A jumbo loan (or non-conforming mortgage) allows you to purchase more expensive homes with a loan amount above the conforming limit set by the Federal Housing Finance Agency. In most areas of the country, the conventional conforming loan limit is $510,400; however, the limit is $765,600 in higher cost areas.
If you have a low debt-to-income (DTI) ratio and a higher credit score, but you don’t have enough funds to bring the loan amount under the conforming limit, a jumbo loan might be the right option for you.
Jumbo Loan Benefits
- Allows for financing a home over the maximum loan amount established by the Federal Housing Finance Agency
- Convenience of one loan for the entire loan amount
- They can be used for a primary residence, second home or investment property
- Fixed-rate or adjustable-rate mortgages (ARM)