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Jumbo Mortgage

You may have heard the term Jumbo Mortgage and thought to yourself "It's a loan for a home...of course it's huge!" but what exactly is a jumbo home loan?

Jumbo Mortgage

You may have heard the term Jumbo Mortgage and thought to yourself “It’s a loan for a home…of course it’s huge!” but what exactly is a jumbo home loan?

What is a Jumbo Mortgage?

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A jumbo loan is a type of conventional loan that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA) for Fannie Mae and Freddie Mac. In 2023, single-family mortgages with balances higher than $726,200 in most U.S. counties (and $1,089,300 in high-cost areas) will be considered jumbo. 

What Requirements Do They Have?

So what requirements come with jumbo loans? Not surprisingly they are more stringent when approving them as there is a lot more risk involved with such high loan amounts but here are some of the common requirements: 

Credit Score: Your credit score generally will need to be above 700 to qualify for this size of loan. 

Down Payment: You should expect to put down a 20% minimum downpayment, and many lenders will require even more. 

DTI Ratio: Your debt to income ratio needs to be below 45%. Even if on paper you have a large income and think that will be suitable for a large loan, if you have a lot of debt it will not be approved.

Closing Costs: Expect to have higher closing costs when it comes to jumbo loans than you would have with a conventional mortgage. 

It’s always important to speak to your lender about your options when looking at purchasing a home and weighing the different available options to come up with your best plan of action to set you up in a good place for the long term.  If you have questions about if it’s a good option for you, Schedule a consult with us and let’s chat more!

Download A Free Copy of our homebuyers guide.

It’s full of everything you need to know before buying a new or next home. 

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