Utah Jumbo Mortgage Home Loans eligibility - Home Mortgages
October 21, 2017 801.473.3154dana@utloanofficer.com First Class Home Mortgage (NMLS 1843) | South Jordan, UT

Utah Jumbo Loans

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Considering a Utah Jumbo Mortgage Loan? Read this first

If you are looking at more expensive properties in Utah, you’ve probably heard the term jumbo loan.

Any home loan that exceeds the conforming limit ($417,000 throughout most of the U.S.) will be subject to different, tougher requirements – set forth by the group of investors behind the lender issuing the loan.

For Utah specific 2017 conforming limits, see my article What is a Conventional Mortgage

Here is what you should expect when applying for a Utah Jumbo loan:

  • you will be required to make a larger downpayment, typically of at least 20-25% of the loan amount;
  • your reserves or emergency funds should cover your mortgage payment for a minimum of 6 to 12 months
  • you’ll need a credit score of at least 720 (680 might be acceptable in the right circumstances)
  • your debt to income cannot exceed 43%, in some cases 40%
  • expect a higher interest rate and possibly a request for 2 separate appraisals to be performed.

After comparing a few different lenders that offer Utah Jumbo loans, I came up with an eligibility matrix that will explain the basics.

As always, your opinion and questions are welcomed by e-mail to dana@utloanofficer.com

Utah Jumbo Loan Eligibility Matrix

Utah / Colorado Jumbo Loan Eligibility Matrix
Note that investment properties are ineligible under current jumbo loan guidelines. 

 

For Utah Jumbo loan amounts up to $850,000, it is worth mentioning the following alternative.

While most jumbo loans require a minimum downpayment of 20%, some mortgage insurance companies like Radian will insure part of a jumbo loan, and help lenders provide financing.

In this situation, the borrower only needs to come up with 10% downpayment. 

The 90% loan to value eligibility matrix looks like this:

Utah / Colorado Jumbo Loans up to 90 percent

Utah Jumbo mortgage loans follow conforming guidelines for the most part, with a few noticeable differences. 

  • non occupant co-borrowers and non-arms length transactions are not allowed; 
  • borrowers with past loan modifications are ineligible 
  • there is at least a 5 year waiting period after bankruptcy/ short sale/ deed-in-lieu and 7 year after a foreclosure;
  • all account on the credit report must be current and present – no +60day lates in the past 2 years
  • gift funds are not permitted – that includes the gift of equity; the cash to close must come strictly from the borrowers own funds;
  • interested party contributions, such as seller paid closing costs are limited to 6% of the loan amount.

 

There are other ways to help you purchase or refinance a higher priced home in Utah without applying for a jumbo loan. The most obvious solution is to provide a higher downpayment, making sure that the requested loan amount fits the conforming Utah County limits.

If that’s not possible, then you will need to shop around for a lender that will allow a first and a second mortgage, where the first mortgage is a conforming loan, and the second is a HELOC (Home Equity Line of Credit) or an Equity Loan (fixed second mortgage). Not easy, but doable.  

Please contact me with your questions, either by e-mail at dana@utloanofficer.com or by phone at (801) 473-3154 (call/text).

Start an online application now.

 

Happy House Hunting!

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