Description of Massachusetts Super Jumbo Mortgages
Super jumbo mortgages are simply very large jumbo mortgages which are generally defined by lenders as those with loan amounts $750,000 and greater. Similar to standard jumbo mortgages, Massachusetts super jumbo mortgages are not guaranteed by Fannie Mae or Freddie Mac which only purchase mortgages with loan amounts of $417,000 or less.
Lenders consider these loans even more risky than jumbo loans and compensate for that risk by charging higher interest rates and requiring even greater down payments. The minimum down payment for Massachusetts super jumbo loans typically range from 25% – 50% depending on the size of the loan amount with higher loan amounts requiring greater down payments.
Underwriting guidelines for Massachusetts super jumbo mortgages also are more conservative than for standard jumbo mortgages. Typical guidelines require 720+ FICO scores, total debt-to-income ratios no higher than 40% – 45%, significant reserves (6-12 months of PITI) and often mandate two appraisals of the property.
Lenders offer the best mortgage rates for Massachusetts super jumbo loans on adjustable rate mortgages . Fixed rates for super jumbo mortgages tend to be much higher than for those on conforming or standard jumbo loans.
Advantages of Massachusetts Super Jumbo Mortgages
- Allow borrowers to purchase a larger, more expensive home
- Offer a financing source to help avoid depleting assets in higher yielding investments
Disadvantages of Massachusetts Super Jumbo Mortgages
- Interest rate is higher than a jumbo mortgage, especially for fixed rate super jumbo loans
- Require higher down payments than jumbo mortgages (typically 25% – 50%)
- Stricter underwriting requirements to qualify for financing
Borrowers Best Suited for Massachusetts Super Jumbo Mortgages
- High income earners that can afford a higher monthly mortgage payment
- Live in high cost areas where real estate is more expensive
Borrowers Least Suited for Massachusetts Super Jumbo Mortgages
- Borrowers stretching to afford a home
