Jumbo Loan
A mortgage that exceeds the conforming loan limits set by government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac. These loans typically have higher interest rates and require a higher credit score and larger down payment than conforming loans.
What Is Jumbo Loan?
Jumbo loans are mortgage loans that exceed the conforming loan limits set by Fannie Mae and Freddie Mac (the two government-sponsored enterprises that buy and securitize mortgages). These limits vary by location and are typically higher in areas with higher housing prices. Jumbo loans are generally used to finance higher-priced homes or luxury properties. They usually require a higher down payment (10% or more) and have stricter credit and income requirements compared to conventional loans. Jumbo loans also tend to have higher interest rates. If you are looking to purchase a high-priced home or a property that exceeds the conforming loan limits in your area, a jumbo loan may be the right choice for you.
- Higher loan amount than traditional mortgage
- Higher loan-to-value ratio
- Lower interest rate
- More flexible credit requirements
- Homebuyers with high income and strong credit
- Borrowers looking to purchase high-priced homes
- Borrowers who cannot use a conventional mortgage for their financing
- Have a credit score of 700 or higher
- Have a debt-to-income ratio of 45% or lower
- Have a down payment of at least 10%
- Have a stable employment history
- Have a solid financial history, including no bankruptcies or foreclosures in the past 7 years
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