Jumbo Loans
Navigating the housing market can be a big challenge. Purchasing a home is not cheap, and most buyers cannot afford to pay for properties with cash from their bank account. Instead, they must take out mortgage loans, such as FHA loans or jumbo loans, to afford their dream homes.
Meeting the qualification standards of a lender requires a strong financial background, and the requirements are stricter if you want to buy a high-value property. Lenders look at every aspect of your finances, including investment accounts, to ensure you can make the monthly payment.
When conforming loans are not enough to cover the cost of the home you want, your only option may be a jumbo mortgage. TrueWay Mortgage is an experienced lender that can help you find a financing solution for your high-value home. If you are pursuing jumbo loans, our expertise will be crucial in securing a mortgage loan that suits your needs.
Our professional agents can help you learn about the housing finance agency FHFA, organizations that may suit your situation, such as Veterans Affairs, whether you qualify for a fixed rate for investment properties and more. We’ll help determine if you need a jumbo loan for your next home loan.
What is a Jumbo Loan?
Conventional loans are the most popular type of mortgage product on the market and are more common than jumbo loans. This home loan offers flexibility for many borrowers, allowing them to access purchasing freedom if they can meet the eligibility criteria.
There are two types of conventional mortgages: conforming and non-conforming loans. The distinguishing factor between these two products is how they compare to the conforming loan limit set by Fannie Mae and Freddie Mac, two organizations the Federal Housing Finance Agency oversees.
Conforming loans are mortgages that are below these loan limits. In most counties in the United States, the conforming loan limit for a single-family home is $806,500. Hotter real estate markets will feature higher limits in most cases.
If the property you want exceeds this limit, you must use a jumbo loan to finance the purchase. This is common for luxury and high-value homes. These loans have many features of a standard mortgage, but the loan amount is higher to ensure you can purchase the property you want.
How Jumbo Loans Work
Jumbo loans work differently than standard loans because of stricter eligibility criteria and unique terms. For example, you may need a higher credit score and lower debt-to-income ratio to get a jumbo loan.
You could access flexible options for your loan, such as an adjustable or fixed rate. There is also a more complex approval process for jumbo loans because the risk to the lender is more significant due to a higher loan amount, so the underwriting stage may take longer.
TrueWay Mortgage will help simplify this process when you need a jumbo mortgage to finance your home purchase.
Key Features of Jumbo Loans
Jumbo loans offer borrowers more options when they seek expensive properties. You can obtain a much higher loan amount with this mortgage product. Interest rates for these mortgages can be competitive with the right lender, and you can choose from numerous loan terms to determine the length of the mortgage.
Higher Loan Limits
Homes are already expensive, and some are more valuable than others. Even in a less competitive market, some home prices will exceed the loan amount limits from Fannie Mae and Freddie Mac. With most types of loans, including conventional loans, you may not qualify for financing because of the high price of the home.
A jumbo mortgage, or jumbo loan, has a much higher borrowing limit so that you can secure a loan for a luxury home through jumbo lenders. TrueWay Mortgage can offer these loans with higher borrowing limits so you can purchase a high-end property.
Flexible Loan Terms
Every borrower has a unique financial situation. They also have different goals for their properties. Jumbo loans offer a range of term options to meet your budget needs. If you want to build equity quickly and reduce long-term interest, you can choose a shorter loan term of 15 or 20 years. You can extend the term to 30 years if you prefer lower monthly mortgage payments.
You can also choose between a fixed-rate mortgage or an adjustable-rate mortgage. Fixed-rate mortgages offer stable interest payments for the life of the loan, while adjustable-rate loans have the potential for saving money in the short term or if mortgage rates decrease.
Competitive Interest Rates
Despite the more significant borrowing amounts, jumbo mortgage rates can still be competitive. If you have a strong credit score and find the right lender, you can maintain manageable interest rates that reduce your overall costs. TrueWay Mortgage is committed to making your jumbo mortgage loan affordable with a competitive interest rate.
Benefits of Jumbo Loans
A jumbo mortgage loan offers significant benefits to eligible borrowers. First, you can finance a luxury home with this product, which may be impossible with all other mortgage programs. Second, private mortgage insurance premiums are often waived on jumbo loans, even with a smaller down payment. Lastly, jumbo loans are flexible regarding the properties you can buy, financing residential or commercial purchases.
Flexible Use of Funds
Many government-backed loans, such as Federal Housing Administration or United States Department of Agriculture loans, can only be used to purchase certain types of homes. A jumbo mortgage loan could be used to buy a primary residence, a second home, a vacation home, an investment property, or even a commercial asset.
No Private Mortgage Insurance (PMI)
When you put forth a smaller down payment on a loan, lenders often offset the risk by charging private mortgage insurance premiums. Jumbo lenders tend to waive mortgage insurance, even if you are not investing a sizable down payment. This will reduce your upfront expenses and monthly payment amount.
Financing for High-Value Properties
Due to the loan limits from Fannie Mae and Freddie Mac, financing expensive homes is extremely difficult if you do not have immense cash reserves. However, a jumbo mortgage gives you the resources to buy luxury homes or properties in high-cost areas.
While the qualification standards are higher, at least you have a path to property ownership for an expensive asset.
Eligibility Requirements for Jumbo Loans
Conforming mortgages have numerous eligibility criteria, and jumbo loans have similar standards. However, since more money is involved, these requirements are typically more challenging to meet.
The lender will assess your credit score, down payment, and income to determine your borrower credentials. TrueWay Mortgage can help you understand and meet these standards to qualify for a jumbo loan.
Credit Score Expectations
While you can generally obtain a conforming mortgage with a credit score of 620 or more, jumbo lenders often require scores of 700 or more. Since you are taking on more total debt, the lender needs assurance that you have a history of paying back other debts. Some lenders may demand higher scores depending on the loan amount you plan to borrow.
Down Payment Requirements
A loan amount for a typical jumbo mortgage is a lot of money for the lender to part with. As such, they will require a larger down payment than most traditional loans. The standard minimum down payment for a jumbo loan is 20%. There may be exceptions for a down payment as low as 10%. TrueWay Mortgage will support you as you strive to meet this requirement.
Income and Debt-to-Income Ratio
Lenders must verify that your income can cover the monthly payment of your mortgage. They will examine W-2s, income statements, bank statements, tax returns, and paychecks. The lender will also discuss your debt-to-income ratio (DTI), which compares monthly debt to monthly income. A maximum DTI ratio of 43% is standard.
Our lending team at TrueWay Mortgage will simplify this process so you understand the requirements.
Jumbo Loans for Different Property Types
Jumbo loans can be used to purchase many types of properties. Whether you are looking at a luxury single-family home, a multi-family unit, a vacation property, or a commercial building, a jumbo mortgage will provide enough funds for your purchase.
Comparing Jumbo Loans to Conforming Loans
Understanding the difference between jumbo loans and conforming loans is essential for your home search. The key differences are the loan amount limits, the interest rates, and qualification standards.
Loan Limit Differences
Loan limits determine the difference between a jumbo loan and a conforming mortgage. Fannie Mae and Freddie Mac set these limits each year. In 2025, the primary limit for a single-family property is $806,500. Any property that costs more than this amount would require a jumbo mortgage.
Eligibility and Rate Comparisons
Jumbo mortgage loans have stricter requirements. For example, the minimum credit score is usually 700 versus 620 for a conforming home loan. The maximum DTI is typically 43%, compared to 50% for conforming conventional mortgages. In most cases, you will also be stuck with a higher interest rate on a jumbo loan than a conforming loan.
Costs to Consider with Jumbo Loans
To qualify for a jumbo loan, you must be willing to pay more upfront. Larger down payments and higher closing costs will require significant cash reserves. Plus, many lenders require enough cash reserves to cover a year of monthly payments. You must also have a stronger credit history to qualify for most jumbo loans.
TrueWay Mortgage believes in being transparent about these expenses.
Tips for Securing a Jumbo Loan
If you want to increase your chances of securing a jumbo mortgage, you can try a few strategies. Improve your credit score before applying, save as much as possible for a more significant down payment, and choose a trusted lender like TrueWay Mortgage for expert assistance.
Why Choose TrueWay Mortgage for Jumbo Loans?
Have you considered jumbo loans for your next home purchase? TrueWay Mortgage offers competitive interest rates, expert guidance, and tailored solutions to help you secure a home loan that meets your needs. Whether you seek a primary residence or investment property, our jumbo loan program is customer-focused.
Contact Sam and Anisha Mauldin
TrueWay Mortgage
Start Your Jumbo Loan Journey Today
Our goal is to simplify the jumbo loan process. Check out our quick quote tool to view today’s mortgage rates for a jumbo home loan. If you are ready to discuss your financing needs for a high-value property, call us today at 404-962-0032 for a free consultation.