Many mortgage options are loans that conform to standards set by Fannie Mae and Freddie Mac. Because Fannie and Freddie buy mortgages from lenders, they set limits on the loan amount. Currently, the 2018 loan limits are $453,100 in most states. For states and areas with higher home prices, the loan limit is higher. A complete list of conforming loan limits can be found here.
A jumbo loan is a loan that exceeds the conforming limits, therefore making it a non-conforming mortgage. The amount of these jumbo loans depends on the lender. They can be fixed-rate or adjustable-rate with options for term length.
Lenders will look at the same criteria used for other loans when applying for a jumbo mortgage: credit score, income, down payment size, and debt-to-income ratio. However, most lenders will require a credit score of at least 680 and a down payment between 10% and 20%. Of course, this can vary depending on the lender and your unique financial situation.
If you are looking at homes that cost more than the conforming loan limit for your area, NEHM can help find the best non-conforming loan for you.
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