Jumbo Loans
What it is: Jumbo loans are mortgage products that exceed the conforming loan limits set each year by the Federal Housing Finance Agency (FHFA). Because these loans are larger than what Fannie Mae or Freddie Mac can purchase or guarantee, they are considered “non-conforming.” This means lenders take on more risk, so the qualification standards are higher. Jumbo loans are typically used to finance luxury homes, high-value properties, or real estate in markets where housing prices are above the national average. These loans can be customized in size, term, and rate structure to suit the financial strength and needs of affluent borrowers..
Best for: Jumbo loans are ideal for financially strong borrowers with excellent credit, significant income stability, and substantial cash reserves. Homebuyers looking for competitive interest rates on large loan sizes, or those purchasing luxury primary residences, second homes, or investment properties, often choose jumbo financing.
Underwriting snapshot
Debt-to-income (DTI) ratios are tighter compared to conventional loans, and borrowers are usually expected to maintain substantial cash reserves, often equal to 6 to 12 months of mortgage payments (PITI).
Terms and features
These loans are available in both fixed-rate and adjustable-rate (ARM) options, giving borrowers flexibility based on their financial goals.
Documents you’ll need
Borrowers should be prepared to provide complete income and asset documentation, recent appraisals, proof of homeowners insurance, and additional condo or HOA documentation if applicable.
Do we process this loan type ?
Pros
- Access to larger loan amounts
- Competitive rates with strong profiles
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