Do You Need a Jumbo Down Payment for a Big Mortgage?

Most people will say you need to have excellent credit and a big down payment in order to secure a large mortgage. The reality is that while having a big chunk of cash to put down on a house is nice, it is not always an absolute requirement. Here’s what you should know if you are looking to take on a large mortgage.

Can I Geta Large Mortgage With a Low Down Payment?

It depends on where you live and how large we’re talking. Any Federal Housing Administration orFHA loan up to the maximum county loan limit can qualify for only 3.5% equity in down payment. Bonus: Back in December 2016, the FHAapproved higher loan limits beginning in January 2017 for many counties across the country.

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Another program known for having low down payment requirements are VA loans. VA loans are available to veterans, active duty service members, National Guard members and reservists who meet the requirements of the Department of Veterans Affairs and have acquired a Certificate of Eligibility from the VA or their lending office. VA loans will also go up to the maximum county loan limit and can even go up to or over $1 million in home values.

The idea that you need a big down payment in order to secure a larger mortgage is simply not true. FHA loans do require mortgage insurance premiums, and VA loans have a guarantee fee, which will increase your closing costs. However,your down payment will remain minimal.

What’s a Jumbo Mortgage?

Jumbo loans exceed the maximum county loan limits and are not bought and sold every day to Fannie Mae and Freddie Mac. That said, jumbo loans do require significantly higher credit scores, typically 700 or above, and at least 10% equity in down payment. Keep in mind that any loan with less than 20% equity in the property will besubject to private mortgage insurance. (Not sure where your credit stands? You can view two of your credit scores, with updates every 14 days, for free on

Jumbo mortgage requirements are particularlyrelevant for those looking to buy a home in high-cost areas. For example, in California’s Sonoma, Marin, San Francisco, and Alameda counties, the maximum loan limit ranges anywhere from $595,000 to $729,500, but there are home that easily go for well over that.

How Can I Put Together a Down Payment?

Acceptable sources of down payment funds can include:

  • Gift funds from a relative
  • Selling of personal property that can be documented and supported by third-party value pricing (ie Kelly Blue Book for a car sale)
  • Withdrawals from retirement funds

Remember, you cannot use your income as a form of assets. Banks want to see that you have the ability to save money up on your own. For example, you cannot use money from your paycheck that you deposited five minutes ago as a down payment because the funds are not considered “seasoned.” In order for these funds to be considered, they must have been in your accounts for at least 60 days to show the money was “saved.”

Struggling to put together a down payment? You can find more ways to find extra funds here.

As always, if you are looking to buy a house, be sure to do some research beforehand. Figure out how much cash you really have by working with a lender and seeing what you qualify for now. Be sure, too, to carefully research how much house you can actually afford — and what a comfortable monthly mortgage payment would be.Also, work with that lender to develop a savings plan so you can qualify for your first mortgage or improve your current mortgage and financial situation.


VA IRRRL and Program news; CFPB 2017 Initiatives’ Websites

I have my own opinion about reading a book versus watching YouTube videos, given our finite time every day, but this statistic is staggering: The number of hours of content being uploaded to YouTube every minute is four hundred. So, 400 hours of videos are being uploaded every minute! The aggregate amount of time the human race spends watching web videos is still below the time spent watching television, butthe gap is
closing very fast.

And I received this
information on the recent Caliber acquisition. To clarify information
regardingCaliber Home Loanswho purchasedBanc Home
Loans, a division of Banc of California NA, the transaction encompasses
the retail, wholesale, and correspondent origination channels. Banc of
California will retain their originations for their non-agency, bank portfolio
products. In this acquisition, Caliber will bring on the renovation platform
which provides a big opportunity to expand their existing product offering.

VA IRRRLs (Interest Rate
Reduction Refinance Loan)

The VA program, often
overlooked, is again gaining some publicity. A week or so ago I discussed some
lenders refinancing vets at a fast pace. This elicited a note from the MBAsPete Mills, SVP, on VA refinancing – a topic on which I received many
similar e-mails.Regarding your recent commentary on theVA
IRRRL issue, MBA shares the concerns that veterans are ill-served by
aggressive serial refinancing from a 30-year fixed to a 3/1 ARM. Our members
are seeing VA purchase loans being solicited for a 3/1 refi within weeks of
closing, and in some cases before the original loan has been pooled. Except
perhaps for rare cases, we find it hard to believe such activity is in the
veterans interest. In this rising rate environment, for the vast majority of
veterans refinancing in less than six months, such activity strips equity and
puts veterans into a product that is almost certain to result in higher
payments over the long run.

The MBA has been in
active discussions with both VA and Ginnie Mae to address this practice, which
harms veterans, investors and responsible lenders alike. GNMAs requirement to
pool these loans into standalone MBS – which MBA strongly supported – should
have taken the economic incentives out of this practice, but apparently it has
not been enough to curb these serial refinancing. For that reason, MBA will
continue to advocate – as we have for the past year – for additional steps
through VA rulemaking to bar early refinancings that do not provide a tangible
benefit to the veteran.

Program-Specific News

NewLeaf Wholesalemade enhancements to itsNewLeaf VA
guidelines.These enhancements
effect VA High Balance 30, 20, 15 and 10 year products.

NewLeaf BankStatement program guidelines have been
updated to include a 12-month Bank Statement option, Interest Only amortization,
2-4 unit properties and reduction in seasoning requirements for major
derogatory credit events.

ProvidentFundingis now offering FHA for sponsored originators in the states of CO, CA, NJ, PA, UT with more states coming soon.

Sun West Mortgage
Company, Inchas published
guidance on acceptability of properties with outstanding Property Assessed
Clean Energy (PACE) or HERO programs. The guidance is available in General
Requirement section in Underwriting Guide for Forward Mortgage. To access the
guideline for wholesale channel, pleaseclick here; for correspondent channel, pleaseclick here.

PRMG Mortgagehas updated its Resource Center in
FastTrac. Updates include LDP GSA updated form, Jumbo Niche and Closed-End
Seconds, Bond/Housing Authority/DPA Products (Retail only), and additions to
ARM Product Data.

Citadel Servicingis now offering 12-Month Personal Bank
Statement for income. Upto80%LTV, 100% of Deposits for
Personal Statements, Dont look at Withdrawals or overdrafts and no Pamp;L.
Contact Will atwillf@Citadelservicing.comfor details.

Regulatory News

I am occasionally asked
about any information concerning the CFPBs lender initiatives for 2017. The
bulk of the work is regarding the Home Mortgage Disclosure Act, but all can be
researched in greater detail using the links below. Lets start with
eRegulations. One initiative is to make regulations easier to read and navigate
by bringing related information and regulatory history together withthe rule text. Of course the CFPB is working on HMDA, having
taken it over from HUD, offering upa webinarand especially when it concernssmall
entities complying with new rules and regulations. There is information about collecting and
reporting HMDA information aboutethnicity
and race, as well as itsgeneral filing instructions
guide. If youd like a
timeline for HMDA the CFPB has set out keydates to
observe. And lastly on HMDA any
technical questions can be emailed

The CFPB is also
involved inmortgage
loan origination standardsandmortgage

The CFPB publishes Supervisory
Highlights by which it shares key
findings in order to help industry limit risks to consumers and comply with
federal consumer financial law. Each supervisory Highlight publication
shares recent examination findings, including information about recent
enforcement actions

Specific regulatory
implementation questions can be e-mailed, or
call 202-435-7700. And, of course, whistleblower complaints can be
confidentially e-mailed towhistlerblower@consumerfinance.govor call
(855) 695 7974.

In a related topic,
residential mortgage lenders found the federal Know Before You Owe
mortgage disclosure rule (formally known as TRID) to be the source of most of
control (QC)headaches in 2016,
the first full year of the rules implementation. TRID accounted for 12 of the
top 15 findings of quality control (QC) issues in 2016, according to a review
by MetaSource of thousands ofpost-close
QC auditsconducted by the
Utah-based third party mortgage compliance service provider.

Interest rates

Up some, down some – so
it goes for much of life, including rates, and this week its been up as the
strength of the US economy continues to be reflected in economic releases.
Yesterday morning, for example, theADP employment report came in well
above forecasts. And although there is often a questionable correlation between
it and tomorrows employment data, strong is strong, and rates acted
accordingly with the yield on the 10-year touching 2.58% before ending the day
at 2.55%. (Agency MBS prices worsened nearly .250.)

So, if an increase
wasnt priced into the market already, it is now. But that doesnt stop
potentially market moving news from coming out. This morning we will have the
rate decision from the ECB (European Central Bank). It is expected to leave
rates unchanged. On this side of The Pond well February layoffs according to
Challenger, Initial Jobless Claims, and February import/export prices. If you
have some loose change on the dresser you can bid on the $12 billion reopened
30-year bond auction.

Jobs and Announcements

In personnel and job news,Sierra Pacific Mortgageis excited to welcomeAl Crisanty. Al most recently served as Director of Wholesale Lending for Michigan Mutual. Additionally, Al held senior level positions in secondary marketing as well as correspondent lending before returning to wholesale mortgage banking.He joins Sierra Pacific to further develop the Midwest and Southwest Wholesale markets. If anyone wants to join Al in dominating one of these states,please contactSierra Pacific today.

AnnieMac Home Mortgageexpanded its retail footprint early in Q1, already launching 4 new markets(Philadelphia Pa, Plano Texas, Central Florida, Houston Texas) with another 4 markets slated to open next 45 days. AnnieMac has plans to open 20+ new markets in 2017 while adding 1.5 new funded units in organic fundings per LO across sales. How we get there is the platform magic:AnnieMacs Realtor Productivity Platform will multiply an agents production. By contrast, cost-sharing models like MSAs and lead share models only reduce an agent or brokers expense ledger. The simple principle of give before you expect to receive provides our loan officers with a model far superior to the pay to play approach, noted Paul Zinn, SVP.Coupled with a National Lunch amp; Learn Platform, Live in the Market Road Show (featuring our sales platform), Ops at 19 months in a row hitting SLAs, killer TBD underwrite model, an internal appraisal platform and much more giving us an irresistible model to both originators and referral partners alike. Learn more by reaching out today toPaul Zinn.

In credit union hiring news,Financial Partnersis hiring loan officers. Financial Partners is a $1B Federal Credit Union based in Downey, CA with a branch network throughout state. We are recruiting experienced LOs with seasoned and producing referral relationships to fill openings throughout our branch network. Our product menu includes standard Agency, Government and stellar Portfolio programs. Please contactDuke Zupanskior visit FPs website above.

PRMGhiredGary Malisas its newPartner and Chief Strategy amp; Capital Markets Officer. Gary is a25-year veteranin the mortgage industry, and will be overseeing and advising Corporate Strategy and Capital Markets for PRMG. This includes all areas of Secondary Marketing, Risk, Strategic Operations, Warehouse Lending, Compliance, Credit Policy, Ancillary Services, Valuations, and Acquisitions, all of which will impact growth, risk, budgeting, efficiency, execution and overall strategy for the company. Mr. Malis has a distinguished list of past accomplishments including an MBA from the University of Arizona, being one of the founding partners forFirst Magnus Financial Corporation,Capital Markets Officer for StoneWater Mortgage (the predecessor ofCaliber Funding),andwas theManaging Director forStrategic Executive Services. VotedNo. 1 of the 50 Best Companies to Work for in America,PRMG employees over 1,300 people with 93 branches across the country.To learn more contactPaul Lucido, PRMGs National Marketing Director.

LendingQB and BeSmartee have joined forces to co-present a free webinar called, What happens after liftoff?taking place on Wednesday, March 15 at 1 pm CST/11 am PST. Participants will learn how POS systems should interact with LOS technology to deliver the lift that borrower and lenders expect from an online experience. They will review how to align a POS with consumers and lenders expectations, the key components a good POS possesses and why your applicants care, and how to utilize technology to seamlessly integrate to your LOS. The webinar is limited to 50 participants, soregister today.

Yesterday the commentary mentioned a couple job fairs in specific locations, but I left off the sites. Here you go: In retail job news,there will be two unique Mortgage Originator Career Fairs offered by JBSA in March, the 15-17 inDenverand the 20-22 inSan Antonio. The event offers Loan Officers and Branch Managers the opportunity, in a casual environment, to meet withJeff Bombichwith the goal of matching them up with a specific lender to find the best possible employment match.

Texas Vet and VA Home Loans help vets with mortgage needs

SAN ANTONIO – Texas Vet and VA Home Loans specializes in helping active military and Veterans with their home loan needs.

“The VA just increased the amount that a Veteran can use to buy a home, Pat Fitzgerald, who specializes in military loans, said. It’s now up to $424,000, with no down payment.”

A veteran can have two VA loans at the same time, Fitzgerald said.

“So many people think that’s not true, he said. The way that happens is if a veteran had a home – in another city for example – and he turned it into a rental, then got transferred here and wants to buy a home. He can have two VA Loans at the same time.”

If you need help qualifying for a VA loan, you may have a cosigner.

“Anyone that cosigns (a VA Loan) has to have VA benefits and they all have to live in the home at the same time,” Fitzgerald said.

Fitzgerald said to call 210-215-4400 with any questions.

It doesn’t cost a penny to talk, he said.

For more information and to see if you qualify for a VA loan, visit

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