What is a Jumbo Mortgage?

What is a jumbo mortgage?

If you are looking to buy a higher priced home or you own a higher priced home, then a jumbo loan might be something that you may need to take on or want to consider as a financing option.

First of all, what is a jumbo mortgage? A jumbo mortgage is anything that’s over the conforming loan limit in your county. The conforming loan limit is the limit that Fannie Mae and Freddie Mac place on the maximum that they’ll allow you to borrow under their programs, under the government backed conforming programs is what we call them. Conforming home loans- This loan limit nationwide is $548,250.

So above that loan limit is considered a jumbo loan. So it’s not the home price – It’s the loan amount!

In the Denver Metro area as of 2021, the conforming loan limit is $596, 850. The reason why it’s higher is these loan limits are based on the median home price for the area.

This is because in Denver home prices are more expensive than the national average. Now this limit is adjusted every year, according to what home prices are doing. So it’s almost certain to go up here when it adjusts. This usually happens around early December when they announced the new conforming loan limit.

So coming up here in a couple of months, we’re going to get some news on what those new limits will be. Almost certainly higher, but once it goes up, then that sets the new standard for what a jumbo mortgage is above that number.

A couple of other things to keep in mind with jumbo financing, is that each bank is unique. We have access to many different banks and every single one of them has slightly different guidelines depending on your circumstance or what the situation is with your scenario. So we can help you determine the best possible lender. At the same time, the best possible rate within those options. So that’s something that we can definitely help to pinpoint for you. We do a lot of jumbo financing being on the west side of Denver. We deal with a lot of higher priced homes. So we’re very familiar with these programs.

The other thing to keep in mind is underwriting standards are more stringent on jumbo home loans. So you can’t have a super minimal down payment, like 3% with Fannie Mae, Freddie Mac. It’s got to be a little bit more with jumbo. They’re stricter on the underwriting guidelines. So you’re going to have to provide a little bit more documentation, but we can help you to navigate this because we work with a lot of jumbo homeowners and home buyers. So give us a call if we can answer any questions for you on jumbo mortgage financing.

https://www.youtube.com/watch?v=tITomENReyc