Jumbo Loans
A jumbo loan, also called a “non-conforming mortgage,” is used to finance properties that exceed the conforming limits set by the Federal Housing Finance Agency (FHFA) and are not guaranteed by Fannie Mae or Freddie Mac.
Jumbo mortgages can finance primary residences, luxury homes, investment properties, or homes in highly competitive markets. These loans are typically larger than conforming loans, come with stricter underwriting rules, higher interest rates, and often require a larger down payment. Loan limits vary by state and county, and are updated annually by the FHFA.
Jumbo Loan Requirements
- Credit Score: Usually 680 or higher for standard jumbo loans.
- Debt-to-Income Ratio: Typically 43–45% or lower depending on cash reserves.
- Cash Reserves: Borrowers often need reserves to cover up to 12 months of mortgage payments.
- Documentation: Full tax returns, W-2s/1099s, bank statements, and investment accounts are required.
- Appraisals: Some lenders may request a second appraisal of the property.
Benefits of Jumbo Loans
- Competitive interest rates without conforming loan limits.
- Down payment as low as 10% for qualified borrowers.
- Financing for primary homes, second homes, or investment properties up to 40 acres.
- Eligible veterans/service members may access jumbo VA loans with lower down payment.
- Ability to finance more of your home’s cost without tying up cash.
- Accessible to a wide range of borrowers, not just millionaires—if payments are manageable.
Expert Help
Our experienced loan consultants can answer your questions and guide you through the jumbo loan process. Contact our experts at 408-242-0283 for more information.