Jumbo Loans

Jumbo Loans

A jumbo loan or non-conforming loan, is a mortgage to finance properties when they are too expensive for a traditional conforming loan. For most states, the highest loan amount is $510,400 as set by the Federal Housing Finance Agency (FHFA). When you exceed this amount, that’s when it becomes a jumbo loan. 

Something to keep in mind when considering this type of loan is that they are riskier because they can’t be guaranteed by Frannie Mae and Freddie Mac. Because of this, borrowing rates are usually higher. They are typically available on a fixed or an adjustable interest rate and they come with varied terms. 

Example of a Jumbo Loan

For example, your loan is $908,000 in Los Angeles if you put 20 percent down. This keeps the loan amount just below the limit for that county.

Who benefits from a Jumbo Loan?

Higher credit score applicants – Jumbo loans because of the risk, generally require a higher FICO credit score than conforming loans. Usually this is a score of 700 or slightly higher. So those who have excellent credit, may be great candidates for a jumbo loan.

More upfront cash – Unlike more traditional loans, jumbo loans require more cash down. This is usually at least 20 percent down. For those who have the immediate cash on hand, jumbo loans work well.

Those seeking flexibility – Because jumbo loans come in different amounts, this provides people more flexible options. For example, borrowers can get a 30-year fixed rate jumbo loan or an adjustable rate mortgage.

We offer many types of loan programs from FHA Loans, Fixed Rate Loans, ARM loans and VA Loans.

To learn about all of our mortgage loan programs, click here.

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