Fixed or adjustable
A fixed rate keeps principal and interest the same for the life of the loan. An adjustable rate is fixed for a set number of years and then can change, so the payment can rise.
How adjustable rates work
Jumbo loans
Jumbo loans for higher-priced homes.
For a loan larger than the conforming limit set each year for the county. Here is what jumbo programs look for, how interest-only and large loan amounts work, and what to gather.
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- Several jumbo programsWe compare programs to find the rules that fit your file.
- Apply online or by phoneStart a quote, apply online or call 732-686-9999.
The basics
What makes a loan jumbo
Fannie Mae and Freddie Mac buy most home loans, up to a limit set each year for each county and number of units. A loan above that limit is a jumbo loan. Because the agencies do not buy it, each jumbo program writes its own rules.
Each program sets its own rules for the down payment, credit and the savings you keep after closing, and the rules tighten as the loan grows. Most programs ask for full income documents, and larger loans may need two appraisals.
Jumbo programs do not usually charge mortgage insurance. Loans can be fixed or adjustable, for a main home, a second home and, in some programs, a rental property.
What jumbo programs look at
- The down payment, as a share of the price
- Your credit, usually the lowest middle score of all borrowers
- Your debts compared with your income
- Savings after closing, counted in months of payments
Options
Jumbo options
Which option fits depends on the size of the loan, the home and how you document income.
Interest-only
Some programs offer an interest-only period at the start. When it ends, the payment rises to repay the balance over the rest of the loan, and it can be much higher. Plan on the higher payment, not the interest-only one.
Large loan amounts
Loans well above the conforming limit are possible. As the loan grows, programs ask for a larger down payment, more savings after closing and, often, two appraisals.
Portfolio adjustable-rate loans
Some lenders keep loans on their own books and set their own rules. That can help with homes and borrowers other jumbo programs turn down, such as some condominiums and co-ops. These loans are adjustable: the rate is fixed for a set number of years and then can change every year, so the payment can rise. Income, assets and credit are still fully documented.
Foreign national buyers
A buyer who lives outside the United States may be able to finance a second home or a rental property at jumbo sizes through a portfolio adjustable-rate loan, with income and assets documented and a larger down payment.
Other ways to document income
If your tax returns do not show your real income, there are programs that look at bank statements or assets instead. They have their own rules; ask a loan officer whether one fits.
Alternative documentation loans
How it works
The steps to a jumbo loan
Talk about the home and the plan
The price range, the down payment, the kind of home, and whether you will live in it, use it as a second home or rent it out.
Apply and document
Pay stubs and W-2s, or personal and business tax returns if you are self-employed, plus statements for the down payment, closing costs and savings.
Appraisal
One appraisal, or two from different appraisers on larger loans. Jumbo loans do not use appraisal waivers.
Underwriting and closing
An underwriter checks the file against the program’s rules. You review your closing disclosure and sign.
Documents
What documents you need
Jumbo programs document income and assets in full. Most borrowers can start with these.
- Recent pay stubs and your W-2 forms
- Personal and business tax returns and a year-to-date profit and loss statement if you are self-employed
- Bank and investment statements for the down payment, closing costs and savings after closing
- Statements for any other properties you own
- Your signed purchase contract, once you have one
- Photo identification, and a passport for a buyer who lives outside the U.S.
Questions
Common questions about jumbo loans
How do I know if my loan is jumbo?
Compare the loan amount, not the price, with the conforming limit for the county and the number of units. The limit changes each year, and it is higher in high-cost counties. A loan officer can check it for your address.
How much do I need for a down payment?
It depends on the program, the size of the loan and the kind of home. The larger the loan, the larger the down payment programs ask for. A loan officer can compare programs for your price range.
Why do jumbo programs ask for savings after closing?
Without an agency behind the loan, programs want to see that you could keep making payments through a rough patch. The amount grows with the size of the loan.
Can I buy with a jumbo loan if I live outside the United States?
In some cases, for a second home or a rental property, through a portfolio adjustable-rate loan. Expect a larger down payment and full documents for your income and assets. Ask a loan officer whether your situation fits.
Do you lend in my state?
Fidelity Residential is licensed in many states. The full, current list is on NMLS Consumer Access (opens in a new tab), or call us at 732-686-9999.
Ready to talk about a jumbo loan?
Get a quote, apply online, or talk it through with a licensed loan officer.
This page is general information, not a commitment to lend. Programs, terms and eligibility depend on credit, income, property and underwriting review and are subject to change without notice.