Question 1

What is a jumbo loan?

Accepted Answer

A jumbo loan is a mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency. Because these loans can't be sold to Fannie Mae or Freddie Mac, lenders assume more risk and apply stricter underwriting standards.

Question 2

What down payment do I need for a jumbo loan?

Accepted Answer

Most jumbo programs require 10% to 20% down, though some allow as little as 5% for well-qualified borrowers. Larger down payments typically unlock better rates and reserve requirements.

Question 3

What credit score is required for a jumbo loan?

Accepted Answer

Most lenders look for a credit score of 700 or higher, with the best pricing reserved for scores of 740+. Debt-to-income ratios are usually capped at 43% and cash reserves of 6-12 months of payments are commonly required.

Question 4

Are jumbo loan rates higher than conforming rates?

Accepted Answer

Not always. In recent years jumbo rates have often been competitive with or even lower than conforming rates because jumbo borrowers tend to have stronger credit profiles and larger down payments.

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