About Jumbo Mortgage Guidelines

Licensed in more than 40 states, direct mortgage lender WEI Mortgage Corporation was founded in 2002. Along with refinancing programs and veteran loans, WEI Mortgage Corporation provides a number of options, including jumbo mortgages.

Jumbo mortgages are also known as nonconforming mortgages, as they are the loans made when borrowers don’t conform to the guidelines established by Fannie Mae and Freddie Mac. The conforming loan size limit averages $417,000 but can be as high as $625,000.

Because jumbo mortgages do not have to follow the federal guidelines that conforming mortgages do, down payments can be as low as 10 percent rather than the traditional 20 percent. Although jumbo mortgage rates are often higher and require lower debt-to-income ratios, they do not require mortgage insurance. Additionally, they may offer re-amortization, which lowers the borrower’s monthly payment over the period of the loan.

To qualify, self-employed borrowers need to provide two years’ worth of W-2s, as well as income verification for the last 60 days. Lenders also require that borrowers have enough liquid assets to cover up to six months of mortgage payments.

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Ability-to-Repay Rule Provides New Provisions for Lenders

Based in the Washington, D.C., area, WEI Mortgage Corporation helps consumers realize their dream of home ownership. WEI Mortgage Corporation provides a range of financial products and lending services while adhering to industry guidelines.

In recent history, some mortgage lenders made loans to consumers without regard to their ability to repay the loan. A lack of analysis of a consumer’s existing debts and qualifications based on introductory rates that would escalate after a few years caused many consumers to assume mortgage payments they could not ultimately afford. The resulting mortgage crisis led to a major economic recession in the United States.

In response to this problem, the Consumer Financial Protection Bureau (CFPB) is working to implement laws to require lenders to evaluate a consumer’s ability to pay before initiating any home mortgage loan. Under the new guidelines, to make adequate ability-to-repay determinations, loan underwriters must assess several key factors, including current income, current employment, debt-to-income ratio, credit history, and more. The ability-to-repay rule takes effect on January 10, 2014.

In May 2013, the Bureau amended the original ruling to address specific lending needs of small creditors, including community banks, which have less than $2 billion in assets and make 500 or fewer first-lien mortgages per year. These amended rules allow small lenders to make loans to consumers with a greater than 43 percent debt-to-income ratio and allows short-term continuation of mortgage loans with balloon payment features.