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Jumbo Mortgages: What Home Buyers Ask Us In Chat

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Jumbo mortgage loans account for 5% of mortgage loans made nationwide.

Here are the most common questions home buyers ask about jumbo loans, and the answers to those questions.

What’s the difference between a jumbo and non-jumbo mortgage?

The defining difference between a jumbo mortgage and a non-jumbo mortgage is loan size. Jumbo mortgages exceed the local conforming mortgage loan limits for an area.

What are the standard terms of a jumbo mortgage?

Jumbo mortgages aren’t standardized; they’re not like FHA mortgages, VA mortgages, or other government-backed mortgages. The bespoke nature of jumbo loans is the entire point.

What’s a portfolio loan? Is it the same as a jumbo loan?

A portfolio loan is a loan that a mortgage lender keeps in its investment portfolio instead of selling the loan through Wall Street for securitization. All jumbo loans are portfolio loans.

What is a mortgage loan limit?

Mortgage loan limits are the largest-sized mortgage loans that the government will agree to back. Loan limits vary by U.S. county and by mortgage-backing agency.

Are jumbo loans harder to get approved than conforming loans?

No, jumbo loans aren’t harder to get approved as compared to other loan types — they require a different series of steps, though. Sometimes, more effort is required, and sometimes less effort is required. Your experience will vary based on your individual circumstance.

When I pay my jumbo loan each month and the balance drops below my local loan limit, does my mortgage transform into a conforming loan?

Jumbo loans do not turn into conforming loans when their remaining loan balance falls below local mortgage limits. Once a jumbo, always a jumbo.

What credit rating do I need for a jumbo mortgage?

Jumbo loans don’t have minimum credit ratings, per se. However, borrowers with higher credit ratings can be approved for a wider range of jumbo loans, which may result in lower interest rates.

How long does it take to approve a jumbo loan?

Jumbo loans don’t take more or less time to approve as compared to other loan types. Most mortgage lenders can close a jumbo loan in 3 weeks or fewer.

What is the down payment requirement for a jumbo loan?

There are no specific down payment requirements for a jumbo mortgage. Borrowers can make large down payments if they want, or they can make no down payment at all, depending on the specific jumbo loan type and the lender that offers it.

Can I get a jumbo mortgage if I’m self-employed for less than two years?

Yes, you can get a jumbo mortgage if you’re self-employed for less than two years. Jumbo mortgages don’t have specific self-employment requirements.

Do I need mortgage insurance with a jumbo mortgage?

Sometimes, but usually no. Mortgage insurance is not always required with jumbo loans.

What are the jumbo mortgage closing costs?

Jumbo mortgage closing costs are similar to closing costs on other loan types. However, some mortgage lenders will require two home appraisals for a jumbo mortgage approval. An extra appraisal can add a few hundred dollars to your closing costs.

Can I use jumbo loans to buy a vacation home?

Yes, you can use jumbo loans to buy a vacation home.

Can I use jumbo loans to buy a rental property?

Yes, you can use jumbo loans to buy a rental home.

Can I use jumbo loans for a multi-unit home?

Yes, you can use jumbo loans to buy multi-unit homes, including 2-unit homes, 3-unit homes, and 4-unit homes.

Get pre-approved for a mortgage today.

Dan Green
Dan Green

Dan Green is a former mortgage loan officer and an industry expert. He's appeared on NPR and CNBC, and in The Wall Street Journal, Bloomberg, and dozens of local newspapers. Dan has helped millions of first-time home buyers get educated on mortgages, real estate, and personal finance. Have mortgage questions? Ask Dan in the chat.

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