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.