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Jumbo Cash Out

If your loan is more than $484,350, your best option could be a jumbo loan, also known as a non-conforming loan.  Jumbo loans allow you to borrow a larger sum of money than a conforming loan. Jumbo loans and conforming loans have many similarities, but there are some key differences you need to be aware of.

Debt-to-income ratio (DTI)

While conforming loans are more lenient on DTI, jumbo loans are not as flexible and have a hard cap of 43% DTI.

Credit Score

You will be required to maintain a credit score (FICO) average higher than 700 to qualify for a jumbo loan.

Loan to Value (LTV)

Due to the risk on jumbo loans, you will be held to a lower maximum LTV than conforming.  Your max LTV for a cash out jumbo loan will be 75%.

Appraisals

Depending on your home value, your loan could require two appraisals.  This will sometimes occur on loans over $1,000,000 and will always be required on homes with a value over $2,000,000.

Cash reserves

You are more likely to be approved for a jumbo loan if you have ample cash reserves.  The general rule of thumb is six months of reserves equal to your new principal, interest, taxes, and insurance (PITI) payment.

Interest Rates

In some cases your interest rate may be slightly higher than those offered on conforming loans because jumbo loans are considered riskier for lenders because they are not guaranteed by Fannie (FNMA) and Freddie (FHLMC).  The great news is that Texaslending.com offers some of the most competitive jumbo rates in the industry.

Loan Limits

To ensure you are in need of a jumbo loan, you should consult with a licensed loan officer.  The loan limits vary from county to county because some markets are pricier than others. For 2019, the conforming loan limit for a one-unit home in most counties nationwide is $484,350.  However, in high-cost areas, loan limits for conforming loans can be as high as $726,525.

Jumbo Cash Out
Minimum FICO
Credit Score
700
Maximum
Loan To Value
75%
Maximum
Debt To Income
43%*
Mortgage
Insurance
No
Years Since
Bankruptcy
7
Years Since
Foreclosure
7
Years Since
Short Sale
7
Special
Qualification
Requirements
Loan amount above Conv. guidelines
Jumbo Cash Out
Minimum FICO
Credit Score
:
700
Maximum
Loan To Value
:
75%
Maximum
Debt To Income
:
43%*
Mortgage
Insurance
:
No
Years Since
Bankruptcy
:
7
Years Since
Foreclosure
:
7
Years Since
Short Sale
:
7
Special
Qualification
Requirements
:
Loan amount above Conv. guidelines