What is the Limit for Jumbo Loans in Florida?

When purchasing a new property, you hear about a lot of financing options. But have you explored a jumbo loan and wondered what your limit would be in Florida? Before considering this type of financing, it’s important to know the limitations and conditions you’d face.

Below, you’ll find everything you need to know about the jumbo loan limit in Florida, how you can get this form of financing, and whether it’s the right choice for you.

What Is a Jumbo Loan?

A jumbo loan or mortgage is a mortgage loan that has higher limits than a conventional loan. Typically, the conforming loan limit in Florida is $647,200 for a single-family home. This applies to most other states as well. Anything larger than that amount is considered a jumbo loan. Those limits are set by the Federal Housing Finance Agency (FHFA).

Loans below the $647,200 cap are the only ones that can be secured. However, the jumbo loan limit in Florida may vary in high-cost markets.

Since jumbo financing isn’t covered or regulated by the Federal Housing Finance Agency, as they are riskier for the lender. Therefore, this can be more difficult to obtain for borrowers as well, since lenders will be more cautious about who they lend to beyond the jumbo loan limit in Florida.

In Florida, most jumbo mortgages don’t require a monthly PMI payment. However, it’s important to keep in mind that if this property will not be your primary home, you will likely have to pay a larger down payment. If your loan is larger than $1.5 million, it may also require a larger down payment.

Who Is Eligible for a Jumbo Loan?

The qualifications for jumbo loans can be stricter as they are larger financial investments. However, you may be surprised about your ability to qualify for financing beyond the jumbo loan limit in Florida.

Qualifying Factors

Depending on your lender, they may have certain requirements of your FICO score. This requirement may often be of 700 or higher to qualify for a jumbo mortgage.

It is also essential to consider your debt-to-income ratio. This is your monthly debt payments compared to what you’re bringing in each month in income. You may consider paying off your debts before investing in a jumbo mortgage, as higher debt could disqualify you. You could also benefit from having substantial cash reserves to offset any debts.

Documentation

If you think you may qualify, you will want to start collecting paperwork. Having extensive paperwork at the ready that documents your financial standing will be vital as you go through the jumbo mortgage process. This includes:

• Complete tax returns
• W-2s
• 1099s
• Bank statements
• Documentation on investments
• Housing records

Lender Appraisal

Sometimes, lenders may ask for an appraisal of the property you wish to obtain with your financing. Be prepared for this possibility as well. If you hold property in another state besides Florida, be sure to properly collect all the needed information about that property as well.

Before the appraisal, consider if you’ll be in a higher-cost market. In this case, you’ll need to shoot for an appraisal of $970,800.

How to Apply for a Jumbo Loan

To apply for a jumbo loan, you’ll want to begin by thinking about what you want out of your property investment.

Collecting Paperwork

Once you are certain you are ready to proceed, you should begin collecting all the aforementioned paperwork. File it away and itemize it so it is easy to sort through. This may be the longest part of your jumbo loan process, as most of these process in about the same amount of time as a traditional loan. This would be roughly 3 weeks, depending on your specific circumstances.

Preapproval Process

Next, you should begin your preapproval process by speaking to your lender about a jumbo mortgage. Once you receive your preapproval letter, it signifies the intent to the seller that you intend to buy in the future. After this, you can start your jumbo loan application.

The lender will then order a credit report, check your ability to pay back the debt, check your other sources of debt, and look into other monthly obligations or payments you may have, such as vehicle purchases, or other property investments. They will also review all your income information. Specifically, they will be looking at the last two years of steady employment.

Appraisal and Underwriter

If your lender chooses an appraisal, the loan information will then go to the lender’s underwriter. This is the person responsible for ensuring that the loan aligns with all proper guidelines.

Approval

If you meet all these requirements and potentially some supplemental requirements depending on your lender, you’ll have your mortgage. You’re all set to purchase your new property.

Considerations for Before You Apply

Jumbo Loan Limit in Florida: Know Your Neighborhood

In Florida, the highest-cost market is in Monroe county, better known as Key West. If you’re looking to invest in the Key West area, note that the bottom limit may be different. The higher the cost of housing in the area, the higher the threshold to receive a jumbo mortgage.

What Does Your Future Look Like?

You can’t go into any financing without considering how this will play into your future finances.
To better understand if this is the right type of mortgage, here are some questions to consider:

• If this is for a second home, will you be able to maintain it?
• Where do you see yourself in the coming years?
• What activities are important to you? Will this loan interrupt those activities?
• How will a jumbo loan affect your regular income?
• How will this impact you on a day-to-day basis?

By answering these questions, you’ll set yourself on the right path to borrowing wisely and successfully.

Start Your Jumbo Loan Journey Today

Bearing all the information in mind, you could be on your way to a brand new investment in your future.
If you’re looking for guidance on the best financing choices for your future property purchases, don’t hesitate to contact the Associates Home Loan team to learn more about your options.