Jumbo Loans
What are Jumbo Loans?
Jumbo loans are mortgage loans that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). These loans are designed for financing higher-priced properties that require more substantial loan amounts than traditional loans allow. Because jumbo loans do not have the backing of Fannie Mae or Freddie Mac, they come with stricter credit requirements, higher down payments, and more rigorous income verification. However, they offer a solution for buyers looking to purchase luxury homes or properties in high-cost areas.
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Are Jumbo Loans Right for You?
Jumbo loans are ideal for homebuyers looking to finance properties that exceed the conforming loan limits, typically above $726,200 in most areas (limits may be higher in certain high-cost regions). These loans are suited for borrowers with strong financial profiles, including high credit scores, significant down payments, and stable, high incomes. If you’re purchasing a luxury home or a high-value property, a jumbo loan may be the right fit for you.
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Eligibility Requirements
To qualify for a conventional loan, you must typically meet the following requirements:
Minimum Credit Score
A credit score of 700 or higher is generally required, though some lenders may have more lenient standards.
Down Payment
A down payment of at least 10% is typically required, though many lenders prefer 20% or more to qualify for better terms.
Debt-to-Income Ratio
A maximum debt-to-income (DTI) ratio of 43% or lower is generally preferred to demonstrate your ability to handle large loan payments.
Income Verification
Lenders will require proof of high, steady income to ensure you can afford the larger monthly payments of a jumbo loan.
Cash Reserves
Most lenders will require you to have significant cash reserves (often 6-12 months’ worth of payments) on hand to qualify for a jumbo loan.
Jumbo Loans
Numbers at a Glance
Here’s a quick overview of key numbers associated with this type of loans
Minimum Credit Score
700
Varies by lender
Down Payment
10% to 20%
Varies by loan type
Maximum DTI Ratio
43%
Varies by lender
Loan Term
15 or 30
Years to payoff the loan
Upfront Mortgage Insurance Premium (UFMIP)
None
Depending on lender requirements
Annual Mortgage Insurance Premium (MIP)
None
But a higher down payment is required
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We offer a variety of loan programs designed to meet the needs of every homebuyer.
Jumbo Home Loan is perfect for you?
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Benefits of Jumbo Loans
1.
Higher Loan Amounts
Jumbo loans allow you to finance homes that exceed conventional loan limits, making them perfect for luxury properties or homes in expensive areas.
2.
No Private Mortgage Insurance (PMI)
Despite requiring a lower down payment, most jumbo loans do not require private mortgage insurance, helping you save on monthly payments.
3.
Flexible Loan Terms
Jumbo loans offer flexible loan terms, including 15- or 30-year options, allowing you to choose the repayment plan that works best for you.
4.
Competitive Interest Rates
Jumbo loans often come with competitive interest rates that are closely aligned with conventional loan rates, providing good value for high-balance loans.
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Check out other loan options
Ideal for borrowers with good credit, conventional loans offer competitive interest rates and flexible terms.
Conventional Loans
Available to veterans and active-duty service members, VA loans provide excellent terms with no down payment required.
VA Loans
Backed by the Federal Housing Administration, FHA loans are perfect for first-time homebuyers or those with less-than-perfect credit.
FHA Loans
Combines purchase and renovation costs into one loan, perfect for buyers looking to fix up a property.
Rehab Loans
ARMs start with a lower fixed interest rate for an initial period, then adjust periodically based on market conditions.
ARMs Loans
These government-backed loans are tailored for rural and suburban homebuyers, often with zero down payment.
USDA Loans
Pay only the interest on your mortgage for a set period, ideal for buyers who expect an increase in income or future refinancing.
Interest-Only Loans
Enjoy the security of a consistent interest rate and stable monthly payments for the life of your loan.
Fixed-Rate Loans
Allows homeowners 62+ to access home equity without monthly payments, repaid when the home is sold or vacated.
Reverse Mortgage
Flexible loans for borrowers who don’t meet standard lending criteria are ideal for those with irregular income.
Non-QM Loans
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Jumbo Loans FAQ’s
What is the loan limit for a jumbo loan?
Jumbo loans are for loan amounts that exceed the conforming loan limit, which is $726,200 in most areas. This limit can be higher in high-cost regions.
Do jumbo loans have higher interest rates?
Jumbo loans often have interest rates that are competitive with conventional loans, though they may be slightly higher depending on market conditions and your credit profile.
Is PMI required for a jumbo loan?
No, most jumbo loans do not require private mortgage insurance (PMI), even with lower down payments, but they may require higher down payments to offset the risk.
Jumbo loans are for loan amounts that exceed the conforming loan limit, which is $726,200 in most areas. This limit can be higher in high-cost regions.Jumbo loans often have interest rates that are competitive with conventional loans, though they may be slightly higher depending on market conditions and your credit profile.No, most jumbo loans do not require private mortgage insurance (PMI), even with lower down payments, but they may require higher down payments to offset the risk.
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