Your maximum DTI is 50 for loans below $3 million. Over $3 million the maximum ranges from 43 to 48.
Your cash reserves may be in any personal account you own 100% or jointly with your spouse.
How to Get the Best Jumbo Loan Rate
To secure the best interest rate for your jumbo loan, start by improving your credit score. Lenders typically offer borrowers with a credit score of 740 or higher the best terms. If your score is lower, focus on paying down high-interest debt to 10% of their maximum limits or 30% if 10-percent is not obtainable right away. Also, correct any inaccuracies in your credit report.
William Cook, an NMLS licensed loan originator explains,
"I've prequalified many borrowers over the years and before we run their credit they tell me it's 760 or 800+. Then when we run it for "some borrowers" it's lower by 40 to 60 points. I review their credit to find out why and it's usually because their credit card balances are high relative to their maximum limit. They tell me they paid it off a couple weeks ago. The discrepancy is your creditors have updated your account balance when you log in but it can take them up to three weeks to update your balances with all 3 bureaus."
You have 3 solutions.
- Buy the rate down. This could be costly for jumbo loan amounts;
- Apply for a loan once 2½ to 3 weeks have passed and the major bureaus have updated your account(s) or confirm with your credit monitoring service.
- Do a rapid re-score with the lender. This usually costs $105 per bureau per credit card and is completed in 2-3 days. We can tell you which credit bureaus need to be raised.
Another key factor is your down payment. A larger down payment can lower your loan-to-value (LTV) ratio, which signals to lenders that you're less risky. Less risk means a lower interest rate. Consider making a 20% down payment or more to potentially secure a better rate.
Popular Jumbo Loan Lenders
Top Lenders Offering Jumbo Loans
Many large banks and mortgage brokers offer jumbo loans. Some of the top lenders include:
- – Wells Fargo
- – Bank of America
- – Chase
- – Rocket Loans
Banks typically have stricter qualifying requirements such as lower debt-to-income (DTI) ratios (often capped at 43-45%) and lower loan-to-value (LTV) ratios (usually around 70-80%) and tend to take 4 to 6 weeks to close. Mortgage brokers, on the other hand, can offer more flexibility with DTI ratios up to 50%, LTV up to 90, alternative income documentation, and close your loan in 2½ to 5 weeks. We use Rocket Wholesale for traditional jumbos to offer fast closings with competitive rates. This could be the difference in getting approved and closing on time.