What is a jumbo loan?

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A jumbo loan is a mortgage with a loan amount that is higher than the conventional loan limits set by the Federal Housing Finance Agency.

In 2020, the conforming loan limit is $510,400 in most areas and $765,600 in high-cost areas. Jumbo loans are a good match for applicants that need a bigger loan than the local conventional limits but are unable to make a larger down payment. This is the case for many people looking at expensive properties in expensive neighborhoods.

Because the applicant is applying for a bigger loan amount with a jumbo loan, the qualification requirements are more stringent than for conventional mortgages.

Stellar credit and large cash reserves are good starting points for applicants looking for a jumbo loan. Lenders typically look for a credit score of at least 700, and the ability for the applicant to make a down payment of 20% of the purchase price. Furthermore, a total debt-to-income ratio should not exceed 43% of the applicant’s gross income.

If you already have a jumbo loan, refinancing your mortgage has almost certainly crossed your mind.

Rates for conventional mortgages have been at historic lows for practically the entire year, and we expect them to stay at these levels in the upcoming months. There is minimal demand for jumbo loans in the secondary markets; therefore, interest rates tend to be higher than conventional mortgages.

Rates can vary dramatically – click here to see our rates.

A jumbo loan can be the solution you have been looking for to afford your dream home. If you’re ready to inquire, Lyons Mortgage would love to talk over your options in more detail. Speak with one of our Business Development Managers today: 1 (800)-448-8101

For all inquiries, you can always email us at contact@elyons.com


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