Jumbo Loans Florida

Every year, the Federal Housing Finance Agency (FHFA), which is the agency that oversees the government-sponsored entities (GSEs) Fannie Mae and Freddie Mac, sets a conforming limit in each US county. Conforming loans are below this limit and can be backed by the two GSEs, meaning that they can be sold to a mortgage broker on the secondary mortgage market. Anything above the jumbo mortgage limits will have stricter requirements to protect the lender from default.

The current Florida jumbo loan limit for nearly every county, including Miami-Dade County, is $766,550. There’s only one higher loan limit in Florida — that’s Monroe County, which compasses the Florida Keys and has a loan limit of $929,200. For most areas, jumbo loan limits well surpass median home prices. For example, in Miami-Dade, the median home sales price is $660,000. If you need a jumbo loan, you will also need to prove that you can handle it.

With a jumbo mortgage loan, you’ll have a lot of expenses, including a larger down payment, though you won’t need to pay for monthly mortgage insurance. Down payments for jumbo loans are typically up to 20%. Jumbo loan applicants need to prove that they have the funds on hand through bank statements. Some lenders will also need to see that you have money in reserve so that you can afford your jumbo mortgage even during a downturn — the minimum is usually six months, but it can be even higher depending on the lender.

For conventional mortgages below the conforming loan limits, you typically need a bare minimum 620 credit score. However, this jumps to 700 or more for jumbo loan options, significantly more than the average Floridian score of 680. You should have an immaculate payment history, no delinquencies or collections, a variety of different lines of credit, and low credit usage. If you don’t meet these qualifications, we’ll discuss your conventional loan options instead.

Debt-to-income ratio refers to how much of your income is being used to cover other debts, such as credit cards or mortgages on other investment properties. You want to have a high income and a DTI of 36% or less. In comparison, conforming loans allow a 40% to 50% DTI.

Self-employed and first-time homebuyers are frequently denied on jumbo loan applications because they don’t have the cash flow that lenders want to see. Also, you will need to make sure you can afford homeowners’ insurance, which averages at $6,600 in Florida — the highest premium in the US, as well as the property tax of 0.80% on average.

While the home-buying process almost always requires a property appraisal, those seeking jumbo mortgages may need multiple appraisals before the lender will approve the loan amount. This is because lenders want to see that your specific property falls in line with housing prices in the area. If you choose cash-out options down the line, you’ll need another appraisal before your refinance will be approved.