What is a Jumbo Mortgage
Each year Fannie Mae, Freddie Mac, and their regulator, the Federal Housing Finance Agency (FHFA), set a maximum amount for loans that they will buy from lenders. In general, the loan limits are $453,100, although they go as high as $679,650 in some high-cost parts of the continental United States and Puerto Rico, and higher still in Alaska, Hawaii, Guam, and the U.S. Virgin Islands.
Mortgage loans are allowed to exceed these loan limits. Larger loans are called jumbo mortgages. The cost of obtaining a jumbo mortgage is generally higher than the cost of obtaining other loans. For this reason, they are often higher-priced mortgage loans.
What to know?
Jumbo loans will generally require higher income, higher credit scores, and more reserve liquidity. FICO score requirements vary by lender, but generally start around 700. Borrowers may need up to 12 months of reserve mortgage payments.
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