 Jumbo Loan Requirements
What is a Jumbo Loan?
Traditional conventional loans (loans that follow requirements for loan set by Fannie Mae and Freddie Mac) many times aren't sufficient to buy a home. That doesn't have to keep you from getting the mortgage that you need. A jumbo loan gives borrowers potential loan amounts that can exceed traditional conventional conforming loans. By definition, a Jumbo Loan is a mortgage with a loan amount that exceeds the conventional conforming loan limit and is generally referring to a mortgage loan greater than $417,000. Conforming mortgage loan limits can be higher in certain high cost areas, however.
What are the Jumbo Loan Requirements?
To determine if you qualify for an Jumbo Loan, your lender will will look at the following:
- Your monthly income and your monthly expenses. Standard debt-to-income ratios are 28/36 for Certain Jumbo Loans.
- Your credit history. A FICO score of 620 or above is very helpful in obtaining an approval.
To qualify for a Jumbo Mortgage Loan, housing costs (mortgage principal and interest, property taxes, and insurance) must be less than a specific percentage of your gross income. Your credit background will considered, too. At least a 620 FICO credit score is required to obtain an Jumbo Loan Approval. You need to have enough income to pay your housing costs plus any additional monthly debt obligations.
What are the Jumbo Down Payment Requirements?
Jumbo Mortgage Loans require the home buyer to invest at least 20% - 40% of the sales price in cash for the down payment and closing costs.
What types of property are eligible?
Jumbo Mortgage Guidelines generally accommodate the purchase of condos and 1-4 family residences. Jumbo Loans may be used to finance primary residences, second homes and investment property, depending on lender guidelines.
What is the maximum amount that I can borrow?
The maximum amount for an Jumbo Mortgage Loans are determined by:
Maximum loan amount: The maximum loan amount allowed for an Jumbo Loan varies from $417,000 to $3,000,000, depending on the program. The highest maximum Conforming or FHA Jumbo right now is $729,750. The lowest maximum Jumbo Mortgage amount available in any county is $417,000. To learn about what the jumbo lower limit is in the area in which you're interested, visit https://www.efanniemae.com/sf/refmaterials/loanlimits/. This site lists U.S. territories and states.
Maximum financing: Depending on the state where the property is located and the Jumbo Loan program, the maximum Jumbo Mortgage amount could be 65% - 80% of the lower of the appraised value of the home or its selling price.
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