Jumbo Alternative Home Loans In California | CA Jumbo Loans


– Hey Margie, Please accept my apology. I started to send this yesterday, it was kind of later in the day and there’s just so much to say. There’s so many different things so I’m just gonna kind
of give you an overview and then I’m gonna send
you a shorter email. There are loan limits in the
areas that you’re looking to purchase in, Riverside and San Bernardino County. The conventional, conforming, Fannie Mae, Freddie Mac loan limit, which is the traditional loans
that are in the low fours when you put 10 or 20% down. Those loan amounts or
loan limits cannot exceed 424 thousand, so that would be like a 435, 445 sales price. That’s a straight, regular loan. Conventional loans have two features, one with mortgage
insurance, and one without. Let’s say if you have a mort… You put 10% down, there’s
mortgage insurance factor, let’s say it’s 100 thousand dollars, your monthly mortgage insurance
would probably be 50 bucks. Maybe 70 dollars, 50 to 70 dollars. Let’s just say the interest rate was 4.25. If you did something
called, Lender-Paid MI, Lender-Paid Mortgage Insurance, what that means is they
put the mortgage insurance in the interest rate. The interest rate is not gonna
be 4.25, it’s gonna be 4.5. Now you’re like, “4.2 to 4.5, why do I want a higher rate?” When it’s prudent to look at this loan is when the savings are
truly that much more, or that much greater. In higher loan amounts, we often find that it’s a lot better
to go out of the gate in a lender-paid mortgage insurance loan, just because the payment
is so much better. If you’re at 200 thousand or something, maybe it’s not that much better, but it almost is always that much better. We put a lot of people
into these LPMI loans and typically we do them at the 5% down and 3% down range, usually. While you’re looking at 450 to 550, so over at those sales prices, now you’re in something called “jumbo”, and jumbo loans want 15-20% down. Mandatory across the board. Jumbo loans are underwritten
by Fannie Mae and Freddie Mac, and they have all these guidelines, the debt ratios are tighter, jumbo loans are just a
lot more restrictive. In qualifying, you have to
have certain credit scores. With Fannie Mae and Freddie Mac, there are just general,
across the board rules, but some lenders apply different overlays, so it just kind of depends on
what lender you go through, how well versed your loan officer is at evaluating your
situation and placing you with a lender that you fit best with. There are solutions to this
15 or 20% down, jumbo dilemma, by doing a combination loan or seeking out lenders that
are doing what’s called “alternative” or “portfolio financing”, where these loans are not backed by Fannie Mae or Freddie Mac. They’re underwritten, underwritten and approved
and guideline set by the investors that are
gonna purchase and bundle and resell this one product. This is something that we’re
seeing more and more of. Let’s call it an “80-10-10” product. So you’ve got an 80% first mortgage, and that would be probably somewhere… We have one right now
that we’re pricing out and that we’re doing for a client and they have a 740 Fico
Score, and the rate is 4.3. 4.375 with 10% down. They’re not paying any
points, it’s just a regular, vanilla, first mortgage. Then they’re doing a 10% second mortgage and the rate on that is in the sevens, but it’s amortized over 30 years. A lot of lenders are doing a 15 due in 20, and the rate is like six or seven, but it’s amortized over 15
or amortized over 20 years, so it makes the payment a lot higher. This second, even though
the rate’s higher, it’s stretched out over a longer period, so you’re yielding a lower overall rate. No, yielding a lower, overall
payment than if you were to go into a product… if you were to go into a
product like a jumbo product. Jumbo pricing is not that pretty. I’m talking not that pretty,
15/20% down, 4.8 to 5.3. (dog barking)
This combo product… I have a couple little office dogs, so you hear that. (laughs) This jumbo product rate is high, so this combo product,
when you do the numbers, the combo product has
a much better payment, so don’t be scared of that
higher rate on the second. A brand new product that they have out is pretty amazing. You can put as little as 5% down, and it’s a 40 year loan, so it’s amortized over 40 years. Interest only for the first
10, so this is gonna yield you the lowest overall payment of any payment, and allow you to get in with
the least amount of money. So it’s a super super cool product. The rate’s high though, so
when I tell you the rate you’re gonna be like (gasps) “Oh my God!” But, interest only the first 10 years and a 40 year time frame. The payment is going to be
the lowest possible payment that you can get in the jumbo realm, or the jumbo loan amount, and it’s gonna also be the lowest payment and the lowest down. Remember though, these
loans are underwritten to specific guidelines and they don’t go to standard Fannie Mae and Freddie Mac, so all of our knowledge that we know whenever we originate one of these loans, we just have to go back and just make sure that you meet these investor guidelines. A lot of times, with the
lenders that I’m using, I’m able to do what’s
called a 43 debt ratio. A lot of jumbo lenders are
restricting you to a 38, to a 40. If you have a second mortgage involved, you’re gonna be at a 43
debt ratio in most cases. (giggles) This 95, 40 year interest only product, you’re probably looking at
a rate in the high fives, but again don’t let that scare you because it’s amortized over
such a long period of time. I think with you, every case
is just highly customized and evaluated in several different ways and the options I’ve presented to you, so that you have the
information in front of you and that you know
everything about that loan and that you’re making
the decision that’s best for you and your family. And you have me, you have my guidance. My job is to advise you,
present you the options and then tell you what
I think you should do because I am the professional. I’m the consultant. I have the knowledge,
I do this all the time. I have a real estate broker’s license along with a mortgage broker’s license so let me take care of
you and your family. That would have been a huge email. Alright, so you guys give me a call at
909-920-3500 when you’re ready to talk about this. Have a wonderful evening.

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