Jumbo loans are exactly what they sound like — large loans for expensive homes. They differ by amount from state to state and are not secured by Freddie Mac or Fannie Mae. In most counties/states, homes over $766,550 require a jumbo loan (this of course differs in areas of higher-cost homes). For reference, if you hear the term non-conforming loan or non-conforming conventional loan — it’s the same as a jumbo loan.
To qualify for a jumbo loan, buyers usually need to have a low debt to income ratio (under 43% but aim for 36%) and a decent credit score (over 700). These loans also require all of the other loan requirements like proof of income and assets to cover payments, pay-stubs, etc. Sometimes, buyers must prove they have enough cash on hand to cover a year of mortgage payments. This is call a 12-month seasoning reserve requirement. This is a grip of cash but it lessons the risk for investors so we can offer you a lower interest rate. How does that grab you?

Down payments required for a jumbo loan used to be closer to 30% of the home price. Now, they are usually within the range of 10-15 percent of the home price but closer to 20% is always better. While APR (annual percentage rates) used to be higher for jumbo loans, recently they’re similar to the APR rates of conventional loans. Closing costs may be higher with a jumbo loan because there is more money on the table in the first place. 
If you’re in a position to purchase a high-dollar home and have the assets to do so — a jumbo loan is probably the right route for you and your lender can assure you of this. 

There are more loan types out there so always touch base with us to explore off of your options! If you need more information sooner — give us a call now and we’ll get you hooked up!