What is a Jumbo Mortgage Loan?
Jumbo mortgage loans are designed for home purchases or refinances that exceed conventional loan limits. Because these loans are larger than what Fannie Mae or Freddie Mac will purchase, they require a higher level of financial strength—but in return, they offer competitive rates and flexible structures for qualified borrowers.
Jumbo loans are commonly used for luxury homes, high-cost markets, or properties with larger loan balances where standard financing simply won’t reach.
These loans are also referred to as non-conforming conventional mortgages; they generally have higher interest rates because, as the lender is not protected from loss if a borrower defaults, it is riskier for the lender. Jumbo mortgage loans typically have fixed or adjustable interest rate options.
Because of the larger loan size, lenders look for stronger overall profiles:
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Higher credit score requirements
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Documented income and assets
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Larger down payment in some cases (program-dependent)
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Cash reserves may be required after closing