Your Lake of the Ozarks Mortgage Lender: What is a JUMBO Home Loan?

Monday, October 23, 2023

What is a JUMBO Home Loan?

What is a JUMBO Home Loan?

A jumbo home loan is a mortgage loan that is in excess of the conforming loan limit set by the Federal Housing Finance Agency (FIFA), which was $726,200 for a one-unit residence in 2023. These loans are usually obtained to finance a luxury home or a property that is located in a high-cost area where the conforming loan limit is typically below the median home price for that area.

Qualifying for a jumbo mortgage follows the same process as a conforming loan where the lender will still review your credit history, credit score, income, assets, reserves and debt ratio. Some of the requirements for jumbo loans are more stringent than conforming loans, such as requiring more reserves after closing (12 months versus 2-6 required for conforming loans).

Jumbo loans are available with a fixed rate term or an adjustable interest rate, depending on the factors on the loan (i.e., credit score, loan-to-value, etc. These loans are also considered riskier for lenders because they are not guaranteed by Fannie Mae and Freddie Mac, which means the lender is not protected from losses if a borrower defaults on their mortgage.

Team Lasson is here for all of your home buying needs! If you're thinking about making the leap into home ownership in the near future, please contact us today to get started. We can help you determine what loan program works best for your financial goals. The first step in preparing for your big purchase is to get pre-approved for a mortgage at Lake of the Ozarks. To get started, visit www.yourlakeloan.com or give us a call at (573) 746-7211!

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