Jumbo Loan Qualifications 2023

Notebook with the word jumbo loan written on a pageHave you ever considered buying a home in an expensive area? Buying a home in a higher price range can be intimidating, especially if you are curious about the loan limits. In some cases, you may need to get multiple loans, or you could choose to get a jumbo loan. Jumbo loans are large mortgage loans that exceed the limits set by the Federal Housing Finance Agency (FHFA).

While jumbo loans typically provide total funding for high-value homes, jumbo loan lenders are taking a higher risk, so it is essential to understand the jumbo loan qualifications before applying. Read on to learn what a jumbo loan is, the eligibility requirements for a jumbo loan, the underwriting process, and alternative options to jumbo loans.

What is a Jumbo Loan?

A jumbo loan is a large mortgage loan that exceeds the limit set by the Federal Housing Finance Agency (FHFA). It is also a non-conforming loan because it exceeds the maximum loan limit established by the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC).

Jumbo loan rates are typically higher than conventional ones, and the borrower may need to make a larger down payment than a conventional loan. While jumbo loan limits vary from area to area, a loan above $510,400 for a single-family home is generally considered a jumbo loan.

Jumbo mortgage lenders have more stringent qualification criteria than other lenders. Generally, borrowers need a higher credit score, a higher income, and a more sizable down payment. Lenders also need to have more asset reserves.

Jumbo refinance rates may also be higher than conventional refinance rates, and borrowers must still meet the exact requirements of a new purchase loan. However, a borrower with a large amount of equity in their home may get a lower rate with a jumbo refinance. 

If you are considering taking out a jumbo loan, shopping around and comparing the different jumbo mortgage lenders and rates available is essential. You should also ensure you understand the repayment terms and the overall cost of the loan.

Eligibility Requirements for a Jumbo Mortgage Loan

As of 2023, the eligibility requirements for a jumbo loan vary depending on the loan type and lender. Before applying for a jumbo loan, it is essential to carefully research the loan type and lender to ensure that you meet all the qualifications for approval. 

Jumbo Loan Rates

Jumbo loan rates often exceed conventional loans due to the increased loan amounts and more strict underwriting criteria. Jumbo loans require a higher interest rate, and the rates for jumbo loans can differ significantly depending on the lending institution and prevailing market conditions. To obtain the most favorable jumbo loan rates, it is crucial for borrowers to shop around for competitive offers, as even minor rate differences can lead to substantial savings throughout the life of the loan.

Unlike conventional loans, jumbo loan rates are often higher because these mortgages cover more significant loan amounts, typically necessitating a more substantial lender commitment. Furthermore, jumbo loans require a down payment that may exceed the requirements for conventional mortgages. This scenario makes jumbo borrowers financially responsible for a more considerable monthly principal and interest payment.

Requirements for jumbo mortgages are often more stringent, partly because they do not have the backing of government agencies like conforming loans. As jumbo loan rates tend to carry higher interest rates than conforming loans, borrowers seeking a bigger loan should carefully compare lender offers to secure the most competitive jumbo rates.

Jumbo loan rates can be higher than those for conventional loans due to the more significant borrowing amounts and more rigorous underwriting standards. By comparing lender rates and understanding the unique requirements of jumbo mortgages, prospective borrowers can ultimately secure the most favorable jumbo rates available to them.

Large Mortgage Home Loans

Large mortgage loans, such as jumbo loans, often require larger down payments than conventional loans to offset the greater risk the lender takes. Most jumbo loan lenders require a minimum 10% - 20% down payment. Additionally, lenders may require that the borrower meet additional criteria, such as having a minimum credit score, a minimum amount of assets or financial resources, or a debt-to-income ratio of 45% or less. 

Jumbo Loan Limits

Jumbo loan limits, established by the Federal Housing Finance Agency (FHFA), play a significant role in the mortgage industry. In most counties, the jumbo loan limit has reached $726,200 for a single family home as of 2023, with higher limits set for areas with a high cost of living. A home loan that exceeds this limit is considered a non-conforming mortgage, as it surpasses the conforming loan limit set by the FHFA.

Borrowers seeking higher loan amounts than the conforming loan limit may turn to jumbo mortgages, also known as non-conforming mortgages, for their financing needs. These loans cater to individuals who require financing for expensive properties or who need to borrow more than the established conforming loan limits.

Jumbo loan requirements often differ from conforming loans due to the increased risk of lending larger money. As a result, borrowers need to prove they can manage and repay the mortgage responsibly, which may involve meeting stricter credit score and down payment criteria and providing extensive documentation of their financial history.

When looking to qualify for a jumbo mortgage, potential borrowers should know that the process typically demands a more thorough evaluation of their financial position than applying for a conforming mortgage. Additionally, these larger loans come with potentially higher interest rates and additional fees, reflecting the non-conforming nature of the loan and the lender's increased exposure to risk.

The Federal Housing Finance Agency (FHFA) has set upper limits for conforming mortgages, meaning any loan amount above these limits is classified as a jumbo loan. Homebuyers who require more significant loan amounts should educate themselves on the requirements of a jumbo mortgage and assess if they can take on the financial responsibility it entails.

Jumbo Mortgage Lenders

When applying for a large mortgage loan, selecting a lender experienced in the type of loan you are looking for is essential to get the best terms and rates. Not all lenders offer jumbo loans, so it is necessary to research which lenders are available in your area. Be sure to explore the terms, rates, and fees offered by different lenders and compare them carefully before deciding. 

Jumbo Refinance Requirements for Jumbo Loans

Jumbo refinance loans present a fantastic opportunity for homeowners who have accumulated home equity and want to capitalize on lower interest rates to decrease their mortgage payments. These refinance typically necessitate the same qualifications as a jumbo mortgage loan, including a minimum credit score, sufficient assets or financial resources, and a debt-to-income ratio of 45% or less. Moreover, lenders may require a more substantial home equity for a jumbo refinance than a conforming loan.

Conforming loans, which adhere to Fannie Mae and Freddie Mac guidelines, have a conforming loan limit determining whether a mortgage can be considered a jumbo loan. To qualify for a jumbo loan, borrowers must meet specific criteria set by the lending institution. By taking advantage of favorable interest rates, jumbo refinancing can help reduce monthly mortgage payments for homeowners with a solid credit score and the financial wherewithal to meet jumbo loan qualifications.

Underwriting Requirements for Jumbo Mortgages

Underwriting is critical to obtaining a jumbo loan in 2023 as lenders continue to assess the potential risk of lending a large sum of money to a single borrower. Jumbo loans are typically large mortgage loans, so lenders must ensure that the applicant can meet the loan's requirements before approval. 

The borrower's credit score, credit report, and income and employment documents will be thoroughly reviewed when applying for a jumbo loan. Lenders must also review other financial documents such as bank statements, tax documents, and asset statements. This allows lenders to assess the borrower's ability to repay the loan, economic history, leverage ratio, and overall debt-to-income ratio. 

The size of a jumbo loan is often determined by the loan limits imposed by the relevant government agency in the borrower's state.

Jumbo loan rates and terms vary by lender, with some offering shorter repayment periods while others provide more favorable jumbo loan rates to borrowers with more substantial financial backgrounds. While it's important to compare these rates, it's also essential to consider the overall economic impact of the loan and the associated closing costs when considering a jumbo loan.

Finally, for those looking to refinance or apply for a jumbo loan, it's essential to research lenders to find the best option. Look for lenders specializing in jumbo loans and offering competitive rates and terms. Potential borrowers should also inquire about the types of jumbo refinance options and consider their budget when looking for the best jumbo mortgage lender.

Alternative Option to Jumbo Loans

A piggyback loan is a type of mortgage that allows you to use two separate loans to finance a home purchase. The first loan is a conforming loan, which is a loan obtained from a traditional lender such as a bank, credit union or mortgage broker. The second loan is a home equity loan.

The primary benefit of a piggyback loan is that it allows you to avoid taking out a jumbo mortgage, which can add thousands of dollars to your monthly payment. Piggyback loans also allow you to avoid the stricter down payment requirements often required by lenders. With a piggyback loan, the conforming loan covers most of the home’s purchase price, while the non-conforming loan covers the remaining amount. 

Keep in mind that lenders typically require a higher credit score for non-conforming loans and a larger down payment. Interest rates for piggyback loans can also be higher than jumbo mortgage loans. Thus, borrowers should consider the costs and benefits before taking out a piggyback loan.


In conclusion, jumbo loan qualifications in 2023 have important implications for anyone considering buying a home. A jumbo loan can offer a larger loan than a conventional loan, making it an attractive option for people who can't qualify for a regular mortgage.

However, it's essential for anyone considering a jumbo loan to assess their overall eligibility and the underwriting process that goes along with it.

Additionally, there are alternative options to jumbo loans that may be more suitable for someone with limited resources. Ultimately, it's essential to research all available options before deciding on a home loan, as it could majorly affect your financial well-being.