What is a jumbo loan?

What is a jumbo loan?

Have you ever wondered, “what is a jumbo loan?” Well, I have the answer for you.

A jumbo loan is a loan that exceeds the conforming loan limit.

What do you mean I don't qualify?

“Great, ” You say, “but what does that mean? How much is that?”

For 2019, the conforming loan limit for a one unit property in any county of the US is $484, 350. A loan amount higher than that figure would be considered a jumbo loan, also referred to as a non-conforming loan.

There are some high cost counties where a “high balance” or “super conforming” limit is established. This is done to bridge the gap that is created between the conforming and jumbo guidelines and requirements. You can take a look at some the limits for high balance loans in this article.

How is a jumbo loan different than a conforming or high balance loan?

Jumbo loans tend to have more restrictive requirements when it comes to minimum credit scores, down payment, debt to income ratios and cash reserves.

Many of the non conforming loans require that you have a credit score higher than 700, though some programs have an exception to that rule. They require a larger down payment, no zero down or 3% down options available. Jumbo loans will also have strict debt to income ratio requirements and require anywhere from 3-36 months of cash reserves.

Is buying a home out of your reach?

Despite the tougher requirements, jumbo loans are necessary in order to make it possible for buyers to finance more expensive homes. Without this type of loan buyers would need to put hundreds of thousands of dollars for a down payment

So, there you have it. A quick look at jumbo loans If you have any questions on this topic or any other mortgage-related topic, by all means reach out to me.
Send me an email
Or give me a call – (858) 3-LOANS-3
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