Jumbo Loan
Highlights of the
Jumbo Loan
(1) Can borrow more than the conventional loan limits, making it easier to finance luxury homes or properties in high-cost areas (2) Rates can be comparable to, or sometimes even lower than, conventional loans for borrowers with strong credit and financials.
Eligibility
Here are some of the eligibility requirements for the Jumbo Loan program. Select ‘Get Started’ to check if you’ll be a good fit.
A minimum score of 700-740 is usually required, though some lenders may allow slightly lower with compensating factors
Most lenders prefer a DTI ratio of 43% or lower, though some may go up to 45% with strong financials
Expect to put down at least 10-20% of the home’s price, though some lenders may require 25-30% for high-priced properties
Borrowers often need 6-12 months’ worth of mortgage payments in reserves to show financial stability
Consistent and verifiable income is essential, often requiring two years of tax returns, W-2s, and recent pay stubs
A thorough appraisal is required to confirm the home’s value, sometimes with two appraisals for higher loan amounts
Common Questions
Are interest rates higher on Jumbo loans?
Not always. Jumbo loan rates can be comparable to conventional loans if the borrower has excellent credit and financials.
Can I use a Jumbo loan for a second home or investment property?
Yes, Jumbo loans can be used for primary residences, vacation homes, and sometimes investment properties.
Is private mortgage insurance (PMI) required for Jumbo loans?
No, PMI is not usually required, but the higher down payment helps mitigate the lender’s risk.
Are Jumbo loans available for new construction homes?
Yes, Jumbo loans can finance new construction, but the appraisal and underwriting process may take longer.
How long does it take to close a Jumbo loan?
It may take slightly longer than a conventional loan, usually around 30-45 days due to stricter underwriting.
Other Info
Multiple Appraisals May Be Required
For high-value properties, some lenders require two appraisals to confirm the home’s value.
Not Backed by Government Entities
Jumbo loans are not guaranteed by Fannie Mae or Freddie Mac, which is why lenders impose stricter requirements to minimize risk.