Jumbo Loan

A Jumbo Loan is a mortgage for more than the conforming limit set by Fannie Mae and Freddie Mac. In most counties, any mortgage of more than $424,100 is a jumbo loan. In counties with high home prices, the conforming limit is higher -- up to $636,150.

The interest charged on a jumbo mortgage is generally higher than a conforming mortgage due to the higher risk to the lender. Additionally, jumbo loans often have stricter underwriting and larger down payment requirements due to the larger loan amount.

Jumbo loans are available for primary residences, vacation homes, and investment property types. Fixed or adjustable rates are available.

If you’re thinking of purchasing an expensive property and you have a low debt-to-income ratio, a high credit score, and a large down payment, then a jumbo loan may be right for you. Jumbo loans are better suited to high income earners that have good credit history and financial discipline.

To qualify for a Jumbo Loan you'll need:

  • Good credit history. You will typically need a FICO score of 700 or above. You will need to show that you have at least six months’ worth of recent mortgage payments in the bank account.

  • Income and assets. When you apply for a jumbo loan, you will need 20% of the loan value as a down payment. The lender will therefore need to see evidence of your employment, earning potential, and assets to ensure that you can repay the loan.