A jumbo loan is a mortgage larger than the conforming loan limit set by the Federal Housing Finance Agency for the county. Because it cannot be sold to Fannie Mae or Freddie Mac, each lender sets its own guidelines and pricing.
When you need one
Los Angeles County already has a high-cost conforming limit, but many homes in the area still price above it. If your loan amount, after your down payment, is above the current limit, it is a jumbo loan. Ask us for this year's figure.
What lenders typically look for
- Strong credit, commonly 700 or higher, with some programs accepting less.
- A down payment of 10% to 20% depending on the loan size, property type and lender.
- Cash reserves after closing, often six to twelve months of payments.
- Full income documentation, with bank-statement options available for self-employed borrowers through non-QM lenders.
Why a broker helps here
Jumbo guidelines vary more from lender to lender than any other product. One lender's 20% down requirement is another's 10%; one counts restricted stock as reserves and another does not. Shopping the file across several jumbo lenders is where a broker earns its keep.