Jumbo Loans

A jumbo mortgage is defined as any loan that exceeds the conforming loan limits set out my Fannie Mae and Freddie Mac. The standard conforming loan limit throughout the nation is $726,200.  However, high cost areas such as in California, Hawaii, Alaska, and various counties in each state throughout the country have higher loan limits up to $1,089,300.  If you would like to view the conforming loan limits for your county, you may do so using this conforming loan limits lookup tool.

Jumbo Loan Programs

Below is a basic overview of some of the different types of program options for jumbo loans.  There are also many unique jumbo loan products that offered by various jumbo lenders.  This overview is just to provide some general information about jumbo loan options (improve).

Prime Jumbo Loan 

Most jumbo lenders cater to borrowers with good or excellent credit (720 or higher credit score).  Jumbo loans that are available to borrowers with credit scores above 720 often will allow for a down payment as low as 5%.  Lenders that offers these jumbo programs often have lengthy waiting periods after a bankruptcy or foreclosure.

Non-Prime Jumbo Loans 

Borrowers with credit issues may be eligible for a non-prime jumbo loan (also referred to as “bad credit jumbo loans”).  This includes options for borrower with credit scores as low as 580.  Many non-prime jumbo lenders that offer these programs do not have any waiting periods after a bankruptcy, foreclosure, or short sale.  This means that a borrower could potentially qualify for a jumbo loan immediately after going through a foreclosure or bankruptcy.

In order to qualify for a non-prime jumbo loan, you should expect to be required to put at least 10% down.  However, the minimum down payment requirement will depend on the lender’s requirements.  If you would like to receive a free consultation from a jumbo lender that offers non-prime loans, please fill out this form.

Non-QM Jumbo Loans 

Below are some non-qm (non-qualified mortgage) jumbo loan options:

• Bank Statement Jumbo Loan  – Self-employed borrowers may be able to qualify for a jumbo loan without having to provide any tax returns.  Bank statement loans allow a borrower to use their bank statements to prove income instead of tax returns.  Some bank statement lenders will approve a borrowers with credit scores as low as 500.  The minimum down payment required to get a bank statement loans is usually at least 10% (the higher your credit score, the lower of a down payment you will likely be approved for).
• Asset Utilization Jumbo Loan  – If you have a lot of assets, but little or no income, you may be able to qualify for a jumbo loan using your assets.  These programs are known as “asset depletion loans”.  How an asset depletion loan works, is a lender will divide your assets over a certain number of months (usually between 60 months and 360 months).  This will create a “monthly income” to use for income qualification purposes.

Would you like to see if you qualify for a non-qm jumbo loan?  We can help match you with a mortgage lender that offers non-qm loans in your location.  To have a non-qm mortgage lender contact you, please request to get matched with a lender.

Frequently Asked Questions

Below are some frequently asked questions and answers about jumbo loans:

Do jumbo loans require mortgage insurance (PMI)?:
Any loan that does not exceed an 80% LTV does not need to have mortgage insurance included for the loan.  If you were to find a jumbo mortgage lender that would approve of a lower down payment, you would theoretically have to pay PMI.

Are there any FHA programs for jumbo loans?
No, there are strict FHA loan limits in place, which restrict the amount that may be borrowed using an FHA loan.

Are there any USDA jumbo loans that exist?
No, similar to the FHA, the Department of Agriculture does not insure or back jumbo loans.

Does rental income count towards DTI ratios on jumbo loans?
As with conforming loans, rental income often can help lower your DTI ratios. This will be the prerogative of the underwriter to say for certain, but in most cases income from rental properties counts as qualifying income.