What are Jumbo Loans?

Jumbo loans, otherwise referred to as a jumbo mortgage, is a home loan for an amount that is greater than the conforming loan limit set on mortgages that are eligible for purchase by Freddie Mac and Fannie Mae,, for the year 2022 it is any loan that is larger than $647,200.

What are Jumbo Loans?

Let's start by starting with what are jumbo loans, we need to start with conforming loans. Conforming loans have a lending limit. Every year, the FHFA will set the conforming loan limit for every county in the United States. However, there are cases whereby individuals want to buy properties and the amount available via a conforming loan is simply not going to be sufficient. This is when a jumbo loan is needed.

A mortgage that is for an amount that exceeds the local conforming limit is a jumbo mortgage and can go up to any amount. Your finances will be received more stringently than traditional mortgages and there are typically stricter credit requirements when going down this route due to more money at risk.

What are Jumbo Loans?

How do jumbo loans work?

As jumbo loans involve borrowing more money, it is not uncommon for the application process to be more stringent and rigorous, so do keep this in mind. You will typically need a larger down payment, greater cash flow, and a higher credit score. Additional assets can also be very beneficial. However, every lender is different and has different requirements, Mortgage Quote has jumbo mortgage loan programs that might meet your needs.

Sources

Jumbo Loans: When a Regular Mortgage Isn’t Enough

What Is a Jumbo Loan?