Jumbo Mortgage

Posted In: Mortgage Basics

A jumbo mortgage loan is a conventionally large loan which allows you to purchase big parcels of real estate or luxury homes.

Advantages and Risks

The definition of what qualifies as a jumbo mortgage loan varies from state to state. In the continental United States, a jumbo loan is approximately $415,000 for a single-family home. In Alaska and Hawaii, however, jumbo loans are around $625,000 for a single-family home. Prices for duplexes, three-unit, and four-unit homes also vary from state to state.

Jumbo mortgages can be critical for people who want to buy property that is too expensive to qualify for a conventional mortgage. In today's housing market that definition covers an ever-increasing percentage of homes. But approach jumbo mortgages with caution: they will place you under greater financial pressure. Not surprisingly, jumbo home loans are considered higher risk than conventional mortgages.

Obtaining a Jumbo Mortgage

If you're planning to take out a jumbo mortgage, it's crucial that you have a good long-term budget in place. Apart from the financial logistics, jumbo home loans require you have to have exceptionally good credit, which can take time to establish.

Make sure you work with an experienced mortgage professional to stay within your debt-to-income ratio. You may also want to begin storing up money to build up your net worth and knock down the principal in order to qualify for lower jumbo mortgage rates.

Whether you're looking to purchase a home or to refinance your existing home, you can employ America's Lending Partners to match you with up to four trusted lenders. You can evaluate the terms these lenders offer and thus come to a far more responsible decision about what's right for your budget. ALP's service is free and secure.

If you'd prefer more guidance with your mortgage application you should consider consulting a mortgage planner, who can provide the knowledge and honesty you'll need to obtain your jumbo mortgage.