Purchase Your Luxurious Dream Home by Opting for Jumbo Loans

Have you been mesmerized by celebrity homes? Have you ever wanted to own one? Well, this dream of yours can become true with the help of jumbo loans. This is a type of financing is exclusively for those properties that are expensive for your traditional loans and exceeds the limit set by the Federal Finance Housing Agency (FHFA).

Eligibility Criteria for Jumbo Loans

You cannot just enter any bank and ask for a jumbo loan. You need to be eligible for one. The three important criteria that every mortgage lender looks for are:

  • You need to have a good income
  • You need to have an extremely good credit score when compared to traditional loans
  • You need to have a low debt-to-income ratio

When we talk about good income, you need to have enough assets to apply for a Jumbo Mortgage. Many banks are skeptical of jumbo loans and you might find it hard to get one. If you live in Washington you can try your luck at Sammamish Mortgage located in Bellevue, Washington. They offer you options of both fixed and adjustable rates, making it easier to get for you to get the loan.

The credit score eligibility for traditional loans is in the range of 620 – 640, but in the case of jumbo loans, your credit score needs to be above 700. Your debt-to-income ratio needs to be around 43%. If your debt-to-income ratio is higher than 43%, then the banks need proper documentation that shows that you are likely to pay off your loan.

Another factor to be considered here is your down payment. The typical option set by banks for jumbo loans is 20% or more. If you want to bring down your down payment, then you need to have a very good credit score.

Difference between Jumbo and Conforming Loans

You might be wondering what the difference between jumbo and conforming loans is.

  • The interest rates for jumbo loans are higher than conforming loans
  • The appraisal fees will be higher than conforming loans
  • Many banks and financial institutions require you to purchase mortgage insurance for conforming loans
  • This is not the case with jumbo loans

If you feel that jumbo loans might not be a suitable option for you, you can even opt for piggybank loans. This is a suitable option if you want to avoid the high-interest rates from jumbo loans. Here you can opt for two loans at the same time in either the following ratios:

  • 80/10/10 – where 80% is your mortgage loan amount, 10% is your down payment and 10% that can be borrowed for a second mortgage
  • 80/20 – where 80% is your mortgage loan amount, 20% is your down payment

When you opt for piggybank loans, you eliminate the need to purchase private mortgage insurance.


Opting for property loans is a tricky business, especially if you have no clue where to begin. It is always better to take help of professional financial advisors who can take you through the entire process.

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