So, you chose your dream home only to later learn that the purchase price exceeds the loan limits of most jumbo loan programs. You are not worried, though. You have been planning your next home purchase for some time now and are prepared to make a larger-than-usual down payment on your dream home. Before you choose a conventional jumbo loan, you should get to know Dr. Zurab*.
Qualified Easily for a Jumbo Loan
Dr. Zurab came to Caliber Home Loans with an excellent credit history, sufficient funds for a down payment, and a wealth of prior home buying experience. The doctor had already shared that he planned to make a 30% down payment on the purchase. Thus, his loan amount would come in around $1,000,000 - well within the loan limits of most non-conforming mortgages. His investment and deposit account statements verified he could easily cover the down payment, estimated closing costs, and the monthly housing costs of the purchase. His debt-to-income ratio was low, even with the new purchase. And, he had a qualifying credit score for all the available jumbo loan programs. His Caliber Loan Consultant, after verifying his credit, assets, and home value quickly provided him with a variety of options to finance the purchase of his new home.
Elite Access Provides Another Option
Most mortgage lenders would proceed without second thought as they would have exhausted all available options with the usual jumbo loan programs. However, the Caliber team learned that Dr. Zurab had his eye on another investment opportunity. He had mentioned that he would be scaling that back to make the down payment on his home during a joint meeting with his Caliber Loan Consultant and his Financial Advisor. His Financial Advisor then covered the potential income of the investment with Dr. Zurab to be sure he was aware of the opportunity he might be sacrificing to purchase his dream home. Hearing this, his Caliber Loan Consultant chimed in, “You may have another option.”
Caliber had recently introduced a new portfolio loan product that could allow Dr. Zurab to have his dream home and invest elsewhere as he had wanted. The product, Elite Access, provided financing of up to $3 million. And, Elite Access could allow Dr. Zurab to finance up to 95% of the purchase price of his home. This low down payment option applied to loans of up to $2 million, and Dr. Zurab’s purchase price was under that limit. The doctor only needed to determine if he would rather preserve cash or make a larger down payment on a home.
No Mortgage Insurance Expense
With the help of his financial advisor, Dr. Zurab had a detailed analysis of the financial impact of the investment opportunity. Caliber provided him with the cost associated with each of his loan options, including Elite Access. However, Dr. Zurab noticed that the Elite Access estimate was lacking a cost he knew often accompanied lower down payment loan options. He did not see a line item for private mortgage insurance (“PMI”) in his monthly payment estimate. He then learned that Elite Access had another unexpected benefit. The program provided for a loan down payment without PMI as an added requirement.
Understanding the True Cost
Although there was a difference in rates between Elite Access and the other Jumbo mortgage options for which he was qualified, his overall cost over the life of the loan was about the same. Not having to pay PMI on an Elite Access loan offset the rate differential. The choice now was clear to Dr. Zurab. He would take advantage of the lower down payment and preserve his cash for other purposes.
Is Elite Access Right for You?
You may see that your situation is very similar to that of Dr. Zurab. However, every borrower is unique. Credit history, monthly debt payments, assets, the value of the home you will purchase - each of these plays a part in qualifying for a mortgage. As such, your interest rate and the loan programs for which you may qualify will vary. The only way to know if Elite Access is the right product for you is to meet with The MacFarlane Team. Complete the application process and obtain your individualized options after the underwriting evaluation. Don’t worry if that sounds like a lot of waiting or work. At Caliber, we move quickly and have the technology that helps make the process incredibly efficient. You will have detailed loan estimates to determine which program is best for your unique needs. And, you will have more options for your Jumbo loan financing by choosing The MacFarlane Team at Caliber Home Loans.
*Examples are for illustrative purposes only and meant to provide general information. Not representative of actual loan scenarios. Actual loan scenarios will vary and examples are not necessarily representative of all who may use our services.