A jumbo mortgage is what you are going to need if you plan to buy an expensive home. Conforming loans are capped at $424,100 (in most areas) for a single unit residence. Jumbo mortgages are loans that are larger than the conforming limits in your area. In a few select geographies such as California or New York where homes are more expensive, jumbo mortgages start as high as $636,150. Hawaii even higher at $721,050 in some areas.
Jumbo Mortgage Lenders With The Best Rates
If there is one thing we have learned over the years is that guidelines change and so do rates. One size does not fit all and a lender that has a great rate one one program may not necessarily have the best rates for others. The best thing is to CLICK TO BE CONNECTED WITH A JUMBO MORTGAGE LENDER for the best possible rates.
Pros and Cons of a Jumbo Mortgage
- Jumbo loans enable you to purchase that very expensive dream home
- Plenty of lenders offer jumbo loans
- Higher down payment required
- Credit score requirements may be higher
- Rates are a bit higher than conforming loans
- You will need more cash reserves
- General guidelines may be more stringent
Qualifying for a Jumbo Mortgage
- Debt to Income Ratios – With conforming loans, many lenders have flexibility but with Jumbo Mortgages they will keep the DTI limit closer to 45% or below.
- Credit Score Requirements – This is a bit more difficult too. Many lenders require higher scores than with conforming loan amounts. It is best to have us connect you with a loan professional to discuss your personal scenario.
- Cash Reserves – Typically you would need 6 months’ of PITI (principal, interest, taxes and insurance) reserves. The more reserves you have, the better the chances you will be approved for a jumbo loan.
- Loan Documentation – The documentation requirements will be the same as with the conforming loans. One would expect that a borrower who is applying for a jumbo loan will have more assets though.
- Appraisals – This should also be the same as with conforming loans. However, we have seen multi million dollar loans and the lender requiring a second appraisal. The other thing to note is that sometimes the cost of the appraisal is higher when the purchase price of the home is much higher.
Jumbo Mortgage Freqently Asked Questions – FAQ
What is the nimumum jumbo mortgage loan amount? Jumbo Mortgages start after $453,100 in most areas. However, there are some high cost areas where the conforming limit is higher and then jumbo mortgages start after that.
Are there Jumbo Adjustable mortgages? Yes, and in many instances this may be the best option for some borrowers.
What is the minimum credit score required for a jumbo mortgage? Although it may vary by lender, the credit score required is typically a little higher than for conforming loans. You should target a score of 700.
Is there a minimum down payment amount for a jumbo Mortgage? No, there is no minimum but putting at least 20% down gives you a better chance of being approved. Also, the PMI can get expensive if you put less than 20% down.
Can you get a jumbo stated income or jumbo no document loan? Those programs do exist but they are n ot easy to find. The good news is that we are connected to the lenders who do offer those programs for self employed borrowers.