If you are considering buying a home in Phoenix, AZ which exceeds the conforming loan limits set by Fannie Mae and Freddie Mac, you will need to shop for a jumbo loan instead of a conventional loan.
Overall, applying for a jumbo loan is not all that different from applying for a conventional loan. There are however some extra requirements. You need to have two appraisals instead of one, and you may also have a harder time qualifying. A credit score which is acceptable for a conventional loan may not be high enough for a jumbo loan. You also will need to be able to apply more money toward your initial down payment.
Why Apply for a Jumbo Loan in Phoenix, AZ?
You might think that jumbo loans are not very common, but many consumers are surprised by just how many properties these days require jumbo financing.
Phoenix jumbo loans fall within the parameters set for Maricopa County:
- The conventional loan limit for 1 unit in 2017 is $424,100
- The conventional loan limit for 2 units in 2017 is $543,000
- The conventional loan limit for 3 units in 2017 is $656,350
- The conventional loan limit for 4 units in 2017 is $815,650
The median home price in Phoenix is only around $209,500, so most buyers will be able to get conventional loans. But many homes these days do cost in excess of $424,100. You do not necessarily need to be purchasing a huge mansion to need a jumbo loan to finance it.
As with any other type of home loan, you will find quite a bit of variation when it comes to terms and interest rates.
- Down payments may range between 15-30%.
- Lenders typically require a credit score of 700+, though there are exceptions.
- Your debt-to-income ratio is expected to be 43% or less.
- You may also need to prove you have at least 6 months of reserve cash.
- There are fixed rate jumbo loans available, but they are harder to come by than adjustable rate jumbo loans.