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Jumbo Loans: Why Credit Scores and Down Payments Matter More
When financing a higher-priced home, your down payment and credit score may have a greater impact on your mortgage rate than you expect. Learn why jumbo loans can require a different financing strategy than conforming loans—and why it's worth exploring your options before deciding how much cash to put down.
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Read the transcript
When you're financing a home with a jumbo mortgage, your down payment and credit score can make a much bigger difference in your interest rate than with a traditional mortgage.
Here's why.
With traditional mortgages, mortgage insurance or government backing helps protect investors against risk. But with jumbo loans, investors generally take on more of that risk themselves.
You might qualify for a jumbo loan with just 10% down, but putting more money down could get you a significantly better rate. In fact, I've arranged jumbo loans where the rate was actually lower than the rate available on a comparable conventional mortgage.
Jumbo rates can also be more sensitive to your credit score.
That's why you shouldn't automatically use the same financing strategy with a jumbo loan that you'd use with a traditional mortgage. It may be worth improving your credit score before applying, or putting more money down instead of keeping that money in savings. The key is to compare the options.
And remember - it's always okay to ask. We're here to help you get home.