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Jumbo loans

We specialize in real estate loans including Conventional Loans, FHA loans and hard money lending.

What is a Jumbo Loan?

A jumbo loan is a type of mortgage that exceeds the conforming loan limit set by the Federal Housing Finance Agency (FHFA). The conforming loan limit is the maximum amount that Fannie Mae and Freddie Mac will purchase or guarantee. In 2023, the conforming loan limit for most counties in the United States is $726,200.

Jumbo loans are available for amounts up to $5 million, or even higher in some cases. They are typically used to purchase more expensive homes, such as those located in high-cost areas.

How do jumbo loans work?

Jumbo loans are similar to conventional mortgages in many ways. They are typically fixed-rate loans with terms of 15 or 30 years. The interest rates on jumbo loans are typically higher than those on conventional mortgages, but they can vary depending on the borrower’s credit score, down payment, and other factors.

Jumbo loans are also subject to different underwriting requirements than conventional mortgages. Borrowers with jumbo loans typically need to have a higher credit score and a lower debt-to-income ratio. They may also need to make a larger down payment.

Who is a good candidate for a jumbo loan?

Jumbo loans are a good option for borrowers who are purchasing a more expensive home and who have the financial resources to meet the stricter underwriting requirements. Borrowers with excellent credit scores and low debt-to-income ratios are more likely to be approved for a jumbo loan.

What are the pros and cons of jumbo loans?

Pros:

  • Jumbo loans can be used to purchase more expensive homes.
  • They offer fixed-rate terms of up to 30 years.
  • The interest rates on jumbo loans can be competitive, especially for borrowers with excellent credit.

Cons:

  • Jumbo loans have stricter underwriting requirements than conventional mortgages.
  • The interest rates on jumbo loans are typically higher than those on conventional mortgages.
  • Jumbo loans may require a larger down payment.

How to get a jumbo loan

To get a jumbo loan, you will need to work with a mortgage lender who specializes in jumbo loans. The lender will assess your financial situation and determine if you are eligible for a jumbo loan. If you are approved, the lender will help you choose a loan term and interest rate.

Conclusion

Jumbo loans are a good option for borrowers who are purchasing a more expensive home and who have the financial resources to meet the stricter underwriting requirements. If you are considering a jumbo loan, be sure to work with a qualified mortgage lender to understand your options and get the best possible deal.

Here are some additional resources that you may find helpful:

  • The Federal Housing Finance Agency (FHFA): https://www.fhfa.gov/
  • Fannie Mae: https://www.fanniemae.com/
  • Freddie Mac: https://www.freddiemac.com/
  • Mortgage Bankers Association: https://www.mba.org/
  • National Association of Realtors: https://www.nar.realtor/