Many homes throughout the Dallas metropolitan region and the state of Texas can be purchased with conventional financing.
But for certain high-cost properties, conventional financing may not provide sufficient funding to cover the price of a home.
That is when it is time to apply for a jumbo mortgage in TX instead.
What is a Jumbo Loan?
Every year, the Federal Housing Finance Agency (FHFA) sets the conforming loan limits for Fannie Mae and Freddie Mac.
Within those limits, it is possible to use conventional financing to purchase a home.
Above those limits, one needs to qualify for a jumbo mortgage instead.
Do You need a Jumbo Loan in Dallas?
To know whether you need a jumbo mortgage, you need to be familiar with the conforming loan limits that cap off conventional financing.
The limits differ from county to county, but those for Dallas County, Texas are the same as those for the majority of counties throughout the country:
Note that these are the 2020 conventional loan limits, which are higher than those for 2019.
That means that there are some properties which you may now be able to purchase using conventional financing which you would have needed to get a jumbo loan for last year.
Qualifying for a Texas Jumbo Mortgage
If you do need to use a jumbo loan to finance the purchase of a home, here are the requirements you will need to meet:
- Your credit score and debt-to-income (DTI) ratio must be competitive, more so than they would need to be to qualify for a conventional mortgage.
- You must document at least two years of steady employment on a solid career track.
- In some, but not all, cases, you may need to place more money down on the home.
- The value of your assets and cash reserves to date will be evaluated as part of your application. The more of either or both you possess, the more competitive your application will be.
You do not need to be a repeat homebuyer. You can purchase your first home with a jumbo mortgage.
When you apply for a conventional mortgage, one of the requirements is to get an appraisal of the property.
That remains a requirement when applying for a jumbo loan, but you may need to get two appraisals, not just one.
Is a jumbo mortgage necessarily expensive? Homebuyers are sometimes concerned about high interest rates. But it will please you to discover that depending on your own eligibility, you might qualify for interest rates that are close to conventional mortgage interest rates.