What is a Jumbo Mortgage?

Jumbo loan amounts exceed the conforming limit on loans set by Fannie Mae and Freddie Mac. If you’re looking to buy an expensive home and need a large loan amount, a jumbo loan could be the right option for you. To qualify, requirements for the borrower will be different compared to requirements of other loan types. Usually jumbo loans require a lower debt-to-income ratio, a higher credit score, and higher emergency funds.

Jumbo Mortgage FAQs

What is a jumbo mortgage loan?

A jumbo mortgage loan is a mortgage that exceeds “conforming” loan limits. Conforming loan limits were established in 2006 by Fannie Mae and Freddie Mac, and new limits were established in 2018. The current conforming loan limit for a single-family home is $453,100. This means that any loan of more than $453,100 is considered a jumbo or non-conforming loan. That limit can vary however, depending on the county the home is located in. There are roughly 200 counties in the U.S. where the loan limits are higher due to higher home prices.

What are the conforming mortgage loan limits in my county?

You can use this link for a map detailing each state’s individual requirements: fhfa.gov/DataTools/Tools/Pages/Borrower-Assistance-Map.aspx

What type of house can I buy using a jumbo mortgage loan?

In addition to financing single-family homes for your primary residence, you may also use a jumbo loan to buy a second home or personal investment properties.

What are the down payment or equity requirements for jumbo mortgage loan?

Fannie Mae has made some changes recently to the down-payment requirements for purchasing property with a high balance mortgage. The amount of equity required for a refinance is lower than it is for a purchase.

Here is a quick look at the down-payment and equity requirements for fixed rate mortgages.

Mortgage Type Mortgage Purpose Number of Units Loan-To-Value (LTV)
Primary Purchase 1 95%
Primary Purchase 2 85%
Primary Purchase 3 to 4 75%
Primary Rate and Term Refinance 1 95%
Primary Rate and Term Refinance 2 85%
Primary Rate and Term Refinance 3 to 4 75%
Primary Cash-Out Refinance 1 80%
Primary Cash-Out Refinance 2 to 4 75%
Second Home Purchase 1 90%
Second Home Rate and Term Refinance 1 90%
Second Home Cash-Out Refinance 1 75%
Investment Property Purchase 1 85%
Investment Property Purchase 2 to 4 75%
Investment Property Rate and Term Refinance 1 75%
Investment Property Rate and Term Refinance 2 to 4 75%
Investment Property Cash-Out Refinance 1 75%
Investment Property Cash-Out Refinance 2 to 4 70%
What does LTV (Loan-to-Value) mean?

Loan-to-value (LTV) ratio is a term used by mortgage lenders to show the ratio of a loan or loan balance to the value of a property purchased or refinanced. The term is commonly used by mortgage lenders, banks, and other financial institutions to represent the ratio of the first mortgage line as a percentage of the total appraised value of real property.

Mortgage Calculator

Calculate your potential new monthly mortgage payment in seconds with this handy calculator so you can make sure you have enough money left over each month for all your other expenses. Choose your rate and term—you might be surprised to see how affordable it is to own your home in less time than you thought. See how much interest you’ll pay over the life of the loan, and enter prepayment amounts to calculate their impact on your mortgage.

The Benefits of a Jumbo Mortgage Loan

  • Larger Home Purchase

    Because jumbos don’t have non-conforming loan limits, borrowers can buy a larger home without having to use two loans.
  • Fixed or Adjustable

    Jumbo mortgages come in both the fixed rate and adjustable rate varieties giving you the same options as a conforming loan.
  • Lower Down Payment

    With an above average credit score you can qualify for a jumbo mortgage with as little as 10% down.
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