We have a 1st and 2nd combo financing option for Jumbo homebuyers that only requires a 10% down payment on a purchase up to $1,500,000. This program allows a buyer to take out a first mortgage up to 80% of the property value, with a HELOC up to 90%, which enables the buyer to obtain the lowest overall mortgage payment. Also, if a Conventional or FHA $424,000 first mortgage or High Balance county limit is too low for the values/sales prices in your market, a buyer can now use this program by taking a conventional first mortgage with a HELOC behind it. Check out how to qualify for this program.
3 Purchase Scenarios to use the 1st and 2nd Combo Jumbo Mortgage Program
Here are 3 different purchase scenarios where buyers can use this 1st and 2nd mortgage program to take advantage of lower rates on a first mortgage, and obtain a HELOC interest only payment on the 2nd mortgage, which will give them a lower overall monthly mortgage payment.
Purchase Scenario #1.
The 10% down Jumbo Mortgage Program will help more buyers with limited down payment funds, finance a home in markets like San Diego, Orange County, LA and SF counties, where a jumbo loan is needed in many areas to purchase a home.
Most jumbo programs out there require 20% down to purchase a home up to $1.5 Million. This amounts to a down payment of $300k. There are many jumbo buyers who do not have this much in funds available.
The few lenders out there that allow 10% down financing on a jumbo loan, require one loan amount up to 90% of the property value. The rate can be very high because of that.
Let’s take a $1,500,000 purchase purchase for example. Instead of having to come up with a 20% down payment and a $300k down payment, buyers can finance a first mortgage up to 80% of the property value, which is a loan amount of $1,200,000. This allows them to obtain a much lower rate.
Then they finance a HELOC for $150k behind the first. The down payment requirement is only $150k.
Purchase Scenario #2.
Buyers can now finance a home up to $750k and use conventional high balance financing on the first mortgage, and a HELOC on the 2nd mortgage.
Let’s take a $750k purchase in San Diego for example. A buyer in San Diego is allowed to finance a loan amount up to $612k with conventional financing.
On this $750k purchase, the buyer will get a 80% first mortgage at $600k, this allows them to take advantage of the excellent rates available with conventional financing.
The buyer will then finance a $75k HELOC behind the first. The down payment requirement is only $75k.
Purchase Scenario #3.
This program is also a great solution for buyers and sellers in Riverside and San Bernardino counties, where the maximum conventional loan limit is $424k and the maximum FHA loan limit is only $379,500.
Many buyers and sellers struggle to get financing in these counties due to these loan limits.
Let’s take a $525k purchase price in Riverside for example. A buyer in Riverside is allowed to finance a loan amount up to $424k with conventional financing.
On this $525k purchase, the buyer will get a 80% first mortgage at $420k, this allows them to take advantage of the excellent rates available with conventional financing.
The buyer will then finance a $52,500 HELOC behind the first. The down payment requirement is only $52,500.
Each county in California has it’s own Conventional High Balance loan limit, click HERE to check your county loan limit, or contact me for more details.
Frequently Asked Questions for the 1st and 2nd Combo Jumbo Mortgage Program
Here are the most frequently asked questions that buyers and real estate agents have in regards to this program.
1. What is the maximum loan amount?
The maximum loan amount is $1,200,000 on the first mortgage. Buyers can finance a $150k HELOC behind the first.
2. Can I receive the down payment as a gift?
Yes, all of the down payment can be gifted on this program. Closing costs can also be gifted if needed.
3. What credit score is required to qualify for this program?
We require a 700 credit score to qualify for this loan program.
4. Is this program available for 1st time buyers only?
Yes it is available to all homebuyers.
5. Is private mortgage insurance “PMI” required with this program?
There is no private mortgage insurance “PMI” required with this program. Obtaining a first mortgage at 80% eliminates the requirement for private mortgage insurance.
7. Can I use this program on 2nd homes and investment properties?
This program is available on 2nd homes, not investment properties.
9. Do condos and town homes qualify for this program?
Yes, you can also purchase a condo or town home using this program.
10. Can I use an adjustable-rate mortgage with the first mortgage?
Yes you can use an adjustable rate mortgage on the first mortgage.
Two other reasons to use this program
1. Get a HELOC, Avoid Mortgage insurance/Impounds
A HELOC 2nd mortgage is a flexible financing tool that many consumers ask for. Borrowers can take a full or partial draw. They can pay down the balance and use it again during the 10 year Draw Period.
Borrowers only pay interest on the amount drawn, so it’s a great tool for home improvement or any future financing plans. HELOC interest is also tax deductible.
2. Borrowers that want to Purchase before selling Departing Residence.
Add a HELOC to your Borrowers Purchase transaction when they need to make a non-contingent offer. This eliminates pressure to sell departing property and allows time to stage and show departing residence for best offers.
If you would like to get approved for this program, or you have any questions about any of this information above, please feel free to contact me directly at 858-442-2686. I look forward to chatting soon.
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