Is there anything unusual I need to know about qualifying for a home loan in Lake Valley?
If you’re thinking about buying a home in Lake Valley it makes sense to check if Lake Valley has any special mortgage rules?
The short answer is “not really.”
The longer and more complicated answer is that lenders have a number of additional lending requirements for jumbo loans and you will need to provide additional HOA and HOA financial statements from the Lake Valley HOA.
A jumbo loan is any mortgage that exceeds the Federal Housing Agency conforming loan limit. The 2020 limit is typically $510,400 in Colorado, although it varies from county to county.
In Boulder County the limit is $644,000.
With the average home value around in Lake Valley Estates at $850,000 and $1,000,000 in North Rim, new buyers may be looking at jumbo loans.
Lending requirements for jumbo loans are similar but slightly stricter to most loan programs and will vary depending on the lender.
- Credit Score – Lenders tend to have more relaxed minimum credit score requirement if the loan-to-value (LTV) is lower than 70%. Above a 70% LTV a minimum FICO credit score of 620 is usually required, with many programs starting at 680.
- Appraisal – Some jumbo loan programs require a 2nd appraisal to verify home value.
- Down Payment – Assuming your home will be your primary residence, your down payment will primarily be influenced by your credit score. Typically you will need to put down 20%, lowering to 10% with a 680 credit score. The higher your credit score, especially above 720, the lower your down payment.
- Income Requirements – Most jumbo loans require income verification through documented 2 years of tax returns, or 12-24 months worth of bank statements. It gets more complicated if you’re self employed or own your own business.
- DTI Ratio – The maximum debt-to-income (DTI) ratio allowed by most jumbo mortgage lenders is 45%, although 36% is most common. You cash reserves and assets become important above 36%.
- Assets / Cash Reserves – It helps to have cash reserves to cover 12-months of mortgage payments.
Home Owner Association Financials
Lenders will require insight into the financial strength of new amalgamated Lake Valley HOA. Their primary concern is to make sure that there are no unexpected special levies and the HOA has enough operating capital to meet the communities regular expenses.