Financing for Homes Above Conforming Loan Limits
A jumbo loan is a conventional mortgage used when the required loan amount exceeds the conforming loan limit that applies to the property’s location and number of residential units.
These loans can help qualified borrowers finance higher-value homes that may not fit within standard conforming loan limits. Depending on the available program, jumbo financing may be considered for eligible home purchases or refinance transactions.
Mortgage Pros Funding can help you understand how the applicable loan limit affects your financing options and identify programs that may fit your property and financial goals.
What Makes a Mortgage a Jumbo Loan?
The Federal Housing Finance Agency establishes conforming loan limits each year for mortgages eligible for purchase by Fannie Mae and Freddie Mac. The applicable limit may vary according to the county, property type, and number of residential units.
When a mortgage amount exceeds the applicable local limit, it is generally considered a jumbo or non-conforming loan. Because these mortgages are not eligible for purchase by Fannie Mae or Freddie Mac, lenders establish their own program and underwriting requirements.
View Current FHFA Conforming Loan Limits
Fixed- and Adjustable-Rate Options
Jumbo mortgages may be available with fixed or adjustable interest-rate structures, depending on the lender and program.
- A fixed-rate mortgage maintains the same interest rate for the agreed loan term
- An adjustable-rate mortgage generally begins with an initial fixed period before the rate may change
- Available loan terms and payment structures vary by program
Your loan professional can explain the available choices, how the payment may behave over time, and which structure may be appropriate for your financing goals.
Preparing for Jumbo Loan Underwriting
Because jumbo loans involve larger mortgage amounts, the financial review may be more detailed than it is for a conforming mortgage.
The lender may closely evaluate:
- Credit history and overall credit profile
- Employment and documentable income
- Existing monthly debt obligations
- Available assets and financial reserves
- Down payment or existing property equity
- Loan-to-value and debt-to-income ratios
- The property’s condition and appraised value
Exact requirements depend on the lender, requested loan amount, property, occupancy, and selected loan program. A loan professional can review these considerations with you before you complete the application.
Property Valuation and Appraisal
A professional appraisal is generally required to support the property’s value and help the lender evaluate the proposed financing.
Higher-value and distinctive properties may require additional valuation review because comparable sales can be more limited. Depending on the property and loan program, additional appraisal documentation or another valuation may be required.
What to Expect During the Process
The jumbo loan process generally includes:
- Reviewing your property and financing goals
- Confirming the applicable conforming loan limit
- Discussing available jumbo loan options
- Completing the mortgage application
- Providing income, employment, asset, and debt documentation
- Completing the required property appraisal
- Undergoing lender underwriting and financial review
- Satisfying applicable approval conditions
- Preparing for final approval and closing
Guidance for Higher-Value Home Financing
Mortgage Pros Funding will help you understand the available jumbo financing options, prepare the required documentation, and navigate the application and underwriting process.
Our team provides personalized assistance from the initial financial review through final approval and closing.