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Many home buyers in Florida are using jumbo loans to finance their home purchases, so knowing how to qualify for a lower jumbo mortgage rate is essential. Jumbo loans are mortgage loans which exceed the conforming loan limits (CLLs) put in place by Fannie Mae, Freddie Mac and the Federal Housing Finance Agency (FHFA). If your loan amount is higher than the current limits, you will need to apply for a jumbo loan.
Florida Conforming Loan Limits
In most Florida real estate markets, the conforming loan limit for a single-unit home in 2023 is $726,200. In some higher-priced markets throughout the country, the limit will be $1,089,300. These numbers will also be higher for multi-family properties. The more units a home/property has, the higher the CLL will be.
For 2023, Monroe County is the only Florida market with a higher conforming loan limit (see the numbers below). For all other locations in Florida, the standard limits will apply:
Standard Florida Conforming Loan Limits:
• 1-Unit: $726,200
• 2-Unit: $929,850
• 3-Unit: $1,123,900
• 4-Unit: $1,396,800
Standard Conforming Loan Limits for Monroe County, FL:
• 1-Unit: $874,000
• 2-Unit: $1,118,900
• 3-Unit: $1,352,450
• 4-Unit: $1,680,800
Obviously, there are some expensive homes in Florida. You have luxury homes in South Florida locations like Miami-Dade County, Broward County and Palm Beach County. Then, there are Gulf Coast communities like Naples, Sanibel Island and Clearwater that have higher-priced beachfront properties and mansions. In other words, there are a lot of houses throughout Florida that will require jumbo loans if the buyer is funding the purchase through a mortgage loan.
Jumbo Mortgage Rates in Florida
In general, jumbo loans will have higher mortgage interest rates attached. They will also have higher qualification standards for borrowers. Because jumbo loans aren’t insured by Fannie Mae or Freddie Mac, the lender is assuming much more risk when issuing these high-priced loans. Jumbo loans aren’t just handed out to anyone who applies. You must meet strict qualification standards and you should expect to pay a higher-than-average mortgage rate compared to a conventional home loan that falls within the conforming loan limits.
So, how do you qualify for the lowest possible jumbo mortgage rate in Florida? Having a stronger financial situation will help a lot. Mortgage lenders are typically looking for a credit rating (FICO score) of at least 700 and a debt-to-income (DTI) ratio of 43% or less. They are looking for a steady income and good employment history to show that you’ll be able to make the monthly mortgage payments in full and on time.
Jumbo Loan Down Payments in Florida
Another major factor in jumbo loan qualification will be your down payment. The more money you can put down, the better off you will be when applying for a jumbo loan in Florida. A higher down payment also usually means a lower qualified mortgage rate. A 20% down payment is essentially the standard benchmark for jumbo loans, though some mortgage lenders may require a down payment as high as 25% or 30%. This down payment minimum may depend on the lender and your financial situation. Those with weaker finances may be required to put more down than those who have strong financial qualification standards.
Some borrowers may qualify for jumbo loans with 10 down, and there are even some 5-down jumbo loans available. Those paying less than 20% down can expect to pay mortgage insurance (PMI/MIP), which will increase the monthly mortgage payments. A higher down payment will also help lower your jumbo mortgage rate in most instances. Many jumbo loan borrowers are move-up home buyers applying equity from another sale. Whether you are a move-up buyer or first-time home buyer in Florida, you will want to put as much down as you can afford when applying for a jumbo loan. It can make a huge difference in terms of loan qualification in general, as well as your jumbo mortgage rate.
To learn more about jumbo loans in Florida and to get started with your mortgage pre-approval, contact Moreira Team | MortgageRight today.
