Jumbo Loans

Jumbo loans are mortgages used to finance properties that are too expensive for a conventional conforming loan. The maximum amount for a conforming loan is $548,250 in most counties. Homes that exceed the local conforming loan limit require a jumbo loan. These loans are considered riskier for lenders because the loans can’t be guaranteed by Fannie and Freddie, meaning the lender is not protected from losses if a borrower defaults. Jumbo loans are typically available with either a fixed interest rate or an adjustable rate, and they come with a variety of terms.

Jumbo Loans significantly larger loan limits are balanced by somewhat stricter requirements:
Lenders may require your FICO score to be higher than 700, sometimes as high as 720
Lenders will consider your debt-to-income ratio (DTI), and may have a cap of 45% DTI
Plentiful cash reserves will increase likelihood of approval
Qualification may require more extensive documentation than for a conforming loan
A second home appraisal, as well as a down payment of 10-20% may also be required