5-Point-5
5 Things to Know About Jumbo Loans
Financing a higher-priced home can come with different requirements, so understanding your options early can make the process much easier.
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When the home you want requires financing above conventional loan limits, a jumbo loan may come into play. Here are 5 things to know about jumbo loans.
1. They’re Designed for Larger Loan Amounts
Jumbo loans allow buyers to finance amounts above the conforming loan limits established for conventional mortgages.
2. Strong Credit Can Be More Important
Because lenders take on more risk with larger loan amounts, jumbo loans may have higher credit score requirements than other mortgage options.
3. Cash Reserves May Be Required
Some jumbo programs require borrowers to have additional funds remaining after closing, sometimes equal to several months of mortgage payments.
4. Income and Assets Get a Closer Look
Lenders may require more documentation to verify that your income and assets can comfortably support the larger mortgage.
5. Jumbo Options Can Vary
Jumbo loans aren't one-size-fits-all. Requirements, rates, and available options can vary considerably between lenders and loan programs.
Financing a higher-priced home can come with different requirements, so understanding your options early can make the process much easier.