Securing a $3.65M jumbo loan amidst complex financial portfolio
By Cristian Dominguez
June 9, 2023 • 3 min read
For our client, purchasing a $3.65M luxury home in Miami Beach, Florida, wasn't a matter of having sufficient funds. The real challenge lay within the complexities of his diverse income portfolio. Despite owning several properties and businesses, traditional lenders struggled to ascertain his qualifying Debt-to-Income (DTI) ratio. Given that his purchase would require a jumbo loan, which is considered risky to most lenders, a healthy DTI was essential for this purchase.
Actual home not pictured.
These non-conforming jumbo loans are riskier for lenders as they lack the guarantee of Fannie Mae and Freddie Mac, which means the lender bears all the risk in case of a default. In 2023, the limit for conforming loans in most counties is $726,200, as determined by the Federal Housing Finance Agency (Nerdwallet). Hence, homes exceeding this limit require a jumbo loan. However, the primary hurdle was not the nature of the loan, but qualifying the client's DTI against his varied income sources.
According to Freddie Mac's guidelines, a borrower's monthly debt payment-to-income ratio should ideally not exceed 33% to 36%. If it surpasses 36%, a justification for the higher qualifying ratio must be documented. Calculating this for our client, given his diversified income sources, was a tough task for other lenders he approached that subsequently denied him because of the perceived risk.
At Milo, we thrive in such intricate scenarios. Our resolution was to meticulously dissect his income from each of his businesses and properties. This allowed us to accurately calculate his DTI, ensuring it fell within the qualifying threshold.
With our detailed analysis, we managed to secure an 80% loan-to-value (LTV) jumbo DTI loan for our client's luxury home purchase. This success story emphasizes that possessing the required assets is just one of several elements of securing the right loan and that Milo’s experience and expertise allows clients to effectively navigate the complex lending landscape with a diverse range of income and assets.
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At Milo, we're here to assist you through all these intricacies. Whether you're dealing with a jumbo loan or complex income scenarios, our experts can guide you home. Reach out today, and let us turn your dream home into reality.
The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.
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