Jumbo Loan Requirements for Buyers on the Outer Banks

Jumbo loans on the Outer BanksWith jumbo loans making a come-back into the Outer Banks mortgage market, many a luxury buyers (and sellers) are rejoicing!

But before you go dial up your favorite lender , you may want to know; Jumbo loans are coming with jumbo buyer requirements.

Specifically – buyers across the luxury home market that are considering a jumbo loan should be aware that large cash reserves are often required for purchases over $417,000.

Some lenders require their borrowers to have a reserve of up to 12 months’ worth of mortgage payments in the bank or liquid assets for purchases from $417,000 to $2 million according to a recent article from the Wall Street Journal Online. (For loans over $4 million the figure is more like 36 months’ worth of reserves.)

Cash reserves aren’t the only thing super-sized. Down payments are larger on a jumbo loan too.

Some lenders require at least a 20% down payment for jumbo loans with some going as high as 45%.

If you don’t quite meet some of those criteria exceptions can sometimes be made. This is especially true if you call on a lender that you’ve done a great deal of business with. Items like reserve amounts can sometimes be tweaked with the right relationship or for a buyer who is strong in other respects such as credit or down payment.

Why the big costs? Jumbo loans represent a larger investment and a larger risk to the lender. Many of these homes are customized, making them appealing to a smaller pool of specific buyers so if the loan goes belly-up the home will be more difficult than average for the lender to unload.

The bottom line: Jumbo loans may require more money in reserve and upfront, but if you’re a strong buyer the luxury market can yield a pretty amazing home!

Whether you’re looking for a luxury vacation, a second home, or even miles away from us, I can assist you with your purchase on the Outer Banks. Call 252-255-6518.