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Jumbo Loan

The limit in most U.S. counties is $766,550 for a single-family home, but many high-cost areas have a conforming loan limit of up to $1,149,825.

While interest rates are usually a bit higher for jumbo loans, they have actually been very competitive over the last two years, sometimes even lower than conforming loan rates.

Where to apply for Jumbo Loans - Mortgage Investors Group

Jumbo Loan Qualifications


 

To qualify for a jumbo loan, you will need to demonstrate good credit, a substantial down payment (often 20 percent or more down, but options are available for as little as 10.01 percent down), and high income.

  • Jumbo loans require more documentation than most conforming loans. A full two years of income/employment and two months of assets will be reviewed to determine eligibility. 
  • Sufficient income to qualify at more restrictive debt-to-income ratio (DTI) limits. Luxury properties are more vulnerable to changing market conditions and jumbo loans have a higher risk to lenders.
  • Low DTI. Your monthly expenses considered in qualifying must be less than 43 percent of your gross monthly income. However, when the down payment is less than 20 percent, the DTI must be less than 35 percent. 
  • Credit score minimums are based on several loan factors, but the minimums range from 660 to at least 720.
  • 20 percent down, but options are available for as little as 10.01 percent down payment.
  • Higher reserve requirements are common on jumbo loans, as this mitigates risk by supporting that you have the ability to pay should unforeseen events occur.
  • Not all property types qualify, but MIG offers loan options for primary residences, vacation homes (second homes), and investment properties. 

Jumbo loans are subject to greater scrutiny than in the past. Under new mortgage laws enacted in 2014, all jumbo loans must qualify for Qualified Mortgage status, which protects lenders. 

Both fixed-rate jumbo loans and adjustable-rate loans are available.

Find out what a jumbo loan is - image of new home keys - Mortgage Investors Group

High Balance and Super Conforming Loans

Properties that are located in counties with loan limits that exceed the base loan limit of $750,000 may be eligible for a High Balance/Super-Conforming loan. If this is true, the loan could be up to $1,149,825 (the highest conforming loan limit), subject to the county's actual limit, per the Federal Housing Finance Agency.

It is possible to avoid getting a jumbo mortgage by getting a first mortgage and second mortgage at the same time. If you choose to go this route, just make sure your combined rate is lower than the jumbo loan, and do not forget to consider closing costs for two loans.

See if you qualify for a jumbo home loan for your next mortgage - Mortgage Investors Group

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