Jumbo Loans
What is a jumbo mortgage loan?
Have your eye on the home of your dreams? A jumbo loan provides you with up to $5 million in financing to purchase a luxury or high-cost home or investment property. With a jumbo mortgage, your dream becomes real life!
- Down payments as low as 10% with no mortgage insurance
- Fixed-rate mortgages and adjustable-rate mortgages (ARMs) available
- Terms ranging from 10 to 30 years
- Available for primary residences, second homes, and investment properties
What are the loan limits for jumbo loans?
A jumbo loan limit of up to $5 million is higher than conventional loan limits.* Jumbos cannot be purchased, guaranteed, or securitized by Fannie Mae or Freddie Mac.
Jumbo fixed-rate mortgages
If you’re planning to live in your home for the long term, a jumbo fixed-rate mortgage may be a favorable option. With a jumbo fixed-rate mortgage, your mortgage interest rate and principal and interest payments will be consistent, from the day you close to the day you pay off your loan. Your interest rate won’t increase alongside market rates, and if rates decrease you could benefit from refinancing.
Pros
- Your interest rate is set and won’t change
- Your monthly principal and interest payment won’t change, eliminating any surprises
- You’ll be protected from rate increases
- You may be able to refinance if market rates decrease
Cons
- Your initial interest rate may be higher than an adjustable-rate mortgage (ARM)
- Your mortgage payments may be higher than initial ARM payments
- Your interest rate won’t automatically lower if market rates decrease
Jumbo adjustable-rate mortgages (ARMs)
If this isn’t going to be your forever home, a jumbo ARM may be more favorable. A jumbo ARM can save you money on your loan, but there is a risk that market rates may increase during an adjustment period and make your monthly payments higher. However, there are caps set on ARMs.
- Initial adjustment cap – How much the interest rate can increase the first time it adjusts after the fixed-rate period expires.
- Subsequent adjustment cap – How much the interest rate can increase in the adjustment periods that follow.
- Lifetime adjustment cap – How much the interest rate can increase in total, over the life of the loan.
Pros
- Your initial interest rate may be lower than a fixed-rate mortgage
- Your rate may decrease with market rates
- Your monthly payment may decrease
- There are caps set on rate increases and payment limits
Cons
- Your rate may increase with market rates
- Your monthly payment may increase
Jumbo mortgage loan requirements & eligibility
For a jumbo loan, borrowers must meet more rigorous credit requirements than for a conventional loan. Approval requires an excellent credit score and a very low debt-to-income (DTI) ratio.
If a jumbo loan seems right for your lifestyle, we’re ready to finance it with expertise, personal guidance, and concierge service from our first conversation to closing.
*Generally, $766,550 for a one-unit property, although there are higher limits in certain counties. Call for details.
