A jumbo loan is a type of mortgage that exceeds the conforming loan limits as set by Fannie Mae and Freddie Mac.

You usually need a jumbo loan if you want to purchase a higher-property property.
For example, you can get up to $3 million depending on the lender.
 
Jumbo loan interest rates are usually similar to conforming interest rates, but they’re more difficult to qualify for than other types of loans. You will need to have a higher credit score and a lower DTI to qualify for a jumbo loan.

 

Pros Of Jumbo Loans:

• Their interest rates are similar to conforming loan interest rates.
• You can borrow more for a more expensive home.

 

Cons Of Jumbo Loans:

• It’s difficult to qualify for, typically requiring a credit score of 700 or higher, significant assets and a low DTI ratio.
• You will need a large down payment, typically between 10 – 20%.

 

Home Buyers Who May Benefit:

• Those who need a loan larger than conforming loan for a higher-priced home, have a good credit score and low DTI.