Are you looking to purchase a home that’s too expensive for a traditional mortgage? A jumbo loan might be right for you.
Why are there loan limits on standard mortgages? It all comes down to Fannie Mae and Freddie Mac. These agencies were established to help low-to-moderate income buyers purchase homes. To make sure the agency’s funds were being used for that purpose—not to help wealthy buyers—they established loan limits based on median home prices.
In most areas, any mortgage worth more than $484,350 counts as a jumbo loan. The limit varies based on county though, and some high-cost areas like New York City or Hawaii have a higher limit of $726,525.
Unsuprisingly, you must be in excellent financial standing to qualify for a jumbo loan. Usually a credit score over 700 is required, and you must show you have sufficient income via tax forms, bank account information, and pay stubs. A solid debt-to-income (DTI) ratio is also required, typically under 43%.
Even if your home doesn’t qualify for the maximum traditional loan, you can still get a great mortgage with competitive rates. If you’re shopping for luxury home, we can help. Contact us today to get pre-qualified and get started making your dream home a reality.