If you’re looking to purchase a home in a more expensive housing market, you may need to secure a Jumbo mortgage for a higher price to lock in the deal.
A Jumbo loan is a mortgage used to finance properties exceeding the Federal Housing Agency (FHFA) limits of $647,200. These loans are typically riskier for lenders because they aren’t guaranteed by Fannie Mae or Freddie Mac and often have a higher level of underwriting scrutiny due to the loan amount.
Due to the increased demand in the housing market, jumbo loans are becoming more popular because they offer the following benefits:
With stricter underwriting restrictions for jumbo mortgages, there is a specific criteria and borrower type who can qualify, such as: