A jumbo loan is a mortgage loan that exceeds the conforming loan limits for Fannie Mae and Freddie Mac. Conforming limits are the maximum dollar amounts these agencies are able to guarantee. Loans that meet these requirements are known as conforming loans. 

But sometimes, you need a bigger loan than Fannie or Freddie can give you. A jumbo-sized loan, if you will. And that’s something our team can help you out with. 

Whether you need a jumbo loan or not depends on where the property is located. Conforming limits vary by state and county, and they change every year. To determine whether you’ll need a jumbo loan for your intended purchase, speak with one of our team members. 

Can I qualify for a jumbo loan?

Qualifying for a jumbo loan is a more stringent process than qualifying for a conventional loan because there’s more risk involved. It’s a larger loan, and since it’s not coming from one of the government-backed enterprises, it’s a riskier undertaking for the lender. Generally, jumbo loan applicants need the following in order to qualify:

• A credit score of 700 or higher
• A debt-to-income ratio below 45% (ideally, somewhere around 36% or lower)
• Two years’ proof of income and proof of sufficient liquid assets to cover about six months of mortgage payments
  
  

Keep in mind, every loan, every lender, and every borrower is unique. So you might be able to qualify for a jumbo loan if you don’t meet these requirements—and meeting these requirements doesn’t guarantee you’ll qualify for a jumbo loan. 

With a jumbo loan, expect the lender to manually underwrite it. That means it will take a bit longer to review (and approve) than an application aided by an underwriting program would take.  

Usually, the bigger the loan, the stricter the qualification requirements. For example, you might need at least a 700 credit score to qualify for a $1 million loan, but need a credit score of 740 for a $2 million loan. 

What about PMI?

In many cases, MI is required for jumbo loans with a loan-to-value of 80% or higher.  

Interest rates for Jumbo Loans

A jumbo loan doesn’t automatically mean you’ll be paying a jumbo interest rate. Interest rates for jumbo loans can be similar to interest rates for conforming loans, depending on the factors at play. 

Because every loan is unique to its borrower and purchase, the best way for you to determine what you qualify for and the best loan product for your purchase is to schedule your free personalized rate quote from our team. Our jumbo loan offerings come through were other companies’ offerings fall short. With common sense underwriting and multiple buyer outlets, Aceland Mortgage provides options that are often out of reach for many borrowers. By doing this, we’re ensuring that we provide the best home financing options available to you. With more than 15 years of experience under our belts, you can rest assured you’re working with a team who can provide you with the best option for your unique financing needs.