Non-Conforming Loans
Hi, it’s Mortgage Mack and Happy New Year. I hope you don’t mind the facial hair today. It is very cold in Houston, Texas. So, it’s helping me keep my face warm.
Non-Conforming Loans or Jumbo Loans – 80/10/10 – Less Money Down for Your Dream Home
You know, I have a scenario that I thought I’d share with you today. I have a young couple who have not sold their home, but they found a home they wanna buy. The home they wanna buy is in the $800,000 price range. So, that makes it what we call a jumbo mortgage loan. Now, a jumbo loan is— Maybe that’s the wrong term. Maybe a better term would be a non-conforming loan. And what a non-conforming loan means or jumbo loan means is that— First of all, the first parameter is that the amount financed is higher than the limits established by FannieMae and Freddie Mac. And I’ll include links for both of those here in the show notes, but also— But you know, you could buy an 800,000-dollar house and it’d still be conforming or non-jumbo loan if you didn’t finance any more than 453,100.
But, in the instants of my clients, we wanna finance more than that because we have a home that we haven’t sold yet and we wanna put this through as 10% down. Now, I’ll go into that here in just a second, but I wanna make sure that I’m clear about what a jumbo mortgage loan is, is that it’s a loan wherein we finance any more than the conventional loan limit established by Fannie or Freddie, which is $453,100 for the current year of 2018 for the Houston, Texas Metropolitan Area. And once the loan amount exceeds 
that,
then we fall into what is called the jumbo or nonconforming category at which the underwriting requirements are far more rigorous than traditional FannieMae or FreddieMac
You Can Borrower Your Down Payment with a Second Mortgage Loan
So, let’s talk briefly about our scenario and solution that I’m gonna help my clients with today. So, what I have is I have a jumbo loan that allows for as little as 10% down. Now, most jumbo loans require much more than 10% down. The traditional requires at least 20, maybe 25, but I have a special product here for them. And it’s what we call an 80/10/10. So, they can put as little as 10% down. I’m going to borrow another 10$ as what we call a second mortgage for them on their behalf. Now, I can arrange this type of financing for a client to $900,000 as the maximum amount borrowed. It does require 6 months reserves and what that means is that it will $100,000 to close and your payment was 5,000, then you have to have at least $30,000 left in the bank after closing.
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