What is a Jumbo Loan?

A jumbo loan, or non-conforming loan, is a mortgage that exceeds the loan limits set for conventional loans. In 2021, the limit for most areas in the U.S. is $548,250, with higher limits in certain high-cost areas.

Key Characteristics of Jumbo Loans:

• Higher Loan Limits: Essential for financing luxury homes or properties in high-cost real estate markets.

• Stricter Credit Requirements: Lenders typically require excellent credit scores, often 700 or higher.

• Larger Down Payments: Jumbo loans may require larger down payments, sometimes 20% or more.

• Proof of Substantial Reserves: Lenders often require proof of significant financial reserves or assets.

Interest Rates and Terms:

While jumbo loans used to come with higher interest rates than conventional loans, the gap has narrowed in recent years. Terms can vary, so it's important to shop around for the best rates and conditions.

Qualifying for a Jumbo Loan in Pennsylvania:

Qualifying for a jumbo loan can be more challenging than for a conventional loan. Lenders will closely evaluate:

• Your credit score and credit history.

• Your debt-to-income ratio (DTI).

• Your employment history and income stability.

• Your cash reserves and assets.

Choosing the Right Lender:

Working with a lender experienced in jumbo loans is crucial, especially in regions like Lehigh Valley and Bucks County where the property market can vary significantly. A knowledgeable mortgage professional can guide you through the process and help find a loan that suits your financial situation.

Understanding jumbo loans’ requirements, terms, and how they fit into your financial plan is crucial. With over 50 years of real estate experience, our Mission Mortgage team understands the specifics of PA home loans to find competitive rates and terms suited to your needs.