JUMBO LOAN

A Jumbo Loan is a type of non-conforming mortgage loan that is not backed by the federal government and exceeds the conventional conforming loan limits set by the Federal Housing Finance Agency (FHFA). If you’re looking to finance a more expensive property or you live in a high-cost area, you may need a Jumbo Loan.

Jumbo Loan Eligibility

While anyone can apply for a Jumbo Loan, remember that the requirements may be stricter than the application requirements for a Conventional Loan, since you will be borrowing an amount higher than the conforming loan limit. To apply for a Jumbo Loan, applicants must meet the following requirements: 

• Proof of employment history and verifiable income
• A loan that exceeds the conforming loan limits in your area 
• A credit score around 680 or above
• A down payment of 10.01%^* or above 
• A debt-to-income ratio of 43% or below

*Jumbo Payment example: If you bought a $1,500,000 home with a down payment of 20%, for a loan amount of $1,200,000, on a 30 year loan at a fixed rate of 7.0% (7.201% Annual Percentage Rate), you would make 360 monthly payments of $7,984.00. Payment stated does not include taxes and insurance, which will result in a higher payment.

Jumbo Loan Credit Score Requirements

In general, you should strive for a credit score of 680 or above when applying for a Jumbo Loan. However, borrowers who fall short of certain Jumbo Loan requirements should always check with us to explore other loan options.

Jumbo Loan Down Payment Requirements

Most of our Jumbo Loan options require down payments of 10.01% or above. Unlike conforming loans, Jumbo Loans rarely have low down payment options or down payment assistance. 

Jumbo Loan Debt-to-Income (DTI) Requirements

Though Conventional Loans have more lenient DTI standards, Jumbo Loans typically have a maximum DTI of 43%. Your DTI is one way that lenders assess how you manage your finances. Your DTI is your total recurring monthly debts (student loans, credit card payments, etc.), divided by your monthly pre-tax income, expressed as a percentage. For example, if your rent is $1,000 per month, your car payment is $500 per month, and your monthly credit card payment is $800, your total monthly debt is $2,300. If your gross income is $6,000 per month, then your DTI is roughly 38% (2,300 ÷ 6,000 = 38.3).

Mortgage Insurance for Jumbo Loans

Mortgage insurance is typically not an option for most Jumbo Loans, which is another reason why their requirements are slightly higher. 

Types of Jumbo Loans

We offer several different Jumbo Loan options with slightly different requirements: 

• Classic Jumbo - Loan amounts up to $3 million. Cash reserves of 6 - 30 months. Available for 1-4 unit properties. 
• Elite Jumbo - Loan amounts up to $2 million.  Cash reserves of 6 - 30 months. Available for 1-2 unit properties. 
• Flex Jumbo - Loan amounts up to $5 million. Cash reserves of 9 - 36 months. Available for 1-4 unit properties. 
• Premier Jumbo - Loan amounts up to $2.5 million. Cash reserves of 6 - 24 months (QM) or 12 - 48 months (Non QM). Available for 1-2 unit primary residences and 1-4 unit investment properties. 
• Expanded Jumbo - Loan amounts up to $2 million. Cash reserves of 6 - 18 months (QM) or 6 - 24 months (Non QM). Available for 1-4 unit properties. 
• Jumbo A - Loan amounts up to $3 million. Cash reserves of 12 - 30 months. Available for 1-4 unit properties.

Properties Eligible for Jumbo Loans

Eligible properties vary per Jumbo Loan product, but in general, they can be a primary residence or second home, with certain jumbo products offering investment property financing as well. Though some products only offer financing for properties with 1-2 units, others will accept 1-4 unit-properties. For example, eligible properties for our Jumbo A Loan include single-family homes, PUDs, Condos, and 2-4 unit properties. 

How to Apply for a Jumbo Loan

You apply for a Jumbo Loan just as you would apply for any other loan. To get started, you will want to gather the following: 

• Proof of income and employment (pay stubs, tax returns, W-2 statements etc.)
• Documentation of financial assets (bank statements, etc.)
• Residential history (previous two years’ worth)
• Your credit history (it’s also a good idea to check your credit report - not score - here)
• Identity information like your driver’s license, Social Security card, and date of birth in order to apply

To start your Jumbo Loan application and get preapproved click here, to find a local loan officer click here.

If you have questions and want to speak to someone right away, give us a call at 1.757.268.2157.