A jumbo loan is a loan that is larger than the conforming limits set on government-sponsored home loans. In other words, the “jumbo” part of the name is based on the amount of the loan, and it does vary from market to market.
In most areas, a jumbo mortgage loan limit is $424,100. In counties with the most expensive homes, the limit is $636,150. These areas include the high cost of living locations such as New York City, District of Columbia and many cities in California.
Qualifying Concerns
Home buyers often times have concerns about their ability to qualify for a jumbo mortgage loan. With more lenders offering these loans and at better rates than in the past, many home buyers can rest assured that they will qualify for these larger loan products.
To qualify for a jumbo mortgage loan the home buyer will typically need to be making the purchase for a primary residence, but some lenders will provide these loans for well-qualified buyers for rental, investment properties or second homes.
In most cases, jumbo loans will require at least 20% down. With the size of these loans, most buyers will attempt to put down the largest possible down payment. Borrowers, however, will have a variety of loan options to consider. Most lenders will require a credit score of at least 720 with many requiring higher than that.
Most lenders will offer a fixed-rate interest only loan, which allows the buyer to make payments on the interest only for the first five to seven years of the loan. Another popular option is the fixed-rate amortizing jumbo loan, typically for 30 years. There is also ARM (adjustable-rate mortgage) options that offer different schedules.
To learn more about the jumbo mortgage loan options offered by the experts at Guaranteed Rate, contact us through the website. We are easy to find online at website.
