What Is a Jumbo Loan?
A jumbo loan is a mortgage that exceeds conventional loan limits, typically used to finance luxury or high-cost homes.
Jumbo Loan Limits
In 2024, the conforming loan limit is $766,550 for most areas. Loans above this amount are considered jumbo loans.
| Loan Type | Loan Limit (2024) |
|---|---|
| Conventional Loan | Up to $766,550 |
| Jumbo Loan | Above $766,550 |
Requirements for a Jumbo Loan
Since jumbo loans aren’t backed by Fannie Mae or Freddie Mac, lenders have stricter approval criteria.
- 💳 Credit Score: 700+ recommended
- 💰 Down Payment: 10-20% typically required
- 📉 Debt-to-Income Ratio (DTI): 43% or lower
- 🏦 Cash Reserves: 6-12 months of mortgage payments saved
Pros & Cons of a Jumbo Loan
| Pros | Cons |
|---|---|
| ✔ Higher loan limits for expensive homes | ❌ Stricter credit & income requirements |
| ✔ Can finance primary or secondary homes | ❌ May require larger down payments |
| ✔ Competitive interest rates | ❌ Higher closing costs |
Who Should Consider a Jumbo Loan?
A jumbo loan may be right for you if you’re purchasing a high-cost home and meet lender qualifications.
The Bottom Line
Jumbo loans allow borrowers to finance expensive homes, but they come with higher credit and income requirements.
“Jumbo loans provide financing for luxury homes, but qualification standards are stricter.”
— Sarah Thompson, Mortgage Expert
Frequently Asked Questions
What is the down payment for a jumbo loan?
Most lenders require 10-20% down, but some allow as low as 5%.
Are jumbo loans harder to qualify for?
Yes, they require higher credit scores, lower DTI, and larger reserves.
Can you refinance a jumbo loan?
Yes, but jumbo refinance options depend on lender requirements.