Many would-be home buyers are discouraged by the strict qualification criteria and large down payments required for many loans. While the big banks and credit unions are great to work with for standard Jumbo loans, which provide more affordable financing, a large number of people are still being denied. This is because most jumbo lenders still want a 20% down payment with perfect credit. If you land slightly outside their underwriting parameters, you’ll most likely be turned down.
To allow more borrowers to qualify for jumbo loans, Griffin Funding has expanded the underwriting box while still maintaining very competitive rates. We’ve designed these loans with “common sense” underwriting in mind so we can offer our near-miss jumbo loans with as little as 3.5% down.
We will allow…
- 620 credit score for loan amounts up to $2.5 million (30% down required)
- 660 credit score for loan amounts up to $2.5 million (20% down required)
- 700+ credit score for loan amounts up to $1.5 million (3.5% down required)
- 700+ credit score or loan amounts up to $1.75 million (5% down required)
- 720+ credit score for loan amounts up to $3 million (as little as 10% down required) -> Apply Now
- Up to 55% debt-to-income ratio
- As little as 10% down on a second home
What Is a Near Miss Jumbo Loan?
A near miss jumbo loan aka a big bank turndown is a subtype of jumbo loan which is designed for individuals who need a large sum to purchase a home because they do not have the cash available to do so. A near-miss jumbo mortgage is considered a non-qualified mortgage (Non-QM) loan. This type of alternative loan also includes asset-based mortgages which are recommended for high-asset borrowers and bank statement loans for self-employed borrowers. Non-QM loans are not required to comply with the Consumer Financial Protection Bureau’s standards for qualified mortgages.
To accommodate the needs of a growing population of potential borrowers who do not meet the stricter requirements of Freddie Mac or Fannie Mae loans, near miss jumbo mortgages were created with less restrictive parameters. While you still need a respectable credit score and substantial income, near miss jumbo loans are more forgiving if you have fluctuating cash flow or “good credit debt” like large student loans.
Near miss jumbo mortgages are available on owner-occupied primary residences and second homes. We are one of the only lenders in the country that only requires 10% down on a second home / vacation home.
When Is a Near Miss Jumbo Loan Recommended?
Typically, near miss jumbo loans are recommended for those who fall just short of approval for traditional mortgage loans and standard jumbo loans—like individuals who have previously been turned down for a mortgage loan due to a high debt ratio, a recent credit event, low income reported on their tax return, or who have been self-employed for less than two years. Those with high student loan debt are also struggling to buy homes and invest in real estate because of strict credit requirements and may be well suited to this type of loan.
Near miss jumbo mortgages are popular amongst young aspiring first-time buyers, long-term homeowners trying to refinance, or those who want to purchase a second home. If any of these circumstances apply to you, you should consider a near miss jumbo loan to secure the funds you need.
Do Jumbo Loans Require 20% Down?
While standard jumbo loans typically require at least 20% down to lower the risk of the lender, near miss jumbo loans through Griffin Funding do not.
Can You Get a Jumbo Loan with 3.5% Down?
Yes, qualifying applicants can secure a jumbo loan with 3.5% down. This lower down payment has opened the opportunity of homeownership to a larger demographic. The required down payment will depend on several factors including the amount you wish to borrow.
What Qualifies You for a Near Miss Jumbo Loan?
Near miss jumbo loans have expanded the luxury of homeownership to more borrowers. Instead of being quickly dismissed based on black-and-white qualifications, borrowers are viewed on a broader level. Near miss jumbo loans allow lenders to consider a more comprehensive borrower profile, including a slightly lower FICO score, to determine your ability to repay the loan. As such, we offer more flexible terms for qualifying for near miss jumbo loan:
- Instead of 20% down, we will allow as little as 3.5% down up to $1.5 million, 5% down up to $1.75 million and 10% down up to $3 million (loan amounts available up to $5 million with more down-payment)
- Instead of the normal 43% debt-to-income ratio limit, we will allow you to go up to 55%
- Instead of a 720+ credit score, we will allow a 620 credit score (No credit events in the last 4 years and credit scores less than 720 require larger down payments)
- No mortgage insurance
On some jumbo programs instead of showing tax returns that might not accurately reflect your income to qualify, we can use bank statements to verify income if you are a self-employed real estate buyer.
Maximum Near Miss Jumbo Loan Amount
Griffin Funding strives to provide customer-centric lending options, including sufficient loan amounts for our near miss jumbo mortgages. Borrowers can get a near miss jumbo loan for up to $1.5 millions with 3.5% down payment and $3 million with a 10% down payment or up to $5 million with a larger down payment.
- Get a loan for up to $1.5 million with a 3.5% down payment!!!
- Get a loan for up to $3 million with a 10% down payment!!!
Flexible Loan Terms
Instead of just offering a 30-year or 15-year fixed-rate we also offer a 40-year fixed rate, 7-year, and 5-year adjustable-rate mortgages (ARMS) with an interest-only option for the first 10 years. The lower interest rate in the early years of your mortgage benefits you in the long run because you’ll accumulate less interest on your loan, especially if you can pay off a significant portion within the first few years. If you’re making interest-only payments at first, you may end up paying higher mortgage payments after the established term but this may be beneficial if you are focusing on paying off student loans, investing in multiple properties, or have restricted cash flow for other reasons.
Imagine being able to buy your dream home for a purchase price of $3.5 million by putting 15% down! You would have a loan amount below $3 million that you could finance with a 30-year fixed rate mortgage that has an interest only payment for the first 10 years! (Interest Only requires 15% down up to $3 million or 10% down up to $2.5 million.)
Imagine being able to buy your dream home for $3.3 million by only putting 10% down! You would have a loan amount below $3 million that you could finance with a 30-year fixed rate mortgage or 7-year arm.
Imagine having a 700 plus credit score and being able to buy your dream home for $1.5 million only putting as little as 3.5% down ($52,500)!
Apply for a Near Miss Jumbo Loan
If you’ve run into obstacles trying to qualify for a mortgage, it can feel like you’re out of options. Our knowledgeable team can help you move in the right direction by determining whether a near miss jumbo loan or another Non-QM loan is the best solution for you.
The home-buying process may seem complicated and drawn out, but our experts prioritize efficiency and strive to close purchase loans within 30 days or less. With diverse and flexible mortgage options, like our 3.5 down jumbo loan, securing a loan with Griffin Funding makes applying for a loan and purchasing your first or second home significantly easier.