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Jumbo

Jumbo

A jumbo loan is a great option for someone who is looking to finance a high-end property that exceeds the conforming loan limit and requires a loan amount larger than what is typically offered by government-sponsored enterprises. These loans are ideal for borrowers who have a strong financial profile, including a high credit score and a significant down payment, and who are looking for a loan that offers a competitive interest rate and flexible terms.

Why choose a jumbo loan

  • High loan amounts: Jumbo loans are designed for borrowers who need to finance an expensive property or a property in a high-cost area, with loan amounts that exceed the limit for conforming loans.

  • Flexible underwriting standards: Jumbo loans may offer more flexible underwriting standards compared to conventional loans, making them accessible to a wider range of borrowers.

  • Competitive interest rates: Jumbo loans can offer competitive interest rates, making them a cost-effective option for eligible borrowers.

  • No mortgage insurance: Jumbo loans do not require mortgage insurance, which can lower monthly payments and overall loan costs.

  • Tailored loan options: Jumbo loan borrowers often have access to tailored loan options, such as adjustable-rate or interest-only mortgages, which can meet their specific needs and financial goals.

How jumbo loans work

  • Exceed the conforming loan limits set by government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac.
  • Typically used to finance high-end properties, including luxury homes and high-priced real estate.
  • Loan amounts can range from several hundred thousand dollars to several million dollars.
  • Typically require a higher credit score and a larger down payment than conforming loans.
  • Often have stricter underwriting guidelines, including a more thorough review of the borrower’s financial situation.
  • Interest rates may be slightly higher than conforming loan rates due to the higher risk associated with these loans.
  • Can be fixed-rate or adjustable-rate mortgages (ARMs). Jumbo loans are not backed by GSEs, so they are usually offered by private lenders or banks.