Unlocking the Secrets: Demystifying Jumbo Loans for Dream Homes

India Kinchelow
Mar 11, 2023
2 min read

Updated: Jul 15, 2023

If you're in the market for a new home or looking to refinance your existing mortgage, you may have heard the term "jumbo loan" thrown around. So, what exactly is a jumbo loan?

Well, let's unpack it.

Jumbo Loan Defined

A jumbo loan is a type of mortgage that exceeds the limits set by the Federal Housing Finance Agency (FHFA) for conventional loans. As of 2023, in most parts of the United States, the current limit for a conventional loan is $726,200. However, in areas with higher housing costs, such as San Francisco or New York City, the limit is higher. The maximum conventional loan limit anywhere in the United States is $1,089,300.

So, why would someone need a jumbo loan? If you're looking to borrow more than the conventional loan limit for your area, you'll need to apply for a jumbo loan. These loans are considered riskier for lenders, as they involve larger amounts of money and often require a higher credit score and larger down payment from the borrower.

Jumbo Loan Specialist

So, if you're considering a jumbo loan, it's important to do your research and compare offers from lenders. You'll want to make sure you're getting a competitive interest rate and favorable terms that fit your financial situation. Working with a lender who specializes in jumbo loans will provide the best opportunity to take advantage of the best jumbo programs and loan pricing.

Most lenders typically require a minimum credit score of 720 or higher, and often require a down payment of 20% or more. Additionally, borrowers may need to provide more documentation to prove their income and assets. However, you will find that a lender who specializes in jumbo loans will have much more flexible requirements.

Overall, jumbo loans are a viable option for borrowers who need to finance a higher-priced home or tap into their home equity. However, they do come with some additional risks and requirements, so it's important to find the right lender to work with.

Questions?

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