What is a Jumbo Loan?
Jumbo vs. Conforming Loan: What’s the Difference?
A jumbo loan is a loan that is larger in size compared to a conforming loan, and inherently, is riskier to mortgage companies. Jumbo loans often require a higher down payment and a higher credit score than conforming loans. A conforming loan follows the guidelines set by Fannie Mae and Freddie Mac.
Jumbo Mortgage Limit for 2020
The conforming and jumbo mortgage limit may vary by state and county. As of January 1, 2020, jumbo loans have a loan amount greater than $510,400 in most counties. In high-cost areas, jumbo loans have a loan amount greater than $765,600. Contact us to learn more about jumbo mortgage limits in your area. Click here to learn more about conforming loan and high-balance loan limits.
Pros of Jumbo Loans
- Not restricted by limitations of Fannie Mae/Freddie Mac guidelines
- Larger mortgage for a higher priced property
- Interest rates for jumbo loans may be potentially lower than standard conforming loans
- Jumbo loans, unlike conforming loans, typically do not require private mortgage insurance at any level.
Cons of Jumbo Loans
- Usually more difficult to qualify for – Jumbo loans have an increased risk associated with them, so jumbo mortgage companies have stricter guidelines when qualifying applicants. To obtain a jumbo loan, you will often need a higher credit score than usual, a lower DTI and higher than usual reserves and assets.
- The property you are buying may require a second appraisal, which may cost you a small fee
- Potentially higher down payment
Interest Rates for Jumbo Loans
Interest rates for jumbo loans may be potentially lower than standard conforming loans. GuardHill has a network of over 50 investors and lenders, which allows us to match your financial profile with the lowest possible interest rates for jumbo loans.
One of the Best Jumbo Mortgage Companies Since 1992
Found your ultimate dream home? We have specialized in financing jumbo loans since 1992, and we work diligently to offer our clients the best interest rates for jumbo loans that match their financial needs. We’re here to help you understand the jumbo loan process and to make it a painless and seamless experience!