Jumbo Loan Financing

What is a Jumbo Mortgage?

Simply put, a jumbo mortgage loan is home loan that exceeds the current "conforming loan limit" as set by FHFA (Federal Housing Finance Agency).

This limit is currently $726,200 in the states we lend of Minnesota, Wisconsin, Iowa, North Dakota, and South Dakota (As of Dec 2022).

JUMBO MORTGAGE: Loans over the conforming loan limit offered by Fannie Mae ™ and Freddie Mac ™, and usually up to $2,000,000.

SUPER JUMBO MORTGAGE: Home loans typically over $2,000,000. Generally these loans are one off loans offered on a case-by-case basis from a limited number of lenders and banks.

Jumbo Loans Are Different

Jumbo loans, while similar to many aspects of traditional loans in terms of typical underwriting rules and guidelines, do come with some notable differences. Some of the major ones are listed below.

Down Payment Requirements

Unlike traditional loans with down payment options starting as low as 3%, jumbo loans usually begin with 20% down payment as a minimum. You may be able to find some options with 15%, or even 10%, but those are rare, interest rates are higher, and not common.

Jumbo Loan Interest Rates

There is no centralized secondary mortgage market, (think Fannie Mae and Freddie Mac) for the jumbo loan market. This means the lender will have to hold the loan on its own books for the life of the loan.  What does this mean to you?  Simply that you should expect different interest rates than you commonly see advertised for traditions loans.

Closing Costs for Jumbo Loans

As with the interest rates, closing costs on jumbo luxury loans will differ from your more common traditional loan. Everything will cost a bit more.  The appraisal for example, is currently between about $500 - $700 on a modest home, but is not uncommon for a luxury appraisal to be in excess of $2,000 - AND it is common that the lender may require TWO appraisals for the luxury home.

One time pro-rated escrows account startup requirements for taxes and insurance can really add up too.  A few months of up-front taxes  on a property with $30,000 or more in property taxes adds up fast.

It is also common for lenders on luxury loans to only offer loans with some discount points required up-front in order to give you the best possible interest rate.

Ready To Get Started?

For your private and confidential financing review, call Joe Metzler, Senior Loan Officer directly at (651) 552-3681. Joe has over 25-years lending experience, and is top rated both locally and nationally

You can also jump start the process by completing our secure online application.