Jumbo Loans

They’re big and bold!

Maybe you’ve heard of jumbo loans, and have asked yourself, does that mean it’s just a very large home mortgage?  Pretty much! But who defines a jumbo loan, what loan amount is considered a jumbo loan, who might want one of these bad boys, and will you ever need one?

So what’s a jumbo loan?

Well to start, let’s define what is not a jumbo loan, aka conforming loans.

Conforming loans are mortgages that fall within the loan amount limits established by the Federal Housing Finance Agency (FHFA) each year. Currently, conforming loan amounts range up to $417,000 for single family residences, which brings us to the high-balance conforming loan (still not a jumbo loan).

A high-balance conforming loan is one that exceeds the conforming loan limits of $548,250, but does not exceed the loan limit for the high-cost area in which the property is located. These typically range up to $$822,375 – a few examples of “high-cost” areas include Los Angeles, New York or San Francisco.

So that means a jumbo loan is a mortgage in which the loan amount exceeds the conforming and high-balance conforming loan limits. So yes, they are BIG loans.

Who wants a jumbo loan?

Jumbo loans are available for:

  • primary residences
  • second homes
  • vacation homes
  • investment properties

So, if you have an expensive home you’d like to buy, the Jumbo loan may be right up your alley. There are options for fixed-rate mortgages as well as adjustable-rate mortgages.

Jumbo loans – for the risk takers

Heads up, jumbo loans are considered riskier loans. Why? Well, the large loan amounts tend to be for more high-end luxury homes that can take longer to sell in a short time frame and are more prone to valuation shifts during market changes. The result? Mortgage interest rates are typically higher than with other mortgage options, require a higher down payment, and must go through a more stringent loan process.

BUT, fortunately, all you need to do is give us a call and we’ll start digging in to see if you need a jumbo loan, and which one of our jumbo programs may be ideal for your home financing situation. And, jumbo loans definitely aren’t new to us, so we can help you to navigate the entire process!