Jumbo Loan

Are you in the market for a new home? If you’re a buyer with a larger budget, a jumbo loan can help you buy a more expensive home that might otherwise be difficult to finance with standard conventional loans. 

Jumbo loans are mortgages that exceed the conforming loan limit set by Fannie Mae and Freddie Mac. This means that you can borrow more money to purchase the home you love. Lenders who offer jumbo loans have experience navigating complex scenarios and provide you with unique financing expertise and customer service.

What is a Jumbo Loan?

You have a handful of options when choosing the right loan to buy a home. Loan types often differ based on their qualification requirements and the terms they offer, such as the loan’s length, interest rate, and minimum down payment amount.

A jumbo loan is a mortgage loan that allows for a much higher loan amount than any traditional loan. Because of the higher limits, jumbo loans may require a higher down payment amount and credit score to secure the loan. When a loan amount reaches beyond the limit set by the Federal Housing Finance Agency (FHFA), jumbo loans can offer high-end financing that a traditional loan cannot. 

In 2022, a jumbo loan is a mortgage bigger than $647,200 in most areas (though conforming loan limits are higher in more expensive counties). Jumbo loans are available in both fixed and adjustable rate mortgage (ARM) options.

How to Get a Jumbo Loan

To learn whether a jumbo loan is the best option for purchasing your home, connect with us. To get you started, we’ve outlined the steps and documentation needed to help you understand the process.

The Financing Process

Homebuyers often start by requesting a quote for their interest rate or beginning an application with a lender for pre-approval. By sharing basic information about your potential purchase, we’ll work with you to pull your credit report and discuss your finances and the potential value of the house you’re interested in purchasing.

As we move through the process together, we’ll arrange for an appraisal of the house to determine its value. The loan may require two appraisals if its value is above a certain amount. 

We’ll also discuss the terms you qualify for and your options, as well as request various documentation for the underwriting process to make sure the loan begins on a solid foundation.

We’re with you through each step leading to closing, where we’ll finalize your jumbo loan when you’re ready to purchase.

Jumbo Loan Requirements to Meet

These are some of the common requirements often needed to qualify for a jumbo loan. If you have questions about these requirements, we’re here to help.

• Credit score requirements vary. In most cases, a credit score of 700 or higher qualifies. This may shift lower or higher based on other factors such as Debt-to-Income ratio and down payment amount.
• Through underwriting evaluation, you’ll need documentation of consistent income with a Debt-to-Income ratio at or below 43%. This ratio shows how much of your monthly income goes to paying your debt.
• Along with income information, you need to share employment verification and history.
• For jumbo loans offered by the VA, you must be active duty, a veteran, or a spouse.
• Your down payment needs to be at least 10% of the purchase price, with some scenarios requiring down payments of up to 20%.

Jumbo Loan FAQs

Financing a home is an important investment. It’s ok to have questions. We’ve compiled answers to the frequently asked ones, but don’t hesitate to ask more.