Perfect for Expensive Markets
Jumbo Loans
Jumbo loans are non-conforming mortgage options designed for buyers purchasing in high-cost areas or those seeking homes with larger budgets.
Benefits
- Loan amounts available up to $5 million
- Down payment options as low as 10%
- Mortgage Insurance (PMI) is not always required
Eligibility
- Minimum 10% down payment (best rates available with 25% or more down)
- Minimum credit score requirement of 680
- At least 6 months of reserves required
- Stricter underwriting standards compared to conforming loans
NEXT STEP
Get your personalized consultation today.
- No obligation required
- No hit on your credit score
- Quick and hassle-free process
- No paperwork needed
What is a Jumbo Loan?
A jumbo loan is designed for purchasing high-value homes or larger properties where the loan amount exceeds the conforming limits established by the Federal Housing Finance Agency (FHFA). The FHFA, which regulates Fannie Mae and Freddie Mac, updates county loan limits each year to define the maximum size of loans these agencies can purchase.
Since jumbo loans exceed those limits, they are classified as “non-conforming” and cannot be sold to Fannie Mae or Freddie Mac. Instead, they are underwritten according to the guidelines of private investors—often large financial institutions—that keep these loans on their books. Because the risk is higher, investors set more stringent requirements for approval.
To qualify, borrowers generally need a stronger financial profile, which means higher credit scores, lower debt-to-income (DTI) ratios, larger down payments, sufficient cash reserves, and stricter underwriting standards overall.
The Role of Investors in Jumbo Financing
Investors—such as major banks, credit unions, and investment funds—purchase mortgages from mortgage banks shortly after they are funded. We, on the other hand, partner with a wide range of jumbo investors, each with its own criteria for approval, including minimum credit scores, required post-closing reserves, debt-to-income ratios, and down payment thresholds.
When we issue jumbo pre-approvals, we carefully match borrowers with the investor offering the most competitive terms for their financial profile. Some investors maintain very strict guidelines but reward qualified borrowers with lower jumbo rates. Others may have more flexible standards, though their rates are usually higher. This allows us to strategically align each client with the option that maximizes both savings and approval confidence.
Pros & Cons of Jumbo Loans
Pros
Potential for Lower Rates (Market-Driven)
Since jumbo loans have stricter qualification standards than conforming loans, they can sometimes offer lower interest rates. However, because jumbo loans are heavily influenced by investor demand and market liquidity, rates may fluctuate. For example, during COVID, jumbo rates hit record lows due to Federal Reserve liquidity, but as the Fed tightened, jumbo rates surged above conforming loan rates.
Access to Larger Loan Amounts
Jumbo loans provide financing well above conforming loan limits, allowing buyers to purchase higher-priced homes or properties in expensive markets without restrictions.
Variety of Loan Options
We work with over a dozen jumbo investors, each offering unique guidelines and pricing. This wide range of choices gives us the flexibility to match you with the investor and program that best fit your goals.
Cons
Tougher Qualification Standards
Qualifying for a jumbo loan is more challenging—you’ll need strong credit, stable and verifiable income, and substantial assets. If you can’t meet these requirements, staying within conforming loan limits or considering piggyback financing may be necessary.
Longer Closing Times
Because jumbo loans undergo more detailed underwriting and stricter appraisal requirements, the process often takes longer than conventional or FHA loans.
Is a jumbo loan right for you?
Every homeowner’s situation is unique, and there’s no one-size-fits-all mortgage. The best way to know if a jumbo loan is right for you is to connect with our team. We’ll walk you through personalized payment scenarios, share the latest rate options, and answer all your questions so you can move forward with confidence.