What is a Jumbo Mortgage?
A jumbo mortgage is a home loan for an amount that exceeds conforming loan limits established by Fannie Mae and Freddie Mac. The conforming loan limit is $424,100 (2017) in most of the United States. However, this conforming limit changes to $636,150 in the highest-cost areas. Therefore, loan amounts exceeding $424,100 & $636,150 in certain areas constitute "JUMBO LOANS".
Qualifying for a Jumbo Mortgage:
The underwriting process for jumbo mortgages is similar to that of a conforming mortgage, except that jumbo lenders sometimes require 2 appraisals instead of just 1. Down payment requirements differ in many cases. Jumbo loans generally require higher down payments -- depending on the lender, the minimum down payment could be 20% to 30% for home purchases. Â Many lenders require a credit score of 700 or higher, a debt-to-income ratio of 43% or less, and 6 to 12 months' worth of reserves. Are you qualified? Contact us for a free consultation and rate quote.
Conforming loan limits are set by the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, the government-sponsored enterprises that buy mortgages from lenders.A loan is considered jumbo if the amount of the mortgage exceeds loan-servicing limits set by Fannie Mae and Freddie Mac — currently $424,100 for a single-family home in all states (except Hawaii and Alaska and a few federally designated high-cost markets, where the limit is $636,150).
Jumbo mortgages are available for primary residences, second or vacation homes and investment properties, and are also available in a variety of terms, including fixed-rate and adjustable-rate loans. A jumbo loan will typically have a higher interest rate, stricter underwriting rules and require a larger down payment than a standard mortgage.
All loan products or terms available in all states. Rates, fees and other terms subject to change without notice. Loans are subject to credit and property approval. Normal credit qualification and other terms and conditions apply. If approved your terms may vary based upon your specific situation. This does not represent a commitment to lend.
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