Can I get a Jumbo Loan with 5% Down?
If you are looking to purchase a high-priced home, you may need a jumbo loan, which is a type of mortgage that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac. Jumbo loans typically require a larger down payment than conventional loans, but is it possible to get a jumbo loan with just 5% down?
The short answer is that it depends on the lender. While some lenders may offer jumbo loans with a low down payment, most lenders will require a higher down payment to reduce their risk. Typically, jumbo loans require a down payment of 10-20%, but there are some options for borrowers who don't have a large down payment.
One option is to look for a lender that offers a piggyback loan, also known as an 80/10/10 loan. This type of loan allows you to borrow 80% of the home's value with a first mortgage, then take out a second mortgage for 10% of the value, and put down a 10% down payment. This can help you avoid paying for mortgage insurance and possibly get a lower interest rate on the first mortgage.
Another option is to consider a government-backed loan, such as an FHA or VA loan. While these loans are typically used for lower-priced homes, they do have higher loan limits in some areas, which could make them an option for a jumbo loan. For example, the VA loan limit in some high-cost areas is over $1 million.
It is important to note that getting a jumbo loan with a low down payment may come with some drawbacks. You may have a higher interest rate or a longer loan term, which could result in paying more interest over time. Additionally, you may have stricter credit requirements and need to show proof of significant reserves in order to qualify for the loan.
If you are considering a jumbo loan, it is important to shop around and compare offers from different lenders. Consider working with a mortgage broker who can help you find the best deal and explain your options in detail.
At Mortgage Brokers Pro , we specialize in jumbo loans and offer a variety of options for borrowers with different down payment amounts. Our team of experienced loan officers can help you explore your options and find the right loan for your needs. Contact us today to learn more about our jumbo loan products and get started on your home buying journey.