What Is a Jumbo Loan, and Do I Need One?
- By Jim Blackburn
- on
- 100 first time home buyer FAQs
1. A Jumbo Loan Exceeds Conforming Loan Limits for High-Priced Homes
A jumbo loan is a mortgage that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac.
Conforming loans are those that meet the guidelines for government-backed financing. If you’re buying a property in an area where home prices are high, you might need a jumbo loan to cover the cost.
Jumbo loans are used for luxury or high-value properties—typically those above the conforming loan limit (which varies by location).
If you’re purchasing a high-priced home, a jumbo loan could be your ticket to getting the funds you need.
Calculate your Jumbo Purchase Loan Payment now to see how much home you can afford and what your monthly investment will look like.
2. Jumbo Loans Come With Stricter Requirements
Because jumbo loans are for larger amounts, they come with stricter approval standards than conforming loans:
You’ll need a higher credit score (usually 700 or above)
Expect larger down payments—often at least 20%
Be prepared for higher interest rates compared to conforming loans, although rates have been competitive in recent years
These more stringent requirements help lenders manage the higher risk associated with jumbo loans.
Whether you’re building from the ground up or buying an existing luxury property, understanding your financing options is crucial. Calculate your Jumbo New Construction Loan Payment now to explore costs for building your custom dream home.
3. You’ll Need a Jumbo Loan If You’re Buying a Luxury or High-Value Property
If you’re looking at a home that’s well above the local conforming loan limit, a jumbo loan will be necessary.
Jumbo loans are typically the go-to option for luxury homes, multi-million dollar properties, or homes in high-cost housing markets.
However, before jumping in, make sure you’re financially prepared for the extra scrutiny during the approval process.
Jumbo loans are powerful, but they require careful planning and a solid financial foundation.
Planning to purchase a high-end property that needs updates? Calculate your Jumbo Renovation Purchase Loan Payment now to see how you can finance both the purchase and renovations in one loan.
Considering a Jumbo Loan for Your New Home? Let’s Walk Through It Together
At Stairway Mortgage, we specialize in jumbo loans for high-value properties—helping you navigate the approval process with confidence.
At Stairway Mortgage, we help you navigate big purchases—so you can move into your dream home with confidence.
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