A Jumbo Second Mortgage provides eligible homeowners with access to up to $500,000 in home equity without refinancing or replacing their existing first mortgage. This can be useful for borrowers who want to preserve a favorable first-mortgage interest rate while accessing additional funds.
Loan amounts range from $150,000 to $750,000, with loan-to-value ratios determined by credit profile and underwriting qualifications. The program is available for owner-occupied properties and offers both traditional full-documentation and alternative-documentation qualification options.
This is a Non-QM second mortgage program with certain Non-Prime underwriting characteristics, including flexibility for borrowers with prior mortgage late payments, bankruptcy, foreclosure, or short-sale history.
Alternative Documentation Jumbo Second Mortgage
Alternative income documentation is available for self-employed borrowers, business owners, independent contractors, and borrowers whose income may not be represented accurately by traditional tax-return documentation.
Form 4506-C are not required for the alternative-documentation options.
Available alternative income documentation may include:
- Borrower-prepared, unaudited Profit and Loss statement
- Two months of business bank statements with a borrower-prepared P&L
- 24 months of personal bank statements
- 24 months of business bank statements
Traditional full-documentation qualification is also available.
Jumbo Second Mortgage Credit Score and LTV Guidelines
700+ Credit Score
- Up to 90% loan-to-value
- Mortgage history: No mortgage late payments during the previous 12 months
- Bankruptcy: 3 years seasoning
- Foreclosure: 3 years seasoning
- Short sale: 2 years seasoning
680+ Credit Score
- Up to 85% loan-to-value
- Mortgage history: One 30-day late permitted during the previous 12 months
- Bankruptcy: 4 years seasoning
- Foreclosure: 2 years seasoning
- Short sale: 2 years seasoning
660+ Credit Score
- Up to 80% loan-to-value
- Mortgage history: One 30-day late permitted during the previous 12 months
- Bankruptcy: 2 years seasoning
- Foreclosure: 2 years seasoning
- Short sale: 1 year seasoning
640+ Credit Score
- Up to 75% loan-to-value
- Mortgage history: One 90-day late permitted during the previous 12 months
- Bankruptcy: 1 year seasoning
- Foreclosure: 1 year seasoning
- Short sale: No seasoning required
620+ Credit Score
- Up to 70% loan-to-value
- Mortgage history: Up to two 90-day late payments during the previous 12 months
- Bankruptcy: 2 years seasoning
- Foreclosure: 2 years seasoning
- Short sale: No seasoning required
Minimum credit score: 560, subject to additional underwriting restrictions and lower allowable leverage.
Jumbo Second Mortgage Loan Amounts
- Minimum loan amount: $150,000
- Maximum loan amount: $500,000
- Maximum DTI: 50%
- Owner-occupied properties only
This second mortgage allows borrowers to access equity while leaving the existing first mortgage in place.
Available Jumbo Second Mortgage Terms
Available repayment options include:
- 5/1 ARM
- 7/1 ARM
- 10/1 ARM
- 15-year fixed
- 20-year fixed
- 30-year fixed
- 40-year fixed
- 30-year fixed with interest-only payments
- 40-year fixed with interest-only payments
Eligible Property Types
- Eligible properties include:
- Single-family residences
- Warrantable condominiums
- Townhomes
Full Documentation Qualification
Borrowers may also qualify using conventional income documentation.
Wage Earners
Documentation may include:
- W-2 forms
- Pay stubs
- Personal tax returns
Self-Employed Borrowers
- Traditional documentation may include:
- CPA documentation
- Federal tax returns
- Other standard self-employment income documentation
Borrowers who do not qualify effectively using traditional documentation may instead be eligible for the program’s bank-statement or P&L-based alternative documentation options.
Jumbo Second Mortgage for Self-Employed Borrowers
Self-employed borrowers may qualify without relying exclusively on personal or business tax returns.
The lender offers alternative-documentation methods that can evaluate income using business cash flow, bank statements, and a borrower-prepared Profit and Loss statement.
These options can be particularly useful for borrowers whose taxable income does not accurately represent the cash flow available to make mortgage payments.
Preserve an Existing First Mortgage
A second mortgage can provide access to home equity without refinancing an existing first mortgage.
This may be beneficial when the borrower currently has a favorable first-mortgage interest rate and does not want to replace that loan with a new first mortgage at current market rates.
Potential uses of second-mortgage proceeds may include:
- Debt consolidation
- Home improvements
- Business capital
- Major personal expenses
- Other permitted cash-out purposes
Available States
The Jumbo Second Mortgage program is available in:
Alabama, Arizona, California, Colorado, Delaware, Florida, Georgia, Hawaii, Idaho, Nevada, North Carolina, Oregon, Tennessee, Texas, Utah, Virginia, and Washington.
Jumbo Second Mortgage Program Summary
- Loan amounts from $150,000 to $500,000
- Credit scores down to 560
- Up to 90% LTV for qualifying borrowers
- Maximum 50% DTI
- Owner-occupied properties
- Fixed-rate and ARM options
- Interest-only options available
- Full-documentation qualification available
- Bank statement qualification available
- Borrower-prepared P&L option available
- IRS Form 4506-T not required for Alt-Doc qualification
- IRS Form 4506-C not required for Alt-Doc qualification
- Prior bankruptcy, foreclosure, short sale, and mortgage late payments may be permitted subject to seasoning requirements
Reference #545221
Last Updated on 2 months ago by Broker Mortgages