Jumbo loans are designed for loan amounts that exceed conforming loan limits. Conforming loan limits are determined by the government and imposed by Fannie Mae and Freddie Mac. That amount can depend on the county you live in across the country, but the average jumbo loan is designed for home mortgages that exceed $453,100. That amount may be larger if you live in an area with a higher cost of living (think New York, San Francisco).
Jumbo Loan Requirements
Typically the financial requirements for a jumbo loan are more stringent than a conventional home loan. In addition, the home you are intending to buy may require two home appraisals versus one. Below are some of the financial requirements, these should be seen as general guidelines and may vary from lender to lender:
- Higher down payments (anywhere from 15 to 30%)
- Credit score of 680 or higher
- A debt-to-income ratio of 43% or less
- 6-12 months of reserves in the bank
Since the amount you are borrowing on a jumbo loan exceeds conventional amounts, lenders will want to see that you are capable of paying the larger mortgage payments that will come with a jumbo loan.
When borrowing larger amounts make sure that you consider the more expensive closing costs. Additional home appraisals and higher down payments are all upfront costs, you will need to be able to pay those expenses out of pocket.
Why Choose a Jumbo Loan?
Jumbo loans are the ideal solution for more expensive loans. If you need to upgrade to a larger or more expensive home, a jumbo loan may be the right option for you. Those with a higher income and good credit can finance more of the value of their home without breaking the bank in down payments and closing costs.
As with conventional loans, it is important to make sure that you are financially prepared to take on a larger mortgage payment. Use our mortgage calculator and figure out what a jumbo loan may cost you today!
Chris Doering Mortgage can sit down with you and make sure that a jumbo loan is the best option for your home buying experience.
How to Apply in Florida
If you think you may be eligible for a jumbo loan, call Chris Doering Mortgage, located in Gainesville, Florida. We are home buying experts and can help you every step of the way when purchasing a new home.
To learn more about jumbo loans and how you can apply, contact us today!