Buying a home to lay down your roots is an exciting moment of your life, but what if the amount you want to borrow exceeds the norm? If you expect to borrow more than $417,000, then a jumbo loan is what you are looking for. Also known as non-conforming mortgages, jumbo mortgage loans follow different underwriting guidelines than those set forth by the Federal National Mortgage Association/Federal Home Loan Mortgage Corporation (FNMA/FHLMC).
The purchase limit varies from county to county depending on whether you’re buying a home in a higher cost housing market, but $417,000 is generally the limit across the country. Depending on the lender, the limit could be $417,000 regardless of the location of the property.
How is Jumbo Mortgage different?
Compared to regular, conforming mortgage loans, non-conforming mortgage loans differ in a number of underwriting criteria. Here are a few examples:
- Rates – Your jumbo mortgage loan rate may be higher or lower based on the market and lender.
- Debt-to-income ratio – For jumbo loans, a 40% debt-to-income ratio is a good place to start. Try our debt-to-income calculator to find out your ratio.
- Credit score – The higher your credit score, the more likely you are to be approved for a jumbo mortgage loan. But minimum credit scores should range between the high 600’s to low 700’s.
- Properties – Lenders may have restrictions on the type of properties that they would accept to underwrite. At Nationwide, jumbo loans are accepted for owner-occupied, primary residences for a variety of property types including one-unit, single family planned urban development (PUD) and condo. The maximum acreage that we provide jumbo mortgage loans for is 20 acres and the maximum number of financed properties borrowers can have beyond the one being financed is three.
Is Jumbo Mortgage right for me?
If the amount you intend to borrow to finance a new home exceeds the average limit of $417,000, then you will need to apply for a jumbo loan. Keep in mind that the limit isn’t based off of the market value of the house, but rather the total loan amount you will be borrowing.
Qualification criteria may vary depending on the lender but generally, those who have higher credit scores, low debt-to-income ratios and less than four total financed properties are more likely to qualify for a jumbo loan. Knowing your credit score and your debt-to-income ratio upfront can help you plan ahead for the right type of mortgage and down payments you may need to buy your new home. You should be able to check your credit score regularly with the free report available from the major credit reporting agencies once a year and from services like Credit Karma.
Nationwide Jumbo Mortgage rates
Jumbo mortgage rates are for mortgages greater than $417,000.