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Jumbo Mortgage FAQs

Here are some frequently asked questions about jumbo loans.

By: Mutual of Omaha Mortgage

What Is a Jumbo Mortgage Loan?

Jumbo loans are also known as jumbo mortgages. Jumbo loans can be used as purchase loans, refinance loans or cash-out refinance loans. Eligible borrowers can apply for a jumbo mortgage with either a fixed or adjustable rate term. Overall, jumbo loans often have a slightly lower interest rate than other confirming loans, however, jumbo loans have stricter guidelines which typically include stringent income, credit and asset requirements for borrowers. There are jumbo loan program options available for both FHA and VA loan types because there are also conventional loans.

For most counties in the U.S., the conforming loan limit is $510,400. Government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac outline the financing amount that is considered a conforming loan. Jumbo mortgages are therefore non-confirming loans. Jumbo loans allow for mortgage financing which exceed the loan limits set by GSEs. Due to confirming loan limit restrictions, jumbo loans are not secured by the federal government.

What Are Jumbo Loan Limits?

If your dream home is in a pricier neighborhood, you may be able to become a homeowner by securing a jumbo loan for your new home. Jumbo loan limits can vary from state to state. For example, in a state with high property values or luxury markets the conforming loan limit can be well above $700,000.

What Are Jumbo Loan Amounts?

Jumbo mortgage loan amounts exceed the current maximum dollar amount guaranteed by GSEs. Overall, if more than $510,400 is needed to finance a home, the home would qualify for a jumbo loan. This amount can vary a little from state to state when you consider high-priced or luxury markets. If you are unsure if the home you are looking to buy or currently own qualifies for a jumbo loan, contact an experienced jumbo loan specialist.

How Do I Apply For A Jumbo Loan?

To qualify for a jumbo loan, a borrower typically needs a good to excellent credit score often above 700, a low debt-to-income ratio and confirmed assets or access to cash reserves (money left after closing) to minimize their risk profile to lenders. Typically, jumbo loans require a minimum down payment of 20% however some lenders offer options for 15% or 10% down payment options that may come with additional mortgage insurance requirements.  

How Much Is A Jumbo Loan?

As of 2020, for properties in most counties across the U.S., if a borrower needs to borrow more than $510,400 to finance their home, they have exceeded conforming loan limits and could apply for a jumbo loan. Jumbo loan limits can vary slightly from state to state. For example, a single family home in high cost areas such as northern California, Seattle, New York City and Honolulu would be considered within jumbo loan limits if the home price exceeded $721,050. If a borrower needed less to finance their home, they would not qualify for a jumbo loan.