What is a Jumbo Home Loan?
A Jumbo loan is a non-conforming mortgage used to finance homes that exceed the loan limits set by Fannie Mae and Freddie Mac. These limits vary by location, but in most areas of the U.S. for 2024, the cap is $766,550. Any mortgage above that amount is considered a jumbo loan.
Because they’re larger and not backed by government agencies, jumbo loans carry stricter qualification requirements.
Jumbo Home Loan Requirements
- High Credit Score: Usually 700 or higher
- Low Debt-to-Income (DTI) Ratio: Typically under 43%, sometimes stricter
- Large Down Payment: Often 10–20% or more
- Strong Income & Asset Documentation: Proof of stable, high income and liquid reserves
- Cash Reserves: Often need 6–12 months of mortgage payments in reserve
Why Choose a Jumbo Loan?
- Ideal for high-value homes that exceed conforming limits
- Provides financing for luxury properties or real estate in high-cost markets
- Allows you to buy more home without splitting into multiple smaller loans
- Offers flexibility in terms and structure for qualified buyers
Down Payment Options for Jumbo Loans
- 10%–20% Down: Most lenders require at least 10%
- 15%–30% Down: Common for very large loan amounts
Types of Jumbo Loans
Fixed-Rate Jumbo Loan
Predictable monthly payments over 15, 20, or 30 years
Adjustable-Rate Jumbo Loan (ARM)
Lower initial rates, which adjust after a fixed period
Jumbo Cash-Out Refinance
Refinance your high-value home and take cash out based on your equity
Benefits of Jumbo Loans
- Finances high-value homes with a single loan
- No loan limit restrictions
- Competitive interest rates for qualified buyers
- Customizable loan terms
- Can finance primary homes, second homes, or investment properties
