Jumbo home loans are a type of mortgage that exceed the conforming loan limits set by Fannie Mae and Freddie Mac. These loan limits vary by location and are adjusted annually, but typically range from $548,250 to $822,375 in most areas. Jumbo home loans are offered by private lenders, such as banks and mortgage companies, and are not backed by the government.
To qualify for a jumbo home loan, borrowers typically need to have a good credit score, a high income, and a substantial down payment. Jumbo loans typically require a down payment of at least 10% of the home’s purchase price, but some lenders may require a higher down payment depending on the borrower’s credit score and financial situation.
Jumbo home loans offer several benefits to borrowers, including the ability to purchase a higher-priced home, more flexible eligibility requirements, and customized terms and rates. Jumbo loans can also be used for investment properties or second homes.
Jumbo loans come in different types, including fixed-rate mortgages and adjustable-rate mortgages (ARMs). With a fixed-rate mortgage, the interest rate stays the same for the life of the loan, which can range from 10 to 30 years. ARMs have interest rates that can change after an initial fixed-rate period of 3, 5, or 7 years. ARMs can be a good option for borrowers who plan to sell or refinance their home before the interest rate adjusts.
Overall, jumbo home loans are a good option for borrowers who need to borrow more than the conforming loan limits set by Fannie Mae and Freddie Mac. These loans offer more flexible eligibility requirements and customized terms and rates, but also require a higher down payment and more stringent credit and income requirements. One of our highly knowledgeable loan officers can help guide you through the process and find the right loan for you.
There are many benefits, including: financing available up to $2.5 million; the convenience of one loan for the entire loan amount instead of having multiple mortgages; competitive pricing… and more.