ON TREND New Jumbo Mortgage Limits

by Inlanta Mortgage

WHETHER YOU’RE HOT ON the trail of your “forever” home, investment property, or you just want to capitalize the considerable equity you’ve accumulated, there may be ways you can leverage new Jumbo Mortgage limits to live your dream.

For 2022 in Michigan, any mortgage over $647,200 is considered “Jumbo” – meaning it’s not a conventional mortgage. Changes in the jumbo mortgage environment over the last few years combined with low mortgage rates make these loans much more palatable for savvy players.

Here are some ways to put this to work in your own wealth-building playbook:

FOR BUYERS

• On one hand, the ceiling has been raised on what can be financed as a conventional mortgage, meaning you do not have to sacrifice a lower rate to offer your “highest and best” in a competitive market. If this spring market is anything like 2021, you’ll want to be house hunting with a rock-solid pre-qualification with a generous ceiling.

• On the other hand, the gap between interest rates on conventional vs. jumbo loans has narrowed and is sometimes nonexistent. Loan-

To-Value requirements aren’t as strict as they used to be. This means if you can afford a higher-value property you don’t need to sacrifice fluidity to buy it. • Example: To purchase a $800,000 home with a conventional mortgage – which is limited to $647,200 you’d need to put an extra $152,800 down. With a jumbo loan at 10% down, you’d bring $80,000 cash to the table, freeing up $72,800 which will earn far more invested than the interest cost of the loan. FOR CASH-OUT REFINANCING

• Real estate investment is a great tool that can bring balance to your asset portfolio. The average return on rental properties is 15%. Vacancy rates are at a 30-year low, rents have gone up for 29 consecutive quarters, and high-income households have driven more than 75% of the renter growth, according to a Harvard study. If you’re ready to build wealth through real estate investment, you could:

Maximize Liquidity for Rental Acquisition • Use a Jumbo Cash-Out Refi on your primary residence to finance the cash purchase and/or improvement of rental properties, with the option to use the income steam to pay down the Jumbo loan. This move would make you an agile purchaser in a tight market.

FOR HELOC CONSOLIDATION & LIQUIDITY:

• In this scenario, you can take advantage of the lower rates of a conventional mortgage with a higher ceiling OR • Leverage a Jumbo refi to consolidate and further amortize your liability

• You'll need a strong credit history, typically a

FICO credit score of 700 or higher. • You can get approved with a debt-to-income ratio as high as 43%, but these loans often have higher reserve requirements. • Like a conventional mortgage, the property's appraisal must justify the price –you may need two appraisals to do so.

Building wealth through your real estate moves takes strategy and a deep grasp of what’s possible. Explore all your options for a winning playbook.

Jonathan Arnold Branch manager at the Ada office of Inlanta Mortgage NMLS# 1016. Connect with him at MoveUpMi.com. Jonathan is also licensed in Florida – learn more at FloridaHomeLoanSolutions.com