Jumbo Loans

Jumbo loans typically are used to purchase or refinance higher priced homes. These loans are “non-confirming conventional”, as they exceed the established FHFA county loan limits. They represent an increased risk lenders because they are not purchased by Fannie Mae or Freddie Mac due to the high loan amount. This increased risk causes lenders to handle them differently, with each lender varying somewhat in their approach.

The first difference is that the lender will likely have more stringent qualification criteria, such as a larger down payment requirement, lower DTI threshold, or the stipulation of reserve assets. Lenders may also limit the use of gift funds, exclude first time homebuyers, or have expanded guidelines on employment history. The second difference is a financial consideration; Jumbo loans usually involve a higher interest rate or upfront cost basis than conforming conventional loans. We recommend that you consult with an expert loan officer to discuss which loan program is right for you.