A Jumbo loan has a principal loan amount that is bigger than conforming loan limits. For 2018, the maximum conventional loan amount is $453,100 (ranging up to $679,650 in high-cost areas) for a single-family home.
Is a Jumbo Loan Right For Me?
If you need to borrow more than the above-stated conforming loan limits, then yes, a Jumbo loan is the way to go for you.
- 30 year & 15 year loans
- Low fixed rates
- ARM loan options available
- ≥680 credit scores OK
- Finance up to 85% loan-to-value
- Maximum loan amount of $2,500,000 for primary and secondary homes, $1,000,000 for investment properties
Things You Should Know About a Jumbo Loan:
The requirements for Jumbo loans offered by most financial institutions are similar to those for conventional loans. However, as you might suspect, some qualifications to get a bigger loan can be more robust.
- For more expensive properties, lenders may require two separate appraisals
- Minimum down payment of 20% typically required
- Lender may require 6-to-12-months of financial reserve beyond the down payment to ensure the borrower can cover the mortgage payments
- Most Jumbos do not require private mortgage insurance
- More paperwork and documentation may be required to demonstrate financial capacity
- Because of larger amount borrowed, closing costs may be higher than with conventional loans
A Jumbo mortgage loan with a sound financial institution may be a good way for you to finance your home, especially if it is in the $450,000+ range, depending on the area. Carefully consider the financial commitment that you can afford for any home purchase, but especially for those on the higher end of the spectrum.