HOW DO JUMBO LOANS WORK?
Think Bigger in Homeownership
A jumbo loan mortgage is one whose loan amount is higher than the loan limits set by the FHFA.
We’re talking homes worth $800,000, $900,000 or even higher price tag in many cases.
These loans typically come with a higher interest rate, stricter underwriting rules (including a higher credit score requirement) and require a larger down payment than your everyday home loan.
Higher purchase limits allow borrowers to purchase more home
Convenience of one loan for the entire loan amount, even on larger, more expensive properties
Available for primary residences, second homes or rental properties
Available in the form of a fixed-rate mortgage or an adjustable-rate mortgage (ARM)
Available in the form of VA loans, Conventional, and even renovation loans
FAQs About Jumbo Loans
How big is a typical jumbo mortgage down payment?
That depends on several factors, including the purpose of the property being financed with the jumbo loan. At Fairway, our core jumbo mortgage program allows for down payments as low as 10% for the purchase of a primary residence, whereas a typical 30-year, fixed-rate Conventional conforming loan allows for a down payment as low as 3%.
But these requirements sometimes shift due to the cyclical nature of the real estate and mortgage markets, and your Fairway mortgage advisor may have access to other jumbo loans programs, so be sure to ask about all your jumbo loan mortgage options as you consult with your Fairway mortgage advisor!
What is a super-jumbo mortgage?
Well, it’s not a jumbo loan that was born on the planet Krypton. A super-jumbo home loan is a home loan where the purchase price not only exceeds the FHFA’s conforming limits, but also exceeds the FHFA’s jumbo limits. Again, these limits are set and reviewed by the government each year.
If you’re having this conversation with your Fairway mortgage advisor, we’re talking homes that are over $1,000,000 and potentially much higher, especially in areas where real estate costs are generally more expensive.
What is a jumbo reverse mortgage?
Well, a reverse mortgage is a type of home loan reserved for borrowers over the age of 62 who either own their home outright or have significant equity in their home, which can be used to turn a portion of that equity into cash for expenses related to retirement. With that in mind, a jumbo reverse is just a reverse mortgage for a home where the loan amount is higher than the FHFA’s current conforming loan limit. Basically, it is a reverse mortgage for a larger, more expensive home.