Jumbo Mortgage FAQ's

Answers to frequently asked questions about the jumbo mortgage product.

A compilation of questions and answers related to the jumbo mortgage program. If you don't find the answer to your question here, just contact us and we'll be glad to help!

What is a jumbo mortgage loan?
A jumbo mortgage is a loan amount which exceeds conventional loan maximums for a first mortgage or a first mortgage and second mortgage TLTV (see conventional loan limits here). Conventional loan limits are set by Fannie and Freddie; all other loans are called non-conforming. This includes jumbo and super jumbo loan programs.

What is a super jumbo mortgage?
Like a jumbo loan, a super jumbo mortgage is a non-conforming loan amount which exceeds conventional established lending guidelines. Super jumbo mortgages are loans that exceed a lender's/bank's established caps for jumbo loans. These caps usually occur between $825K to $850K, depending upon the lender.

Why do you call it a jumbo mortgage?
Jumbo loans start at "$1" above the conventional cap and usually cap out at around 825K to 850K, dependent upon the lender. After the jumbo cap, you are now entering into super jumbo territory. Because of the size of the loan amounts, as they relate to the average/traditional amount financed for a home, they are called jumbo and super jumbo to reflect their size.

When do I need to consider a jumbo mortgage program?
A jumbo loan must be considered whenever the amount you are planning to finance exceeds the conventional mortgage loan caps.

Will I have to worry about PMI with a jumbo mortgage program?
Like conventional loans, jumbo and super jumbo loans come with risks to the lender. Actually, jumbo and super jumbo loans come with a higher risk to lenders than more traditional conventional products. PMI helps to defray the exposure a financial institution has in case of default by the borrower. So, yes, if your LTV is 80% or above, you will have to pay PMI. If considering a piggie back first and second mortgage, keep in mind that market conditions and TLTV will play a roll on the availability of this option.

Are there restrictions on what type of home I can finance using a jumbo mortgage?
There can be. We cannot finance mobile homes or land using a jumbo or super jumbo mortgage program. We can assist with single family homes, construction perms loans, and in most areas, financing on condos, townhomes, and PUD's. In some areas, we'll be able to help with multi-family properties as well.

What are the downpayment requirements of a jumbo mortgage?
Downpayment requirements can vary based upon secondary markets. Lenders count on investors in mortgage-backed securities to replenish funds. So, the downpayment requirements will vary according to market conditions. Typically, the downpayments are higher than more traditional conventional products just due to risk. Factors that can impact downpayment include the type of property, credit score, assets, income, and the particular state. Jumbo borrowers should expect to put down between 5% and 20%, depending upon the market. Super jumbo borrowers should be prepared to put down between 10% and 30%.

What loan terms are available to me when using a jumbo mortgage program?
Available loan terms for jumbo borrowers include traditional 30, 20, 15, and 10 year repayment terms.

How is my interest rate affected when I have to use a jumbo mortgage product?
Due to the higher default risks associated with jumbo and super jumbo mortgages, borrowers should be prepared and expect to pay between .25% and .5% in higher rates.

Are there interest only options available with a jumbo mortgage?
Yes, interest only payment periods are available in most states for jumbo and super jumbo loan products.

Can I finance a 2nd home or vacation home using a jumbo mortgage program?
Absolutely, you can finance any qualified second home property using a jumbo or super jumbo loan product -- provided you meet income, credit, debt ratio, and other lender requirements.

What are the credit qualifying requirements for a jumbo mortgage?
Typically, a borrower applying for a jumbo or super jumbo mortgage needs to have excellent credit. The minimum credit score requirement can vary based upon market conditions; however, a credit score above 680 is ideal. In some cases, you may be able to qualify with a lower score with sufficient income, debt, and lower LTVs.

Are there income restrictions with a jumbo mortgage program?
Yes, you must be able to show sufficient income to qualify for your proposed PITI mortgage payment. While higher PITI ratios can be achieved, credit will play a large role as will your back-end debt ratios.

Does being self-employed impact my ability to qualify for a jumbo mortgage?
Yes, being self-employed can affect your financing in how your adjusted gross income is calculated. While stated income products are available to a limited extent, they require very low LTVs and/or a large downpayment. In addition, your bank statements will have to reflect sufficient deposits to substantiate your stated income. This is bound to improve as the secondary mortgage market stabilizes.