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What is a Jumbo Loan?


A Jumbo Loan is a loan amount that exceeds the general standards for a conforming loan. The jumbo loan limit in most of the United States is $417,000 and roughly $625,500 in the higher-cost areas such as Los Angeles, San Francisco, and New York.


Why choose a Jumbo Loan?


If you are a borrower who needs a loan that exceeds the general regulations for a conforming loan (conventional) then a Jumbo Loan might be exactly what you’re looking for. Since Jumbo Loans are of higher value, they naturally have more rigid qualifications to meet making them more difficult to obtain.


An applicant needs a high income, quality documentation, low debt-to-income ratio, high credit score, and a relatively low down payment of approximately 10%. Although we do not require large down payments, we do recommend them considering a lower down payment can result in a higher interest rate. Interest rates on larger loans are always higher due to the larger amounts of money involved and because higher priced homes can take longer to sell if the lender has to foreclose on the property. To get the best interest rate possible, we always recommend a larger down payment of 20% to 30% to avoid a higher interest rate on these types of loans.