Jumbo Mortgage Basics

What are Jumbo Loans?

Jumbo loans are Conventional loans that are non-conforming. They exceed the regional loan limits set by the insuring bodies for Conventional loans, Fannie Mae and Freddie Mac. In most areas, loans larger than $417,000 will be considered Jumbo, unless the are has higher limits because the real estate is consistently higher cost. High-cost county loan limits vary, but any loan exceeding those limits is a Jumbo loan. 

Jumbo Mortgage Requirements

Because Jumbo loans are so large, they are often accompanied by strict income, credit, down payment, and debt standards. These standards will vary from lender to lender and become more stringent with greater loan amounts. 

  • Down Payment: 20% or greater, but may vary depending on assets.
  • Credit Score: 620 or greater.
  • Debt-to-Income Ratio (DTI): 45% or lower, but flexible as many Jumbo borrowers may have high DTI but considerable assets.
  • Loan-to-Value (LTV): 80% or lower, but may vary.
  • Loan Limit (max allowable loan amount): Varies by county.
  • Complete documentation of employment history, income, and assets.

Jumbo loans do not require mortgage insurance because their down payment, income, and asset minimums are so high.