Jumbo Loans: Financing for High-Value Homes
A jumbo loan is a mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). These loans are designed for buyers purchasing higher-priced homes and require stricter qualifications.
Key Features
- Higher Loan Limits – Exceeds the conforming loan limits, which vary by location.
- Competitive Interest Rates – Rates may be slightly higher or comparable to conventional loans, depending on borrower qualifications.
- Larger Down Payments – Typically requires at least 10-20% down.
- No Private Mortgage Insurance (PMI) – Many jumbo loans do not require PMI, even with less than 20% down.
- Flexible Property Options – Can be used for primary residences, vacation homes, and investment properties.
Who Qualifies?
- Borrowers with a credit score of 700 or higher typically qualify.
- A strong financial profile with stable income and assets is required.
- Lower debt-to-income (DTI) ratios are preferred by lenders.
Types of Jumbo Loans
Fixed-Rate Jumbo Loans
Provides a consistent interest rate over the loan term.
Adjustable-Rate Jumbo Loans (ARM)
Offers a lower initial rate that adjusts over time.
Jumbo loans provide financing for high-value homes and offer competitive options for qualified borrowers.