Jumbo Loans

What is a jumbo loan?

The main difference between a jumbo loan and a typical mortgage is the amount you’re borrowing. Standard mortgages are limited to an amount known as the conforming loan limit. As of 2021, the conforming loan limit is $647,200 in most areas. As home prices continue to rise, many homes are becoming too expensive for a standard mortgage, and buyers who need to finance more than that will require a jumbo loan. Because they fall outside of federal loan restrictions, jumbo loans are not backed by government-sponsored organizations such as Fannie Mae or Freddie Mac. That means lenders must shoulder more risk, which can result in higher interest rates and stricter credit requirements.

Do jumbo loans have higher rates?

Many people think jumbo loans have higher interest rates than standard home loans. That may have been true in the past, but these days interest rates on jumbo loans are comparable to conventional rates. In some cases, they can even be lower. Many homebuyers may be able to purchase a pricier home without a much higher APR.

Do jumbo loans always have adjustable rates?

Many lenders are only able to offer adjustable rate jumbo loans, which means your mortgage rate rises whenever the national interest rate goes up. But at Elev8, we’re able to offer reasonably priced fixed-rate options on our jumbo mortgages. As mortgage brokers, we shop around with different lenders in order to offer our clients the most competitive rates, and homebuyers with a high income and strong credit history may qualify for interest rates comparable to a traditional mortgage.

Who qualifies for a jumbo mortgage?

Since jumbo loans are larger and considered to be riskier, they typically have stricter underwriting criteria. Borrowers may need to show:
- FICO score above 680.
- Enough cash reserves to cover one year of mortgage payments.
- Lower debt-to-income ratio.
- Extensive documentation proving financial health.

At Elev8 in Bend and Central Oregon, we will work with you to find the best mortgage product for your needs. Because we are mortgage brokers, and we shop around with different lenders in order to find the most competitive rates, the jumbo loans we offer are unique in comparison to other lenders. While most lenders require a 20 to 30 percent down payment, which can make it difficult for homebuyers to qualify, we offer competitive rates often lower than standard conforming loan rates. We also require as little as 3 percent down.