JUMBO
Purchase

A jumbo mortgage loan is a type of home loan that exceeds the conforming loan limits set by government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac. These limits vary by location but are typically around $726,200 in most parts of the U.S. in 2024, with higher thresholds in certain high-cost areas. Because jumbo loans are larger than what GSEs will purchase, they carry more risk for lenders and, as a result, tend to have stricter qualification requirements and higher interest rates compared to conforming loans.

Qualifying for a jumbo mortgage typically requires a strong financial profile. Borrowers generally need a higher credit score, often 700 or above, as well as a lower debt-to-income (DTI) ratio. Lenders also look for substantial cash reserves and larger down payments, usually 10% to 20% or more. Because these loans are not backed by government entities, the lender assumes more risk, making it crucial that the borrower demonstrates financial stability. Additionally, because of the larger loan amounts, lenders might require multiple appraisals to ensure the property value aligns with the loan amount.

Jumbo loans offer financing options for luxury homes or properties in high-cost areas where home prices exceed the conforming loan limits. While they can be more expensive and harder to obtain, jumbo mortgage loans provide borrowers the opportunity to purchase high-value properties without needing multiple loans. Borrowers who qualify may also find that these loans come with customizable terms, such as fixed or adjustable rates, providing some flexibility despite their more stringent requirements.