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Jumbo Loans


What Is a Jumbo Loan?

A jumbo loan is a type of mortgage used when you need to borrow more than the standard limits set for conventional loans. These loans are often necessary for purchasing high-value properties—such as homes priced above $1 million—where traditional financing may not be enough.

What Can You Buy With a Jumbo Loan?

Jumbo loans aren’t just for primary residences. You can also use one to finance a second home, vacation property, or even an investment property.

Jumbo Loan Limits

Although jumbo loans allow for borrowing beyond conventional limits, lenders still place caps on the maximum loan amount. These limits vary by lender. If you want to stay within a specific limit, you can reduce the loan amount by making a larger down payment.

How to Qualify for a Jumbo Loan

Qualifying for a jumbo loan typically involves more stringent requirements than standard mortgages. Since these loans aren’t backed by Fannie Mae or Freddie Mac, lenders take on more risk and, in turn, enforce stricter criteria.

To improve your chances of approval, focus on these key areas:

• Income Requirements
Documentation is essential, though it may vary depending on your employment type. Be prepared to provide:
– W-2 forms from your employer
– Bank statements (especially if you’re self-employed or rely on passive income)

– Proof of rental income for multi-family or investment properties

• Down Payment

Most lenders require 10–20% down, but some may accept less. Keep in mind that a smaller down payment typically results in a higher interest rate.

• Credit Score
A strong credit profile is critical. While some lenders accept scores as low as 660, most borrowers approved for jumbo loans have a credit score of 740 or higher. Lower scores may still qualify but often come with higher rates.
• Debt-to-Income (DTI) Ratio
Your DTI ratio should generally be 43% or lower—stricter than what’s required for many conventional loans.