Jumbo Loans: Unlocking Your Dream Home

Loan Program Summary & Highlights

Jumbo loans are specifically designed for homebuyers looking to purchase high-value properties that exceed the conforming loan limits set by Fannie Mae and Freddie Mac. These loans offer the flexibility and funding needed to secure luxury homes or properties in high-cost markets.

• Exceeds conforming loan limits: Typically over $726,200 (or $1,089,300 in high-cost areas).
• Flexible terms: Available with fixed or adjustable interest rates.
• No private mortgage insurance (PMI): Not required for most jumbo loans.
• Supports high-value homes: Perfect for luxury properties and high-cost markets.
• Competitive interest rates: Available for qualified borrowers with strong financial profiles.

What is a Jumbo Mortgage Loan?

A Jumbo loan is a non-conforming mortgage designed to finance homes that exceed the conforming loan limits established by the Federal Housing Finance Agency (FHFA). These loans are not eligible for purchase by Fannie Mae or Freddie Mac, requiring lenders to set their own terms and guidelines.

Jumbo loans cater to borrowers with higher incomes and strong credit profiles, offering the ability to purchase or refinance high-value properties. While they often come with stricter qualification requirements, jumbo loans provide the flexibility needed to secure financing for luxury homes or properties in competitive markets.

General Jumbo Loan Guidelines

• Loan amounts: Exceed conforming loan limits, starting at $726,200 in most areas.
• Down payment: Typically 10% to 20% is required.
• Credit score: Minimum score of 680 to 700 is generally required, though some lenders may require higher.
• Debt-to-income (DTI) ratio: Usually capped at 43% to 45%.
• Reserves: Lenders may require six months to a year of cash reserves.
• Available for primary residences, second homes, and investment properties.

Pros of Jumbo Loans

• Higher loan amounts: Provides the funding needed to purchase high-value properties.
• No PMI: Most jumbo loans do not require private mortgage insurance, even with a down payment under 20%.
• Flexible terms: Available with both fixed and adjustable-rate options.
• Supports diverse property types: Can be used for primary homes, vacation homes, and investment properties.
• Competitive rates for qualified borrowers: Borrowers with strong credit and financial stability may secure favorable rates.

Cons of Jumbo Loans

• Stricter qualification requirements: Higher credit scores and lower DTI ratios are often required.
• Higher down payment: Typically requires a significant down payment, ranging from 10% to 20%.
• Higher interest rates: Rates may be slightly higher than conforming loans, depending on the lender.
• Reserves required: Borrowers must have substantial savings to meet reserve requirements.
• Limited lender options: Fewer lenders offer jumbo loans compared to conforming loans.

Best Candidates for Jumbo Loans

• High-income earners: Ideal for those with stable, significant incomes and strong financial profiles.
• Buyers in high-cost areas: Suitable for individuals purchasing properties above conforming loan limits.
• Luxury homebuyers: Perfect for those investing in high-value or luxury homes.
• Borrowers with strong credit: Typically required to qualify for competitive rates.
• Second home or investment property buyers: Ideal for those purchasing vacation homes or rental properties.

At One Mortgage Company, we specialize in helping buyers secure the financing they need for luxury properties. Whether you’re purchasing your dream home or expanding your real estate portfolio, a Jumbo loan could be the right fit for you. Contact us today to learn more about Jumbo loans and how we can help you achieve your homeownership goals.