Loan
Jumbo Loans
When housing inventory is low, the market is competitive, and you’re looking to live in a high-priced area, jumbo loans can help you secure a home that costs more than the conventional loan limits.
Benefits of a jumbo loan
- More purchasing power than a conventional, conforming loan can offer
- Flexible down payment options—most jumbo loan lenders require between 5% and 20% down
- Many jumbo loan programs offer competitive rates! Some are even lower than conforming loan rates
What is a jumbo loan?
When it comes to jumbo loans, the name hints at the function. A type of non-conforming loan, jumbos can buy you a home that exceeds the funding limit on conventional conforming loans. In other words, they’re big loans used to finance expensive properties.
Typically used to finance luxury properties and homes in highly competitive local real estate markets, jumbo mortgages come with unique underwriting requirements and tax implications. The value of jumbo mortgages varies from state to state and sometimes from one county to the next. The FHFA sets the conforming loan limit size (AKA the breaking point between conforming and non-conforming loans) for different areas annually.
Jumbo Loans
When housing inventory is low, the market is competitive, and you’re looking to live in a high-priced area, jumbo loans can help you secure a home that costs more than the conventional loan limits.
What is a jumbo loan?
When it comes to jumbo loans, the name hints at the function. A type of non-conforming loan, jumbos can buy you a home that exceeds the funding limit on conventional conforming loans. In other words, they’re big loans used to finance expensive properties.
Typically used to finance luxury properties and homes in highly competitive local real estate markets, jumbo mortgages come with unique underwriting requirements and tax implications. The value of jumbo mortgages varies from state to state and sometimes from one county to the next. The FHFA sets the conforming loan limit size (AKA the breaking point between conforming and non-conforming loans) for different areas annually.
Benefits of a jumbo loan
- More purchasing power than a conventional, conforming loan can offer
- Flexible down payment options—most jumbo loan lenders require between 5% and 20% down
- Many jumbo loan programs offer competitive rates! Some are even lower than conforming loan rates
Is a jumbo loan right for you?
If you’ve got your sights set on a home that costs over half a million dollars, you’re likely going to need to opt for a jumbo loan. In the current housing market—especially here in Bend, Oregon, one of the nation’s fastest-growing cities—many people find that even modest homes require a jumbo mortgage.
Other things to think about when considering a jumbo loan:
- Jumbo loans have stricter underwriting criteria since the loans are larger and riskier for lenders. You should be prepared to hand over your complete tax returns, W-2s, and 1099s when applying, in addition to bank statements and information about investment accounts.
- Lenders may require your FICO score to be higher than 680 and sometimes as high as 720 to qualify for a jumbo loan.
- It’s not uncommon for lenders to ask jumbo loan borrowers to show they have enough cash reserves to cover one year of mortgage payments.
- Most jumbo loans have much higher closing costs than conventional home loans. On a $500,000 mortgage, you can expect to pay $10,000 – $25,000 in cash at the closing table.
Lending That Works For You
When it comes right down to it, jumbo loans create more options for potential homebuyers. When determining whether or not a jumbo loan is your best option, we’ll consider your entire financial situation. That includes learning about your goals, timeline, dream neighborhood, and credit history. Then, we’ll work with you to get you moved into your dream home as soon as possible.
