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Jumbo Loan Credit Score Requirements
What are the minimum credit and income standards to qualify for a jumbo loan?
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3 Replies
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We are seeing lenders asking for scores in the mid 600’s at a minimum. The higher the credit score, the lower the down payment and the better the rate will be.
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I think will lower credit scores, non-QM jumbo loans require 25% down payment. Non-QM Jumbo Loans are great loan programs for self-employed borrowers, borrowers with bad credit, borrowers with credit scores down to 600 FICO, and homebuyers with no income verification.
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Credit and Income Standards for Lenders Under Jumbo Loan Programs
Traditional Jumbo Loans
Credit Standards: Primary Cream Credit Scores: It’s common to see a minimum credit score of 700 in most cases. Some lenders may have no issues accepting scores in the region of 680 but will impose criteria or interest rates that are less favorable.
Income Standards:
Documentation: Most borrowers will likely provide wage documentation in the standard tax form, W-2, and pay stubs.
Debt-to-income (DTI) Ratio: DTI ratio of 36% front-end and 43% back-end debt-to-income ratio on traditional jumbo loans.
Non-QM Jumbo Loans
Credit Standards:
Minimum benchmark: Non-QM jumbo loans can have leeway regarding credits. Benchmarks will be expected to be scored between 620 and 680 depending on the lending institution and their program for the specific loan.
Income Standards:
Flexible Income Verification: Alternative documentation can be allowed when issuing non-QM loans. For example, self-employment borrowers can present bank statements as evidence of income or income calculations based on the individual’s assets.
DTI Ratio: Non-QM lenders appear to be slightly more forgiving regarding the DTI ratio, and in some cases, a common DTI ratio of 50 percent or more can be accepted, considering the borrower has a desirable financial profile and considerable wealth.
As far as Jumbo loans are concerned:
Credit Rating: 700 (it may go down occasionally)
DTI Ratio – in most cases, not more than 43%
Non-QM Jumbo Loans:
Credit Rating: 620—680
DTI Ratio, perhaps 50% or more – subject to the specific lender’s discretion.
Always check with any lender in particular because such criteria may vary substantially according to circumstances and conditions in the market.