There are many benefits to jumbo loans. One of the biggest benefits is that financing options are available up to $3,000,000. This may provide convenience to many borrowers.

A jumbo loan is a loan that exceeds the conforming loan limits as set by Fannie Mae and Freddie Mac. As of 2021, the limit is $548,250.

Underwriting criteria for jumbo loans are stricter because the loans are larger and riskier for lenders. There are some specific requirements such as having you FICO score to be higher than 700, sometimes as high as 720, to qualify for a jumbo loan. Your debt-to-income ratio (DTI) is considered to ensure you don’t become over-leveraged, though they may be more flexible if you have plentiful cash reserves. You are more likely to be approved for a jumbo loan if you have ample cash in the bank. To prove your financial health, you will need extensive documentation, perhaps more than for a conforming loan. You should be prepared to hand over your full tax returns, W-2s and 1099s when applying, in addition to bank statements and information on any investment accounts.

The way to go when buying an expensive home, with loans starting at $548,251. The requirements are:

• Credit score usually above 700
• Down payment from 10 – 20%
• A debt-to-income ratio of lower than 43% 
• At least 6 months of reserve cash