Jumbo Home Loans

What Is a Jumbo Loan? Financing for High-Value Homes

If you're looking to purchase a high-priced home that exceeds the limits of a conventional mortgage, a jumbo loan may be the financing solution you need. Sometimes referred to as non-conforming loans, jumbo loans are designed for borrowers who need to borrow more than the standard loan limits set by Fannie Mae and Freddie Mac — the two major government-sponsored enterprises (GSEs) that buy and guarantee conventional mortgages.

When Is a Loan Considered "Jumbo"?

As of 2024, the conforming loan limit in most U.S. counties is $766,550 for a single-family home. If you need a mortgage that exceeds this amount, you're likely entering jumbo loan territory. In high-cost areas, the limit may be higher, but jumbo loans still begin where conventional financing ends.

Key Features of Jumbo Loans

Jumbo loans are ideal for financing luxury homes, high-value properties, or real estate in competitive housing markets where home prices often exceed conventional limits. However, they come with different requirements than standard loans.

Here’s what you can expect:

Larger loan amounts: Designed for properties that exceed conforming loan limits.
Higher credit standards: Most lenders require a credit score of 700 or higher.
Stricter debt-to-income (DTI) ratios: Typically 43% or lower.
Larger down payments: Down payments of 10% to 20% or more are often required.
Stronger financial reserves: Lenders may ask for several months' worth of mortgage payments in savings to ensure the borrower can sustain the loan.

Are Jumbo Loans More Expensive?

While interest rates for jumbo loans can be competitive, they often involve higher closing costs, stricter underwriting, and larger financial documentation requirements. That’s why working with a lender who understands the nuances of jumbo lending is crucial.

How Sterling Financial Services Can Help

At Sterling Financial Services, we specialize in helping clients navigate the complexities of jumbo loan financing. Whether you're buying a primary residence, second home, or investment property, we’ll provide expert guidance, walk you through the requirements, and help you secure a mortgage that fits your financial profile and long-term goals.