Archives for March 2021

What’s a Jumbo Loan and How Does It Work

March 30, 2021 by ascendmo

While some homebuyers might opt to purchase a property outright in cash, almost everyone finances the purchase by obtaining a mortgage from a lender.

One of the most important aspects of looking for your new home is determining what type of mortgage is right for you. However, if you need to take out a very high-value mortgage, the process is a bit different than getting a conventional loan.

If you’re trying to buy the house of your dreams, it’s possible that you will need a jumbo loan to finance the purchase.

What are jumbo loans, and how do they work? Let’s take a look at everything you need to know.

What Is a Jumbo Loan?

You might also hear jumbo loans referred to as Jumbo mortgages. This is a specific type of financing that exceeds the Federal Housing Finance Agency (FHFA) conforming loan limit.

While conventional mortgages are eligible to be guaranteed, purchased, or securitized by Freddie Mac or Fannie Mae, Jumbo loans are not. This type of loan was created in order to help people finance luxury homes and properties in local real estate markets that are highly competitive.

There are unique tax implications and underwriting requirements that come along with Jumbo mortgages. After the real estate market has recovered after the 2008 housing crisis, these kinds of mortgages have become increasingly popular.

The conforming loan limit size set by the FHFA does not change frequently but is set on an annual basis. Depending on the area of the state and even the county, the limits can differ.

How Do Jumbo Loans Work?

Is the house that you are dreaming about priced somewhere near $575,000 or more? If you don’t have that kind of money lying around, you are most likely going to need a jumbo loan.

There are more rigorous credit requirements for taking out a jumbo loan than there are for taking out a conventional mortgage. The reason for this is that jumbo loans carry more credit risk for the lender both because of how much money is involved and also because the loans are not guaranteed by Freddie Mac or Fannie Mae.

There are minimum requirements that you will have to meet in order to qualify for a jumbo loan. In the next section, we will take a look at what you will need in order to be eligible.

How Do You Qualify For a Jumbo Loan?

Debt-to-Income Ratio

One thing that will be considered by potential lenders is your debt to income ratio (DTI). The reason why this is important is that they want to make sure that you do not become over-leveraged. If you have plentiful cash reserves, however, they might be more flexible.

Credit Score

Different lenders will have different requirements when it comes to your credit score. Some might need you to have a credit score of over 720, while others might simply need it to be over 680.

Documentation

You will need to be able to prove the health of your finances to any lender for jumbo loans in MI. This will require extensive documentation. You should be ready to provide bank statements, your full tax returns, 1099s, W-2s, and any investment account information.

Cash Reserves

If you have quite a bit of money in the bank, you have a better chance of being approved for a jumbo loan. Sometimes, a lender might ask you to prove that you have enough cash that you could cover several months, to one full year of the mortgage payment with your cash reserves alone.

Appraisals

A second home appraisal might be required for the property that you are trying to buy. This isn’t always the case, but you should be prepared for the possibility.

Jumbo Loan Rates

It used to be the case that jumbo loans had higher interest rates than conventional loans. However, the difference in interest rates has been getting smaller in recent years.

Down Payment on a Jumbo Loan

Down payment requirements have also gotten slightly less strict in the last several years for jumbo loans. In the past, lenders often required that buyers put down 30% of the purchase price as a down payment.

These days, you might be able to get a jumbo loan with a downpayment of as low as 10 or 15% of the purchase price. Jumbo loans are similar to other mortgages and that there are benefits to making a higher down payment. Some loans will not have mortgage insurance, even with less than 20% down.

Who Should Take Out a Jumbo Loan?

Jumbo loans are typically considered to be most appropriate for high-income earners that make somewhere above $200,000 or more of income every year. This segment of the population is sometimes known by the acronym HENRY, which stands for “high earners, not rich yet.” In short, these are individuals who have high income but have not yet accumulated a lot of other assets or millions of dollars in the bank.

This segment of the population typically has more established credit histories and better credit scores than the average home buyer. They also commonly have retirement accounts that are more solidly established.

Are You Shopping For a Jumbo Loan?

Obtaining financing is one of the most important steps of the home buying process. When you are shopping around for jumbo loans in Michigan, you want to make sure that you are working with a lender that can get you the fastest closing and serve you the best.

Are you looking around at the options for jumbo loans? If so, click here to start the loan application process today.

Jumbo vs Conventional Mortgage: What’s the Difference?

March 22, 2021 by Ascend Mortgage

If you’re wondering what the difference between a jumbo vs conventional mortgage is, you’ve come to the right place. We’ve rounded up the pros and cons of each and the key differences between the two.

Choosing the right mortgage could be the difference between saving money on interest and better loan terms. Whether you’re searching for a million-dollar home or a $200,000 home, your mortgage will look different.

This is why it’s helpful to understand the differences between the two loans. From the lending requirements to the home prices, think of this as your go-to guide to jumbo and conventional mortgages.

What Is a Jumbo Loan?

A jumbo mortgage is a loan taken out to finance a home. The key difference with a jumbo loan is that they are typically used for higher-priced or luxury real estate. In high-demand markets, for example, where real estate is at a premium, homeowners often use jumbo loans.

A jumbo loan is considered non-conforming. That means that a jumbo loan isn’t backed by Freddie Mac or Fannie Mae. They are outside of the Federal Housing Finance Agency’s (FHFA) loan restrictions.

Another key difference between a jumbo loan and a conventional loan is the loan terms. You’ll typically see much stricter loan requirements for a jumbo loan. This is because the monthly payments are typically higher than with a conventional loan.

Qualifying for a Jumbo Loan

To make sure a buyer can keep up with the high mortgage payments, your lender will need to see excellent credit, high income, and a low debt-to-income ratio. Your debt to income ratio is the amount of debt you have compared to the income you have coming in.

In terms of down payments and interest rates, the gap between the two types of mortgages isn’t as drastic as it once was. It’s not uncommon to see similar down payments and interest rates between the two mortgages.

Your specific down payment requirements and the loan terms you’re given will depend on your own unique financial situation. Typically, the better your credit, the lower your interest rate will be regardless of the type of loan you choose.

Conventional Mortgage

As with a jumbo loan, you’ll need a down payment and a minimum credit score to qualify for a conventional mortgage. You’ll also need to meet certain income requirements. The lower your debt-to-income ratio, the better your loan terms are as well.

As mentioned above, jumbo loans are considered non-conforming. A conventional loan can be either non-conforming or conforming. A conforming loan must follow loan limits set through the FHFA.

These limits change each year to keep up with inflation and the average home price in the United States. For 2021, the maximum you can borrow for a conventional conforming loan is $548,250. This is for a single-family home.

The limit is also different depending on the county you live in. If you live in New York City or Nantucket for example, where real estate is expensive, you can go as high as $822,375 using a conventional mortgage.

Weighing the Pros and Cons

When you’re applying for a loan, you’ll want to weigh the pros and cons of a conventional mortgage and a jumbo loan. One advantage to a jumbo loan is that they tend to cost less. With higher down payments, a higher income, and a lower interest rate, you’ll pay less for your mortgage over time.

Because a jumbo loan isn’t backed by the Federal Government, however, your credit and finances will need to be impeccable. Lenders are assuming all the risk with a jumbo loan. That means you’ll face stiffer loan requirements.

When it comes to a conventional loan, you’ll see lower credit requirements. You can also qualify for an FHA loan with less money down. There are more programs available for first-time homebuyers, USDA loans, VA loans, and HUD loan programs.

Applying for a Loan

Whichever loan you apply for, you’ll need to have a few key documents handy. First, expect to be asked for two years’ worth of tax returns, and W2’s You’ll also need your most recent paystubs. You should also have your estimated down payment.

Before you apply, it’s also helpful to write out your income and expenses. This can help you gauge affordability and see where you can make some cuts. A good rule of thumb is to keep your housing expenses to a third of your income.

Your credit will be pulled, so it’s always a good idea to run it yourself before you apply. You can see where you can improve and if there’s anything you’d like to dispute on your report. You can run your credit for free each year from the Federal Trade Commission.

Take some time while you search for a home to pay down your debt. Lowering your debt will open up more loan options and better terms. Don’t close any credit cards to keep your credit availability high.

Jumbo vs Conventional Mortgage

If you’re considering a jumbo vs conventional mortgage, there are a few major differences to keep in mind. First, look at the price of the home you’re buying and how expensive your housing market is. Next, weigh your down payment, income, and credit.

When you’re ready to get started, we have mortgage professionals waiting to assist. Fill out the application form here to kick-start your mortgage. We’ll help you find the best mortgage for your new home.

How to Qualify for Your First Mortgage

March 8, 2021 by Ascend Mortgage

When you decide to buy your first home, it’s an important step in your life. This decision will affect you and your family for years to come.

Buying a home isn’t like renting an apartment. After 12 months, you don’t have the option of terminating your lease and moving on. When you buy a home, you’re committing for the long haul.

That being said, when you find the right home, it’s one of the most exciting and intimate moments you can share with your household. The only question is, can your qualify for your first mortgage?

The elation of finding the perfect house in the right neighborhood can quickly evaporate if you don’t qualify for the home loan. We don’t want to see you suffer such a devastating disappointment.

Keep reading for our quick guide on how to qualify for a mortgage.

Your Budget

Before you start house hunting, you need to assess your budget. How much can you afford to spend on a home?

This figure isn’t dictated solely by your monthly mortgage payments. There are a lot of other expenses that come along with homeownership. These include:

Property taxes
Homeowners insurance
Utilities and services
Common area maintenance/HOA fees
Home maintenance and repairs (typically $1,100 or more a year)
And more

When calculating your potential home costs, make sure you accountant for these added expenses. You should never sacrifice your financial stability to move into a home that’s too highly-priced.

Debt to Income Ratio

When qualifying for a mortgage, the bank will also want to ensure you can comfortably afford your payments. After all, it’s their money on the line. If you stop making payments, they’re the ones who will suffer.

As such, when you apply for your first mortgage, you need to provide proof of your household income. This can be in the form of bank statements or pay stubs from your employer.

Your total income will be weighed against the total monthly debt payments you’re responsible for. These monthly payments include car loans, school loans, hospital bills, credit cards, personal loans, and more.

Generally, most lenders won’t approve a loan if your debt to income ratio is higher than 43%. In other words, if you make $4,000 and month and owe more than $1,720 for in debt payments, you’re over the line. This calculation includes your potential mortgage payments.

Credit History

Your credit history is equally important when applying for a mortgage. If you’re wondering “Do I qualify for a mortgage?” the first thing you should do is check your credit score.

Your credit score will determine the loans for which you qualify. Different loans accept different scores. For example:

Jumbo loans require a score of 700
VA loans and USDA loans require a score of 640
Conventional home loans require a score of 620
FHA loans require a score of 500

However, the proper credit score alone will not qualify you for your first mortgage. The lender will also look at your history, which includes your debt to income ratio, rent history, payment history, and more.

Down Payment

One of the hardest aspects of qualifying for a mortgage is coming up with the required down payment. As with your credit score, the required down payment varies from loan to loan.

Down payments are based on the total value of the home. For example, if you buy a home for $200,000 with an FHA loan requiring 3.5% down, you’ll need to come up with $7,000 to procure the loan.

VA loans offer the lowest downpayment option. Applicants are able to get a loan with zero money down. However, to qualify, you must be a military veteran.

The next smallest requirement comes from government-backed FHA loans. These loans were established to help people with lower credit scores and incomes find home loans. FHA loans require a minimum of 3.5% down.

Conventional home loans typically call for anywhere between 3% and 20% down. For most loans, if you put less than 20% down, however, you’ll be forced to buy mortgage insurance.

Assets

Learning how to get your first mortgage can take time if you have little or poor credit. However, the lender also takes your assets into account.

If you have valuable possessions, you can use them in the event of a financial emergency. The lender would expect you to use/sell these assets to pay your mortgage payments.

Possible assets include things like savings accounts, stocks, mutual funds, IRA accounts, retirement accounts, other properties, and more. If your loan qualification is contingent on your assets, you’ll need to provide proof of your ownership and the asset’s value.

First-Time Home Buyer Programs

Most states have first-time homebuyer programs that offer assistance to people looking to apply for their first mortgage. These vary from state to state.

However, popular programs include:

Improved rates for specific professionals (doctors, nurses, police, firefighters, educators, etc.)
Down payment assistance
Closing cost reductions
And more

Ultimately, these programs are designed to make it easier for people to get approved for their home loans. Sometimes the home loans are restricted to certain properties, locations, and price ranges.

Qualified Co-Signers

Finally, learning how to qualify for a mortgage might mean getting help. If you don’t qualify for the loan by yourself, you can always ask someone to co-sign on your home with you.

However, you must understand what a monumental favor this is. The person who co-signs will be equally responsible for the mortgage. If you miss payments, the lender will seek compensation from your co-signer.

Co-signing on the loan will also affect their credit score and total debt to income ratio. Being a co-signer on your home might prevent them from procuring their own loan or line of credit in the future.

Ideally, a co-signer would be your spouse/significant other, a parent, or a grandparent.

Looking to Get Your First Mortgage?

Are you ready to apply for your first mortgage? If so, we want to help. Contact us today to apply for a loan.

However, if you’re still uncertain about which direction to head in, we can help point you on the right path. We offer helpful mortgage guidance for new home buyers like you.

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Nicole Standard

14:45 03 Jun 22

Trevor Cox

15:34 16 May 22

If you are looking for a rockstar team to help with your lending needs, then reach to Sean and his team at Ascend Mortgage! Through every step of the process they were always there for us if we had questions and were very knowledgeable about market conditions. Their team was on top of everything in which helped us close fast! I have worked with this team twice in the past 5 years and would recommend anyone to them!

Zachary Wagner

18:17 11 May 22

My wife and I just purchased our first home and worked directly with Sean, Ben, and Maria. We had many questions and each of them on separate occasions reached out quickly and were a major help to us. We highly recommend using Ascend Mortgage as they are very smart and more than capable of going the extra mile for there customers!

Britney Glowe

21:35 03 Apr 22

The team at Ascend Mortgage was so great to work with. They communicated quickly and efficiently, and helped make the entire process smooth and easy to navigate.

Brooke Busse

02:33 04 Mar 22

This company is amazing! They did everything possible to make sure I was in the best position to have an amazing offer on a house. The lender would call the listing agent and send him videos on my behalf. On top of that, they were able to close on my house in 20 days. I would recommend this company to anyone looking to buy a house.

Maya LaFlamme

23:20 01 Feb 22

Our realtor recommended Sean at Ascend Mortgage along with a couple of other local lenders. We ultimately chose Sean because the platform and website was extremely user friendly. Honestly, we couldn’t have picked a better lender as first time home buyers. Sean answered all of our questions before we even asked. He is so knowledgeable, warm and treated this process with so much care. At no point did we feel ignorant, abandoned or judged. Even when we had to talk about our finances (my credit score was very, very low) I didn’t feel shame or embarrassment. Sean came up with a plan that helped my credit and put us in a position for a potentially better interest rate in the future. Ben and Maria put in so much administrative work and answered all of our questions quickly and kindly. I loved how easy the portal was to upload our documents and see when they’re been reviewed and accepted. Every step of the way Ben, Maria and Sean kept us in the loop and was clear about the pace in which we should do things without making us feel rushed and stressed. Every step of the way Ben, Maria and Sean kept us in the loop and was clear about the pace in which we should do things without making us feel rushed and stressed. Maria and Ben especially showed up strong during the underwriting process. We had a grant and they were incredible juggling the needs and priorities of our funder and the lender.All in all, this experience was amazing and easeful. I would use Ascend again, again and again.

Darrell Niedzwiecki

12:18 14 Jan 22

Sean Chamberlain and his team did a great job assisting us with a home loan! Sean in particular did an excellent job explaining and assisting with every step in the process. We found his use of video messages very helpful.

Denise Roe

18:57 24 Dec 21

This is our 7th home purchase and I can say, without a doubt, Ascend mortgage was by far the best mortgage company we have ever worked with. Sean was phenomenal to work with and extremely knowledgeable on financial planning and strategy. Thank you to the Ascend team!

Jeff Roe

21:04 22 Dec 21

Sean and his team did a fantastic job handling our mortgage for our vacation home in Michigan. He was extremely easy to work with and explained everything along the way, making this a very painless process for us. I can't recommend Sean and his team at Ascend Mortgage enough!

Thomas Parkhill

13:34 28 Nov 21

I have had the pleasure of working with Ascend Mortgage and Sean Chamberlain previously. This year I had the privilege of working with Sean's assistant, Maria Janiszewska-Chamberlain and Operations Manager, Ben Daiek, who helped me get everything electrically signed, and ready to go to the Transnation Title Company in Clarkston. Ben was extremely helpful and very patient with an old guy who is not very sharp with new technology on my computer and cell phone. Ben also delivered my documents to my residence.I don't know about other mortgage companies, but I would highly recommend Ascend Mortgage LLC with Sean Chamberlain and his team with Maria and Ben for a wonderful experience my wife, Cindi and myself received.Thomas H. Parkhill

Ciaran McQuiston

23:42 23 Nov 21

We absolutely loved working with the team at Ascend! We wouldn’t have gotten our home in this competitive market without the speed with which they could promise to process our mortgage. They were also incredibly friendly, professional, and easy to work with. We had an amazing experience. 10/10!

Maria Janiszewska

19:56 16 Nov 21

Drake Jarmon

12:35 22 Sep 21

Working with Sean and his team was extremely easy! Very professional and quick to respond. Always available, day or night, to answer any questions that we had. Up to date technology!! Highly recommend for the purchase or refinancing of your home.

Stefan Anderson

16:07 17 Sep 21

Great experience overall. They took a personal approach to educate us on our home buying journey to ensure we knew what to expect to aid us in our decision process.

Tony Yancey

20:22 20 Aug 21

Wes Evans

21:49 06 Aug 21

I met Sean chamberlain and his excellent team during at service call at his office.After talking about the results of his AC diagnosis we began talking about life and finances Sean is very easy to talk too and has great advice for first time and longtime homeowners.When it comes to making financial decisions I HiGHLY recommend Sean and his team at ascend mortgage to anyone looking to refinance there home.Anytime I had a question either him or his team were right there to make sure I had an answer quickly

Ashlynn Graff

18:12 02 Aug 21

We have used Sean and his team at Ascend Mortgage for a new purchase and two refinances. I am a former real estate agent and have worked with many different mortgage companies. Ascend Mortgage is by far the best! The rate is always the lowest I can find. They are extremely responsive and transparent. I get weekly updates from them that shows me my current house value and neighborhood trends. They contact me when I can save money on my mortgage and get a better rate without pestering me. They are just all around great people. Thank you Sean, Ben and Maria!

Dan Lupo

17:48 26 Jul 21

I primarily worked with Ben Daiek and Sean Chamberlain at Ascend Mortgage and they made this process quick, easy and understandable. It was painless and way less intimidating than I thought it would be. They got me a great rate and there’s nothing more that I could ask for or that I would change about my experience.

CoMi ProVa

03:43 20 Jun 21

Ascend mortgage has been amazing, thanks to them we were able to get an amazing rate, the communication was consistent and extremely pleasant and we were able to buy our dream house in a crazy market. Thank you Ascend team, you are awesome!

Greg Tony

20:46 24 May 21

Demetrios Kanellopoulos

14:26 28 Apr 21

We had a great experience working with both Sean and Ben! The team is very responsive and they were able to answer all of our questions.

Caitlin Wysocki

14:08 28 Apr 21

Ascend Mortgage made the process of buying my first home so easy! Sean, Maria, and Ben were extremely helpful and I’m so glad we chose their team. Sean sends personalized videos in all his emails which makes it so easy to communicate. They were all very invested in our home-buying process and it truly felt that they cared about us. They were always available any time I had questions and I would recommend them to anyone I know buying a house.

Kelli Joubran

23:32 18 Mar 21

Sean, Ben, and Maria made the financing process of buying my new home so easy! Their professionalism, knowledge, responsiveness...5 stars! I'd recommend Ascend mortgage without hesitation.

Denise Mckibben

20:10 18 Mar 21

Sean and his team are fast responding and very professional!! This is the 3rd time we have used Sean Chamberlain. And we will continue to!

Aleaha Begum

01:51 18 Mar 21

Deciding to work with Ascend Mortgage was the best choice we could have made as a first time home buyer. Right from the start, Sean was fully committed to providing everything we needed to be a well informed client. Sean spent hours meeting with us through Zoom answering all the questions we had. He explained everything in easy to understand terms and was very patient, making sure that we were satisfied with the details of everything involved all along the way. Sean helped guide us in many crucial decisions, laying out the pros and cons of each. Ascend mortgage went above and beyond to get our offer accepted on our home by calling listing agent or sending recorded videos about how strong our loan was and close in record time. Sean and his team went above and beyond in more ways then I have space to write about. We look forward to continuing working with Ascend Mortgage in the future. Thank you Sean, Ben and Maria for your wonderful service. We appreciate you all so much.

Kyle Chavez

14:43 08 Mar 21

Sean and the team were very responsive throughout the whole house-buying process. They got me a great rate and were able to close on my house extremely quickly. 5/5 would mortgage again.

Jihad Allan

22:13 28 Feb 21

I got to know Sean in 2013 when I purchased my house. After checking with other companies I always went back to Sean knowing he will give me an honest answer. Sean and his team are wonderful people. Excellent customer service. Sean is a friend. I feel very comfortable working with him and his team. I definitely recommend Ascend Mortgage. Check them out and you will be happy.

Sung Ahn

18:05 26 Feb 21

Ascend Mortgage has great people to work with. My experience with them was really good. I was able to close my home on the date I've originally planned.

Amanda Box

19:53 19 Feb 21

Great to work with! They made the process very easy and answered all my questions. This is the second time that I've had the pleasure to refinance with Sean, and it has been a great experience both times.

Sara Reifman

20:25 18 Feb 21

Sean is quick to respond to all my questions, and he is very knowledgeable and experienced. I have felt like I was in great hands throughout the whole process, and even though I closed on my house almost a year ago, Sean still makes himself available to help me.