Jumbo Loans
Types of Loans
Repayment Types
A Jumbo Loan is a mortgage that exceeds the loan limits set by Fannie Mae and Freddie Mac, the government-sponsored enterprises that buy and sell mortgages from private lenders. In 2023, the loan limits are $726,200 for a single-family home in most U.S. counties (and $1,089,300 in high-cost areas).
Jumbo loans are typically more expensive than conforming loans. This is because they are considered to be riskier for lenders, as they are not backed by Fannie Mae or Freddie Mac. As a result, jumbo loans typically have higher interest rates and require larger down payments than conforming loans.
Here are some additional details about jumbo loans:
- Interest rates: Jumbo loans typically have higher interest rates than conforming loans. The interest rate you qualify for will depend on your credit score, debt-to-income ratio, and other factors.
- Down payment: Jumbo loans require a down payment of at least 20%. This is much higher than the 3.5% down payment that is typically required for conventional loans.
- Interest rates: Jumbo loans typically have higher interest rates than conforming loans. The interest rate you qualify for will depend on your credit score, debt-to-income ratio, and other factors.
- Interest rates: Jumbo loans typically have higher interest rates than conforming loans. The interest rate you qualify for will depend on your credit score, debt-to-income ratio, and other factors.
Things to consider before applying for a Conventional Loan
- It's important to note that these are just a few things to consider before getting a conventional loan. There are other factors that lenders may consider, so it's important to talk to a lender to see if you qualify.
- Your credit score: Conventional loans have stricter lending standards than government-backed loans, so you'll need a good credit score to qualify.
- Your down payment: Conventional loans typically require a down payment of at least 5%, but you may be able to get a loan with a lower down payment if you have good credit.
- Your debt-to-income ratio: Your debt-to-income ratio (DTI) is the amount of debt you have compared to your income. Lenders will look at your DTI to see if you can afford the monthly payments on a conventional loan.
- Your housing costs: Lenders will also look at your housing costs, which include your mortgage payment, property taxes, and insurance. Make sure you can afford these costs before you get a conventional loan.
- Your income: Lenders will want to see that you have a steady income that can support the monthly payments on a conventional loan.