JPMorgan Chase Eases Jumbo Loan Requirements
Financial firm JPMorgan Chase has moved to ease borrower requirements for its jumbo mortgage loan products to compete with marketplace peers, reports HousingWire. The firm’s U.S. commercial and consumer banking arm, Chase Bank, announced it would lower down payment and credit score requirements for jumbo loans as part of a firm-wide simplification process.
As low as 15 percent down, 680 credit score
The move will affect borrower requirements for loans that exceed $417,000 in most parts of the country, with higher thresholds in high-priced markets. Until now, single-family home buyers needed a FICO credit score of 740 or higher and a down payment of 20 percent or more. Under the new rules, those buyers can be approved with a credit score of 680 or above and a down payment of as little as 15 percent.
Wells Fargo eased requirements last year
The change may be an effort to compete with other jumbo loan lenders, particularly Wells Fargo. That lender had eased its requirements for credit scores last year, from 720 to 700.
Following the Chase announcement, Wells Fargo reported it too would accept scores of 680 in some circumstances. “Wells Fargo will make jumbo loans to borrowers with credit scores as low as 680 if they have at least a 20% down payment, and will make loans with LTVs as high as 89.99% but have higher credit score requirements,” read a statement from the lender.
Demand for jumbo loans up
According to the Mortgage Bankers Association (MBA), demand for jumbo loans has been growing. In April, the MBA reported jumbo loan applications were up in 2014, with the majority of applications in the $417,000 to $625,000 range as well as the $729,000 range and above.