A Jumbo loan is for borrowers looking to finance a property that exceeds the $484,350 (in most areas) loan amount maximum imposed by Fannie Mae and Freddie Mac. This loan is similar to traditional mortgages, but due to the increased risk to the lender, there are more stringent underwriting guidelines.
Benefits of a Jumbo Loan
- Borrower can access larger loan amounts for expensive properties or construction of a dream home
- No need to break up your borrowing needs across two loans
- No need to access savings for large down payments
- Flexible 30-year fixed rate or adjustable rate terms
Is a Jumbo Loan right for me?
If the property you are looking to purchase will have a loan amount over $417,000.00 (in more expensive markets, the minimum amount requirements for a Jumbo loan increase) then a Jumbo Loan is what you need. Examine your finances closely and locate a lender only when you’re confident the larger repayment schedule will not be overwhelming.
You may be eligible for a Jumbo Loan if...
- You have a low debt-to-income ratio
- Debt does not exceed 43% of pre-tax income including PITI, installment debt and minimum revolving credit card payments
- You can provide 2-years proof of income
- You have a credit score of at least 700
- You have 20%-30% for a down payment
- The property meets lender’s qualifications