A jumbo loan is a type of mortgage that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). Because these loans are not backed by Fannie Mae or Freddie Mac, they typically come with different underwriting requirements and higher interest rates.
Key Features of Jumbo Loans
- Higher Loan Amounts: Jumbo loans are used to finance properties that exceed the conforming loan limits, which can vary by location. In many areas it's based on the median home value in each county. The limit can be higher in high-cost markets.
- No Mortgage Insurance: Unlike many conventional loans, jumbo loans typically do not require private mortgage insurance (PMI), even with lower down payments.
- Stricter Credit Requirements: Borrowers usually need a higher credit score (often 700 or above) to qualify, along with proof of a strong income and financial stability.
- Larger Down Payments: Jumbo loans often require larger down payments, usually ranging from 10% to 20% minimum.
- Higher Interest Rates: Due to the increased risk for lenders, jumbo loans may carry higher interest rates compared to conforming loans.
- More Detailed Documentation: Lenders may require extensive documentation, including detailed income verification, asset documentation, and sometimes even a larger cash reserve.
Pros:
- Access to financing for high-value properties.
- No PMI required, saving money on monthly payments.
- Flexibility in terms of property types.
Cons:
- Stricter qualification criteria and higher interest rates.
- Larger down payment requirements can be a barrier for some borrowers.
- Limited availability compared to conforming loans.
- A jumbo loan is a useful option for buyers looking to purchase high-value properties that fall outside conventional financing limits. It’s essential for potential borrowers to carefully evaluate their financial situation and compare offers from various lenders.
JUMBO LOANS for Mustang, Tuttle, Newcastle, Blanchard, Norman, Moore, Choctaw, Deer Creek, OK & Beyond
Once you’ve found the perfect property, the next step is securing the right mortgage. And it’s one of the most integral steps – which is why you need a highly reputable mortgage company serving the Edmond, Piedmont, Yukon, Mustang, Tuttle, Newcastle, Blanchard, Norman, Moore, Choctaw, Deer Creek and Oklahoma City, OK area at your side. Local Lending Oklahoma and Dean “The Mortgage Machine” Slatev have years of experience helping clients achieve their homeownership goals with personalized mortgage solutions such as jumbo loans.
A jumbo loan may be the best option for you if you’re pursuing the purchase of a property that costs more than $647,200, which is generally the maximum amount for a conventional loan. Jumbo loans often come with stricter terms, a fixed interest rate, and higher standards in regard to credit score, debt-to-income ratio, and other factors.
A jumbo loan requires quite a lot, but you shouldn’t let that scare you away from landing the home of your dreams! Just get in touch with Local Lending Oklahoma for a consultation and discuss your jumbo loan options. We are proud to help those throughout the Edmond, Piedmont, Yukon, Mustang, Tuttle, Newcastle, Blanchard, Norman, Moore, Choctaw, Deer Creek and Oklahoma City, OK region secure the home of their dreams with jumbo loans you can depend on.
LET OUR LOAN EXPERTS GUIDE YOU
If you’re considering a jumbo loan for a property in the Edmond, Piedmont, Yukon, Mustang, Tuttle, Newcastle, Blanchard, Norman, Moore, Choctaw, Deer Creek and Oklahoma City, OK area, the experienced staff at Local Lending Oklahoma will be there for you every step of the way. From collecting all necessary documentation to handling any snags along the way, we will keep you updated and work tirelessly to provide a seamless jumbo loan application process.
We offer a free, 9-page home valuation loan with every no-cost, no-obligation application – get yours by applying today! Our lenders will be in contact with you as soon as possible to begin the jumbo loan process.