Jumbo Loans are mortgage loans that are not insured by the government (like FHA, VA, USDA Loans), but they typically meet the lending guidelines that have been set by institutional investors. Typically, jumbo loans have better rates, terms and/or lower fees than other types of loans. However, jumbo loans typically require a borrower to have excellent credit, reasonable amounts of monthly debt obligations, a down payment of 20% and reliable monthly income. Jumbo loans are ideal for borrowers with excellent credit and at least a 25% down payment.
Most Common Types of Jumbo Loans
Fixed Rate Mortgages: Your rate and payment never change.
30 Year Fixed Loan Benefits: Lowest fixed monthly payments
15 Year Fixed Loan Benefits: Lower rate than the 30 Year Fixed; Pay less interest and pay your home off more quickly.
Adjustable Rate Mortgages: After the initial period your interest rate can change once a year.
3/1 ARM Fixed Rate for 3 Years, Adjustable Rate for the remaining 27 years
5/1 ARM Fixed Rate for 5 Years, Adjustable Rate for the remaining 25 years
7/1 ARM Fixed Rate for 7 Years, Adjustable Rate for the remaining 23 years0
What types of property are eligible?
Most jumbo loan programs allow you to purchase single-family homes, warrantable condos, planned unit developments, and 1-4 family residences. A jumbo loan can also be used to finance a primary residence, second home and investment property.
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