The Beginner’s Guide to Jumbo Loans

For many that are just beginning to look into a home for the first time, there is a whole new world of terminology, principles, and rules to learn in order to successfully navigate the waters of homeownership. For those new to homes, loans and mortgages, learning the basics of jumbo loans and requirements and why they might be the right choice for you.  

What is a Jumbo Loan?

A jumbo loan is essentially a large loan used in buying a home. It is larger than a normal loan and has therefore earned the name, jumbo loan. Jumbo loans are typically used to finance larger homes, as the amount of a jumbo loan is over about $550,000. Conforming conventional loans typically have a limit of $548,250. When a home exceeds that value, a jumbo, or nonconforming loan must be used. However, this dollar value fluctuates according to the area. Higher income locations could have a higher threshold for jumbo loans. Jumbo loans have no ceiling or limit.  

What are the Requirements for a Jumbo Loan?

Because jumbo loans are riskier for lenders, there are a number of different requirements that serve as safeguard for providers which are:
  • Down payment of 20% or greater
  • Debt-to-Income ratio around 40% or less
  • Property appraisal, possibly two appraisals
  • Closing costs, typically well over $10,000
  • Consistent income that you can document with tax records and bank statements
  • Credit score of around 700 or even greater
If you meet the previous qualifications, you could be a great candidate for a jumbo loan. The higher loan amounts require higher standards for recipients than a normal loan, so it is important to see if you meet the minimum requirements before proceeding. If you do not currently meet these requirements, you can begin to work towards them to ensure your future qualification for a jumbo loan.  

How to Select a Provider?

There are many jumbo loan providers that it can be hard for homeowners to discern who to select. As with any significant financial decision, taking the time to think through the various options is always recommended. It is wise to communicate and see rates for different providers so you have a complete understanding of what is available. Using a jumbo mortgage rate forecast or jumbo loan calculator are a smart option to get a general idea of what you could be looking at. Jumbo loans can be a great choice for some homeowners. It just takes a bit of research to know if they are right for you.

A Lending Hand for Financing Home Mortgages

Spire Financial (A Division of V.I.P. Mortgage, Inc.) brings lending expertise to you. All of our loan officers offer personalized communication for every client, guiding them through the process. We can show you ways to maximize your finances and unlock future opportunities. Spire Financial keeps you in control of refinancing, debt consolidation, and home equity. Together, we can achieve your financial goals.



V.I.P. Mortgage, Inc. DBA Spire Financial does Business in Accordance with Federal Fair Lending Laws. NMLS ID 145502. For state specific licensing, visit V.I.P. Mortgage, Inc. is not acting on behalf of or at the direction of the FHA/HUD or the Federal Government. This product or service has not been approved or endorsed by any governmental agency, and this offer is not being made by any agency of the government. V.I.P. Mortgage, Inc. is approved to participate in FHA programs but the products and services performed by V.I.P. Mortgage, Inc. are not coming directly from HUD or FHA. Information, rates, and programs are subject to change without notice. All products are subject to credit and property approval. Not all products are available in all states or for all loan amounts. Other restrictions may apply. This is not an offer to enter into an agreement. Not all customers will qualify.

2023 © Spire Financial


Contact Us (303) 595-0110