More than 60% of homeowners have a mortgage. This makes mortgages essential for many homeowners, but not all mortgages are the same.
What if you have a high credit score and high income, but you’re not currently able to pay for the house you’re looking at? If you’re making six figures but you want a seven-figure house, you’ll need a loan like everyone else. At the same time, the numbers mean you’ll be asking for a bigger mortgage than most people on the market.
In this article, you’ll learn what you need to know about financing high-ticket luxury housing in the metro Atlanta area: what distinguishes a jumbo loan from a regular loan, how much a loan needs to be before it’s considered a jumbo loan by the state of Georgia, how to get a jumbo loan approved, and more.
What Distinguishes a Jumbo Loan From a Regular Loan?
Regular loans are “conforming” loans. This means they meet the limits set by Fannie Mae and Freddie Mac. Lenders can sell loans to Fannie Mae and Freddie Mac, thus ensuring they’re able to lend their money again.
Jumbo loans are “non-conforming” loans. This means that Fannie Mae and Freddie Mac – two government-sponsored entities that were designed to help ensure that lenders had liquidity – won’t cover your loan.
What Is Considered a Jumbo Loan in Georgia?
As of 2020, the limit for a conventional loan in Georgia is $510,400. If you want to get a mortgage worth more than that, you will need to find a jumbo loan.
How Do You Find Jumbo Loans?
Lenders are less likely to finance a jumbo loan than they are a regular loan. This is because the larger loan represents a greater risk if you default on it, and they can’t be sold back to Fannie Mae or Freddie Mac.
The first step to getting a jumbo loan is ensuring you have a credit score high enough to overcome these risks. Generally speaking, you’ll want to make sure you have a credit score of at least 700 before attempting to get a jumbo loan.
From there, you have a variety of different strategies to get a jumbo loan and keep the interest rate as low as possible. These range from making sure you have sufficient proof of high income, setting aside enough money to ensure that you’re able to pay up to 12 months of the mortgage payment on-time, or simply offering a significant down payment at the time of purchase.
Looking for a Luxury Home in Lawrenceville, Georgia?
If so, Real Estate Expert Advisors is here for you. Co-founded by Tracy Cousineau, Real Estate Expert Advisors is happy to help a variety of Metro Atlanta residents buy and sell homes. Regardless of your price point, you can rest assured that we’re looking out for you.
On our site, you can find luxury homes available in the area. If you have any question about our services or the homes listed on our website, don’t hesitate to reach out to us at 770-378-3161.