Jumbo mortgages are home loans that exceed conforming loan limits. If you are thinking about buying a high-priced or luxury home, check into jumbo home loans.
The requirements and guidelines include:
Good credit history – Conventional loans are a good choice for borrowers with very good credit.This generally means a FICO score of 700 or higher.
Financial strength – When applying for a jumbo mortgage, the maximum debt-to-income ratio for jumbo loans is 45 percent. The required reserve amount for jumbo loan borrowers can be as high as 20 percent of the value of the loan.
Larger down payment – There is no private mortgage insurance option with a jumbo mortgage. The required down payment will be larger - typically 20 percent.
Property appraisal – The property appraisal must support the purchase price for the home and the mortgag
The limit on conforming loans is $424,100 in most areas of the country, but jumbo mortgages can exceed these limits. Even so, if you're considering a home in a high-cost area, you may still be able to obtain a conforming fixed-rate mortgage or adjustable-rate mortgage for up to $636,150. FHA loans have limits up to $729,750.