As the leading mortgage brokers in New York, the experts at MortgageDepot have experience with all kinds of loan programs. One of the most common types of non-conventional loans we help our clients acquire is called a Jumbo Loan, also known as a Jumbo Mortgage.
What Is a Jumbo Loan?
One explanation of a Jumbo Loan is that it’s a mortgage loan for an amount higher than the limit of what the Office of Federal Housing Enterprise Oversight (OFHEO) considers to be a conforming loan amount. What that means is that the federal government puts a price limit on how high of a mortgage Fannie Mae and Freddy Mac will purchase or guarantee. Any mortgage that exceeds that limit is considered to be Jumbo.
The limits for conforming loans are adjusted every year, and they aren’t the same for every real estate market. At the moment, the limit for a conforming mortgage on a single-family home in most markets is set at $548,250. In some high-value markets like Hawaii and Alaska, the limit can even be as high as $822,375.
In a market like New York, real estate prices can easily require mortgages that exceed even the high range of these limits. And even when prices are within these limits, many folks looking to buy property in New York do not have the type of financial profile that makes them good candidates for a high-balance conventional loan.
What’s the Difference Between a High-Balance Conventional Mortgage and a Jumbo Mortgage?
A high-balance conventional mortgage is a conventional mortgage for an amount of money that’s at the high range of the OFHEO conforming loan limits. Many borrowers who are considering acquiring a high-balance conventional mortgage may be able to do much better with a jumbo loan.
Jumbo loans are considered to be higher risk than high-balance conventional mortgages, and are scrutinized differently, and by different types of underwriters. Conventional high-balance mortgage underwriting standards can sometimes be stricter than jumbo mortgage underwriting standards, and can also carry higher interest rates and even require more of a down payment.
Who Should Consider Using a Jumbo Loan?
- Individuals looking to purchase luxury real estate.
- Individuals buying real estate that’s priced high enough that the mortgage will exceed the OFHEO conforming loan limit.
- Individuals with a high net worth and untraditional income.
- Individuals with enough liquid assets for a large down payment, who have a low debt-to-income (DTI) ratio and a high credit score.
- Individuals who are considering a high-balance conventional mortgage.
What Kind of Properties Can Jumbo Loans Be Used For?
- Primary Residences
- Second Homes
- Vacation Properties
- Investment Properties
- Single-Family Homes
- Multi-Family Homes
Here Are Some Key Highlights of Our Various Jumbo Loan Programs:
- None of our Jumbo Loan programs require PMI
- Some of our Jumbo Loan programs can be used after a bankruptcy, a foreclosure or a short sale, and with a shorter wait than with conventional loans.
- Some of our Jumbo Loans can be available for borrowers with FICO scores as low as 620.
- Some have limits as high as $2 Million.
- Some are available as interest only loans.
If you’re interested in a Jumbo Loan, or even if you’d just like more information about our Jumbo Loan programs, call us!
No matter what situation you’re in, MortgageDepot can find the right mortgage loan program to help you achieve your goals. Whether you’re looking to purchase a home or refinance an existing loan; whether you’ve experienced a bankruptcy or a foreclosure; whether you have a savings and credit history or not; we look forward to helping you make your real estate goals succeed.