January 1, 0001
What is a jumbo mortgage?
Jumbo loans finance single-family homes that exceed maximum loan limits set by the Federal Finance Housing Agency (FHFA). These are also the maximum mortgage amounts that can be purchased or backed by Fannie Mae and Freddie Mac. For 2019, the organization set the jumbo loan limit for most of the country at $484,350. For 2020, please see our 2020 Conforming Loan Limits blog post.
Is a jumbo loan a bad idea?
Jumbo loans aren’t bad — you might even get a better interest rate.
What is the benefit of a jumbo loan?
The main benefit for borrowers is that a jumbo mortgage allows them to go outside of Fannie and Freddie limitations. You can still get a competitive interest rate and finance the home of your choice without being restricted by the dollar limit on conforming mortgages.
What credit score is needed for a jumbo mortgage?
Credit score requirements are higher for a jumbo loan. Some conforming mortgage programs are available to applicants with a credit score as low as 500, but for a standard jumbo loan, you’ll usually need a credit score of at least 680.
Are jumbo mortgage rates higher?
Not always - If you have good credit, 10% or more down payment and 6+ months of cash reserves the rates are typically the same or slightly better on a jumbo loan (when working directly with a bank lender, like us. Request a Loan Officer).
Are jumbo mortgages always 30-year fixed?
No, they can also be termed at 15-year.
Can you put 5% down on a jumbo loan?
Yes, jumbos can fund up to a 95% Loan-to-Value ratio. Though the rate will be higher. Generally, jumbo loans require much larger down payments (10-20% or more) than conforming loan amounts because the loan amounts are larger and may put more risk on the lender.
Why are jumbo loan rates lower than conventional?
The primary reason is the higher credit standard of jumbo loans. Lenders tend to charge premiums for higher-risk mortgages and lower rates for lower-risk loans.
Do jumbo mortgages require PMI?
Often, you will NOT have to pay PMI on Jumbo loans, as they usually require a higher down payment. However, since the down payment requirement will vary by lender, it is possible that your lender will require PMI in exchange for a lower down payment.
Am I restricted to only purchase a primary residence?
A jumbo mortgage may allow borrowers to purchase second homes and investment properties.
Can you refinance a jumbo loan?
Absolutely. For more detail see our blog post about refinancing your jumbo loan.
Is there a difference between jumbo loan and jumbo mortgage
Absolutely not. They are exactly the same, the terms are used interchangeably.
In case you haven’t found the answer for your question please feel free to contact us, we will be happy to help you.