Jumbo Loans
- Typically Requires 20% Down Payment
- 660 Minimum Credit Score
- Loan Terms from 10 to 30 Years
- No Mortgage Insurance Option
- Loan Amounts Over $726,200
Jumbo purchase loans, also known as jumbo mortgages, are home loans that exceed the conforming loan limits set by the Federal Housing Finance Agency (FHFA). These loans are used to finance higher-priced properties that exceed the loan limit for conventional conforming loans.
Here are some key features of jumbo purchase loans:
- Loan Limits: Jumbo loans are typically used for high-value properties where the loan amount exceeds the conforming loan limits set by the FHFA. The specific loan limits can vary by location and are adjusted annually. Loan limits are higher in areas with higher-cost housing markets.
- Higher Loan Amounts: Jumbo loans allow borrowers to finance larger loan amounts compared to conventional loans. The exact loan amount will depend on factors such as the borrower's financial profile, creditworthiness, and the specific loan program. Jumbo loans can be used for primary residences, second homes, and investment properties.
- Down Payment: Jumbo loans generally require a larger down payment compared to conventional loans. The down payment requirements can vary but typically range from 10% to 20% of the purchase price. Some lenders may require a larger down payment depending on factors such as the borrower's credit profile and the loan amount.
- Credit Requirements: Jumbo loans typically have stricter credit requirements compared to conventional loans. Lenders often require a higher credit score, typically above 700, to qualify for a jumbo loan. Additionally, lenders may consider the borrower's debt-to-income ratio, employment history, and financial reserves.
- Interest Rates: Jumbo loans may have slightly higher interest rates compared to conventional loans due to the larger loan amount and perceived higher risk for lenders. The interest rate can vary based on factors such as the borrower's credit score, loan-to-value ratio, and market conditions. Shopping around and comparing rates from different lenders is advisable to secure the most favorable terms.
- Documentation and Income Verification: Jumbo loan applicants often undergo thorough documentation and income verification processes. Lenders may require additional financial documentation, such as bank statements, tax returns, and proof of assets, to evaluate the borrower's financial stability and ability to repay the loan.
It's important to work with a reputable lender or mortgage professional experienced in jumbo loans to explore the options available, understand the specific requirements, and determine the best loan terms based on individual circumstances.