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Jumbo Mortgage Requirements

What is a Jumbo Mortgage?
Traditional conforming mortgages (i.e. those that follow guidelines for mortgage maximums set by Fannie Mae and Freddie Mac each year) sometimes just aren't enough to purchase a home in the existing real estate market. Don't let this keep you from getting the money you need. By definition, a Jumbo Mortgage is a mortgage with a loan amount above the conventional conforming mortgage limits. This limit is set by the two largest secondary market lenders, Fannie Mae and Freddie Mac. A Jumbo Home Mortgage is generally referring to a mortgage loan that has a Mortgage amount that is greater than $417,000, although the Conforming Mortgage Limits are higher in certain high-cost areas. Jumbo Mortgage options are similar to Conforming Mortgage programs although they usually require a slightly higher down payment.

What are the Jumbo Mortgage Requirements?
To decide if you qualify for an Jumbo Mortgage Loan, we will look at:

  • Your income and your monthly expenses. Standard debt-to-income ratios are 28/36 for Certain Jumbo Mortgages. These ratios may be exceeded with compensation factors.
  • Your credit history (this is important, but Jumbo's credit standards are flexible). A FICO score of 620 or above is very helpful in obtaining an approval.
  • Your overall pattern rather than to individual problems you may have had.

To be eligible for a Jumbo Mortgage, your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income. Your credit background will be considered.

What are the Jumbo Down Payment Requirements?
Jumbo Mortgage Loans require the home buyer to invest at least 3.5% - 25% of the sales price in cash for the down payment and closing costs. If the sales price is $500,000 for example, the home buyer must invest at least $17,500 - $100,000.

What types of property are eligible?
Jumbo Mortgage Guidelines allow you to purchase warrantable condos, planned unit developments, modular homes, manufactured homes, and 1-4 family residences. Jumbo Mortgages can be used to finance primary residences, second homes and investment property.

What is the maximum amount that I can borrow?
The maximum amount for an Jumbo Mortgage Loans are determined by:

Maximum Mortgage amount: The maximum Mortgage 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 see what the conforming Mortgage limit is in the county in which you're interested, visit the following site https://www.efanniemae.com/sf/refmaterials/loanlimits/. This site lists U.S. territories as well as states.

Maximum financing: Depending on the state where the property is located and the Jumbo Mortgage program, the maximum Jumbo Mortgage amount will be 75% - 96.5% of the appraised value of the home or its selling price, whichever is lower (100% for VA Jumbo Mortgages).

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 Why choose a Jumbo Mortgage?

  • A Jumbo Mortgage is required if your desired loan amount is greater than $417,000.
  • There are no prepayment penalties for most Jumbo Mortgage programs.
  • A Jumbo Mortgage can be used for the purchase of a Primary Residence, Second Home or Investment Property.
  • A Jumbo Mortgage is available all areas of the country, provided a market exists for the property and the home meets minimum property standards.
  • An Jumbo Mortgage may be used to purchase or refinance a new or existing one to four family home in urban and rural areas, including manufactured homes on permanent foundations.
  • Jumbo Mortgages are offered at terms of 10, 15, 20 and 30 years. The terms of 15 and 30 years often carry the lowest interest rates.



 Jumbo Mortgage FAQs

Why is it called a jumbo mortgage loan?
It's as simple as it sounds. We call it a jumbo mortgage because it is larger than other "typical" home mortgage loans. If you're looking to purchase a more expensive house, this kind of loan may be exactly what you need.

Why would I need a jumbo mortgage loan?
If you are seeking a loan amount that exceeds $417,000, then you need a jumbo mortgage loan. Each year, Fannie Mae and Freddie Mac set loan "maximums," so anything that exceeds these set amounts is considered a jumbo mortgage loan.

 




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