Jumbo loans are available to buyers in the Madison, Wisconsin, area and are also known as non-conforming mortgages. Jumbo loans can be much more flexible for homebuyers than many people realize. Wisconsin jumbo loans typically have lower rates than many other mortgage options. Jumbo loans allow buyers to purchase a more expensive home with a loan amount above the conforming limit set by the Federal Housing Finance Agency. In most areas of the US, the conforming loan limit is $417,000. However, the limit is $625,500 in higher-cost areas like Los Angeles, New York City, and San Francisco.

Jumbo loans are a great solution for a Wisconsin homebuyer with a low debt-to-income (DTI) ratio and higher credit score, but without enough funds to bring the loan amount under the conforming limit.

Jumbo Loan Highlights:

• One loan for the entire amount
• Primary home, second home or investment property
• Finance a home over the maximum loan amount established by the Federal Housing Finance Agency
• Down payments are flexible with as little as 10% down

Jumbo Loan Eligibility:

To qualify for a jumbo loan, borrowers need to prove income and reserves to cover mortgage payments. When filling out your application, you will need to include recent pay stubs dating back at least 30 days, and W2 tax forms stretching back two years to prove income.

Self-employed borrowers will need to show two years of tax returns to support self-employment pay and at least 60 days of bank statements. 6 months of savings reserves to cover the new mortgage payments will also need to be supported.

Credit Scores: Because of the higher dollar amount of this loan, the credit score requirement for a jumbo loan is higher for these applicants. You’ll need a credit score of 680 or better to qualify for most jumbo home loans in Wisconsin.However, lenders set their own credit score requirements, and some may require even higher scores for approval.

Documentation: Be prepared to provide proper documentation as part of your application for a jumbo loan.

• Proof of income from all sources
• Proof of liquid assets (bank statements)
• Documentation any other loans
• Proof of ownership of non-liquid assets, like other owned properties

Down Payment: Jumbo loan applicants may be able to make a lower down payment. In the past, 20%-30% was the required down payment amount for jumbo loans in Wisconsin. Today, with good credit, usually only 10% down is required. However, putting a smaller amount down will affect the terms of your mortgage.