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Hi one of the lenders I am looking at said 768k loan amount is the minimum for jumbo product and jumbo also needs the 20% down in covid world. Need to call them and check but was wondering how this works in a low appraisal situation: Ex 1 mill home appraisal and 200k down, 800k is above 768k jumbo limit. But if the home appraises for 920k then 80% comes to below 768k so cannot meet both 20% down and greater than 768k criterion. Has anyone faced this? Thanks
Rate seems to be 3.125 minus .375 or 2.75% jumbo with 2 week approval. Conventional this lender is providing 3% with 3 week approval hence higher rate and longer approvals.
You lock a rate way before appraisal happens.
Isn't the rate locked for the product?
Citi has 15% down at 2.75% for 30 yrs fixed. No PMI DM for agent details.
Thanks just sent dm
If the house is apprised lower and the seller doesn’t want to lower the price, then you have a bigger problem, if you like the house.
No we have cash to cover the difference. This is mainly to get best rate. Wells conforming is 3% which seems higher than the 2.75% jumbo they can do if our loan amount is above 768k
Hi - what do you mean by "so cannot meet both 20% down and greater than 768k criterion"? 20% down will still be required due to the property appraising at 920K(Jumbo). The down payment does not reduce the home value, it only reduces the amount owed to the lender. Most lenders today will require a 20% down if the appraisal is above 768K.
So wells fargo needs 20% down and loan amount greater thank 768k for a jumbo price. If property appraises for 940k 20% down is 188k 80% is 752k At 752k loan amount they are saying they cannot jumbo price it and they need to price it confirming. Jumbo rate is 3.125%- .375%=2.75% Subtraction is relationship discount Conforming is 3% Hence lose out .25% rate. Also googain seems to be quoting 2.625% conforming so would be better than Wells conforming. Does that help clarify?
The bank will take the lower of the appraisal or the purchase price (if the appraisal is higher). Then 20% from that number is what they are willing to lend. You need to make up whatever the difference is (in a normal situation they are the same number). You can pay more money down or take out a line of credit or 2nd mortgage to get a loan conforming to get a better rate. You can also pay for points on the jumbo loan to get a better rate. Basic math can be applied to all of these strategies to get your ‘break even’ point for extra money paid compared to the discount in rate. Typically points you want to make that back less then 5y. For any extra cash you consider that is equivalent of getting the loan percent as a return. So it is pretty stupid right now to give $100k to get like .25%, you could put that money in stock market instead and average 5-7% over the life of the loan. Also it makes no sense that a conforming loan would be higher then a nonconforming loan. Ask to speak with there boss who can override this.
Thanks , ya no issues making up any differences as we can pay cash for difference. The jumbo is usually higher than conforming but with Wells and relationship discounts jumbo< conforming rate. Of course best conforming I have seen is .125% lower but we have done a lot of legwork with Wells. Once the report comes need to see if the bosses can over ride etc let's see. I did some analysis of comps with sqft vs price per sqft and it fell on a line which shows it should appraise, just hoping the appraiser uses some similar methodology.
As today is day 6 of 30 day and we might know appraisal on day 10 will have only 20 days if we change lenders then. Hence stressed out.
During the Covid crisis, how much months of reserves? One Wells Fargo lender told me 18 months.
Not sure actually but that sounds right
I was hoping to buy a $1M home with $100K down in the next few months. Is it really the case that I'll need at least 20% down?
U work at Amazon. Sell a few stocks and you can buy the house cash down
To close out this thread, appraisal came low but squeaked into jumbo by a few thousand $ so whew!!
OP how low was your appraisal? Is your home in the Bay Area?
Take some extra money for renovations/improvements, obviously if you're working with a lender that supports that
Why do you care about jumbo?