Tag: credit score

Choosing Between a Jumbo Loan and a Conventional Loan

Written by Altitude Home Loans on August 28, 2025. Posted in General, Mortgage.

Prospective homeowners come to mortgage lenders with all types of questions. Some of the most common queries surround the types of loans they may qualify for. This guide explores the key components of two popular mortgage options.

Discover the differences between a jumbo vs. a conventional loan, and how to determine which one is best for you. For personalized lending solutions, reach out to the team at Altitude Home Loans.

How a Jumbo Home Loan Differs From a Conventional One

Lenders typically issue mortgages that fall within the loan limits set by the Federal Housing Finance Agency. These conventional, conforming loans are seen as less risky for lenders, but borrowers may be eligible for a non-conforming or jumbo loan, which exceeds the FHFA’s limit.

The biggest differences in these two types of mortgages include:

Interest rates: Given the higher risk of a jumbo loan, it tends to come with higher interest rates.
Down payment requirements: Homeowners are expected to put down much more up front to acquire a jumbo loan. The requirements can range from 3% down for a conforming loan to 30% down on a non-conforming loan.
Insurance: Conventional mortgages are backed by insurers, while their non-conforming counterparts have no guaranteed insurance.

How To Tell Which Loan You Qualify For

Are you debating taking out a jumbo vs. a conventional loan? Find out which one you may qualify for based on the criteria below.

Check Your Credit Score

Lenders run a credit check before approving someone for a mortgage. If you have poor credit, a jumbo loan may not be an option. To qualify for a non-conforming mortgage, borrowers need a minimum credit score of 700, while conventional mortgages accept a score of 620.

Evaluate Your Debt-to-Income Ratio

Keeping your debt under control is key when applying for a mortgage. Lenders try to steer clear of those with a large debt-to-income ratio, especially if they’re looking to obtain a jumbo loan.

This type of home loan is suitable for those with a debt-to-income ratio between 36% and 43%. Conventional mortgages have a bit more wiggle room, as they’re less risky for lenders.

Review Your Cash Reserves

Buying a home is one of the biggest investments you can make. Not only will you need enough money for a down payment, but you’ll also have to put away cash to cover common household expenses.

Be mindful of your cash reserves if you want to take out a non-conforming loan. Your savings should cover the first year of homeownership expenses. It might be easier to get a conventional mortgage, which cuts this requirement in half.

Discuss Your Options With a Lending Specialist

Now that you know the pros and cons of a jumbo vs. a conventional loan, you can take the guesswork out of qualifying for a mortgage. Altitude Home Loans is here to help you navigate the application process so you can become a proud homeowner. Reach out to us today at 520-500-1010 to explore your lending options.

When Should You Refinance Your House Mortgage?

Written by Altitude Home Loans on September 30, 2024. Posted in General.

Is the time ripe to refinance a house mortgage? It could become your ticket to financial ease!

As the go-to mortgage lenders in Tucson, AZ, we at Altitude Home Loans know a thing or two about the subject. Keep reading as we dive into the nitty-gritty details.

Do It for the Right Reasons

Too many people reassess their mortgages without fully understanding their goals. Some of the best motivations to take the plunge include the following.

Lowering Interest Rates

Does the current market favor borrowers? If you locked in a mortgage at a higher interest rate several years ago, you might want to consider a rate-and-term refinance. You should ideally obtain a rate at least one-half of a percentage point lower than your existing plan.

Check your credit score and report before applying! You’re in a good spot when both have improved since your last mortgage. The best refinance rates go to people with the 740 score and above club.

Removing Private Mortgage Insurance (PMI)

PMI is extra insurance when your down payment dips under 20%. It protects lenders, not you, and adds to your monthly bill.

Refinance your house mortgage to eliminate this costly extra with enough home equity. The savings will roll back into your pocket instead of the lender’s.

Financing Big Purchases

Do you need to cover upcoming expenses? We’re talking about wiping out those credit card bills or avoiding student loans’ hefty interest!

Conduct a cash-out refinance and liquidate your home’s equity. People also use the funds to purchase property or renovate their homes.

Changing the Loan Structure or Term

You might want to speed up your mortgage payoff. Shortening a loan term can save you loads on interest over time. You can also switch from an adjustable rate to a fixed rate for more predictability in your budget.

Both strategies bring peace of mind and financial stability. Talk to your lender, assess the current rates, and see which option best fits your goals.

Know When To Reconsider This Route

Should you refinance? It’s not always the best move for everyone. You generally want to avoid:

Discretionary purchases: Some fall into the trap of risking their home to finance luxury items like high-end vacations, extravagant cars, or other non-essential expenses.
Changing loans halfway through the term: You probably won’t save on refinancing when you’re too far along in your mortgage. It means reaching a point where the bulk of the payment goes to the principal balance rather than interest.
Selling too soon: If you need to put your property on the market in the next few months, you probably won’t have enough time to recover the refinancing costs.

Is Refinancing Worth It?

Take the time to analyze the situation by calculating the potential return, as well as accounting for closing costs and loan-to-value ratio. Altitude Home Loans always has you covered if you need assistance.

Dial 520-500-1010 to refinance your house mortgage — just have the required documents and we handle the rest! Give us a call today.

Can You Skip a Mortgage Payment?

Written by Altitude Home Loans on May 30, 2024. Posted in Mortgage.

When struggling to pay your bills and make ends meet, finding ways to cut expenses may require sacrifice and creativity. In dire circumstances, you might wonder, “Can you skip a mortgage payment?”

While it’s certainly possible to miss a mortgage payment and keep your home, not making the monthly payment can have significant consequences for your financial future. Here, the experts at Altitude Home Loans, the top mortgage lenders in Tucson, AZ, explain what can happen. You can get more insights by calling 520-500-1010.

What Happens When You Don’t Make a Mortgage Payment

First things first: Missing a single mortgage payment will not trigger foreclosure proceedings. Most lenders will not even consider foreclosure until borrowers miss two payments or are 90 days or more in arrears.

However, that doesn’t mean you can decide not to pay your home loan and expect everything to be fine. Missing just one payment can:

Affect your credit score. Most lenders report payments more than 30 days late, causing a drop in your score of up to 100 points or more.
Trigger late fees. Most lenders will charge a late fee for any payment received past the due date.
Make next month more expensive. Even when you don’t pay on time, you still have an obligation to make the payment. The mortgage company will expect you to pay the past due amount and your current payment the following month.

I Can’t Make My Payment This Month — Now What?

As soon as you realize you cannot make your monthly mortgage payment, get in touch with the lender to discuss the situation. You may be able to work out a payment agreement or other solution to prevent excess fees, damage to your credit, or foreclosure. If the issue is temporary and due to something like an emergency that drained your available funds, and you have a good track record of making payments, you should be able to arrange a workable solution.

If you find yourself asking, “Can you skip a mortgage payment?” more frequently and struggle to pay every month, you may need a more permanent solution.

Mortgage relief options to consider include the following:

Mortgage modification, which changes the loan terms to extend the life of the loan, switch from an adjustable to a fixed rate, or lower the interest rate.
Mortgage refinancing, in which you get a new mortgage at a lower interest rate to pay off the existing loan, reducing your mortgage payments every month.
Forbearance, which allows qualified buyers to reduce or suspend their payments temporarily.

If none of these options work, and your financial situation doesn’t allow you to make payments comfortably, it may be best to sell your home and find something more affordable.

Get Help From Altitude Home Loans

Choosing a local mortgage lender like Altitude Home Loans in Tucson, AZ, means you have someone close to home you can talk to when you’re having trouble with your mortgage. If you need to know “Can you skip a mortgage payment?” or are having trouble paying your loan, call 520-500-1010 for help.