Home buyers purchasing high-end homes or securing property in expensive real estate markets can benefit from jumbo home loans. Jumbo loans and super jumbo loans can offer high-end financing beyond what traditional loans provide, giving buyers a viable means to purchase more expensive property.
What is a Jumbo Loan?
A jumbo loan is a non-conforming home loan that is for a larger amount than the conforming loan-servicing limits set by Fannie Mae and Freddie Mac. The maximum size of a jumbo loan and qualifying guidelines can vary based on the location and the mortgage lender.
What is the Difference Between a Jumbo Loan and Conforming Loan?
The main difference between jumbo loans and conforming loans are the size, with jumbo loans featuring higher limits than conforming loans. Jumbo loans can also differ from conforming loans based on factors such as down payments, closing costs and fees, and interest rates, depending on the lender.
What Are Jumbo Loan Limits?
Jumbo loan limits typically depend on location, with more expensive markets typically having higher limits reflecting the higher property costs. The limit for conforming loans in most of the country is $647,200 in 2022. In high-cost markets such as New York, California, and Washington, D.C metro areas, conforming loan limits are higher at $970,800. For higher loan limits, a borrower may want to consider a jumbo loan.
Qualifying for a Jumbo Loan
Qualifications for jumbo loan rates can depend on location, but they are often more strict than conforming loans because they are larger and riskier for lenders. Typically, lenders will want borrowers to have a higher credit score, favorable debt-to-income ratio (DTI), cash reserves, and documentation proving financial stability. This information proves to lenders that borrowers will be able to afford the jumbo mortgage rates.
Some lenders have adjusted jumbo loan rates recently, making them harder to obtain, or decreased the range of jumbo loan offerings available to borrowers. At Thompson Kane & Company, we have options available that can provide great jumbo mortgage rates.
Benefits of a Jumbo Loan
One of the key benefits of a jumbo loan is that it allows homebuyers to borrow more than set limits on conforming home loans. With jumbo loans, borrowers can also get great rates on large home purchases, and they feature fixed or adjustable rates that offer maximum flexibility for financing larger loans.
Have questions about jumbo loan rates? Give us a call! One of our mortgage specialists would be happy to answer all of your questions regarding jumbo mortgage rates and qualifications.