1 ARMs. The rate is approximately cheaper by …
10/1 ARM 0.75%
7/1 ARM 1.1%
5/1 ARM 1.5%

What is special about a JUMBO loan appraisal? When you get into the bigger loan amounts, the appraisal is looked at very closely. If there is any doubt that the property has 20%-30% equity usually the lender is going to require that the appraisal is solid. With loans over $750,000 be prepared to pay for two appraisals. If there is some question if the property will not appraise for the required amount, then we recommend that you let us submit the loan with multiple lenders. This will cost you more in processing and appraisal fees but it will keep the time to closing shorter and it could save you a lot of money in interest.

How long does a Jumbo loan take? The normal time is 3-5 weeks. Some things like a title problem, or a borrower that is slow with delivering needed documents, or a appraisal problem can delay the closing for another 1-4 weeks.

Can I get a JUMBO cashout loan? Yes you can get up to $250,000 cashout, but there are LTV limits, only on single family home, and total loan limits:
LU 65% LTV $1M loan limit
LU 60% LTV $1.5M loan limit
LU 55% LTV $2.0M loan limit
LU 45% LTV $2.5M loan limit

Can I get an non-arm length Jumbo loan? This is really tough as the lenders find it hard to trust the interested parties. At this time we have no lenders willing to do this loan.

Can a first time buyer get a JUMBO loan? Yes but the loan amount is limited to $1M.

What special income rules exist on JUMBO loans? Again various lenders have different rules with jumbo loans.
LU 45% DTI on fixed Jumbo
LU 40% DTI on ARM Jumbo & use 7.0% to calculate

How is the credit score calculated? Each borrower usually has 3 credit scores (from Transunion, Equifax, Experian). Take the middle score from each borrower. Use the middle score from the borrower with the lowest credit score.

Can I average my credit scores from each agency? No underwriters do not allow averaging credit scores.

Can I get a long term lock? You can get a 15, 30, 45, or 60 day lock. Locks can be extended 7, 15, 21 or 30 days.

 

Still Have Questions?

Don’t hesitate to reach out to us anytime

Contact Us

Address

5327 FM 1488, Suite F220
Magnolia, TX 77354

Phone

+1 281-259-0400