If you’re looking to purchase a luxury home that is much more than the standard home value in your county, a jumbo loan may be your best option for securing financing. This is because these types of homes exceed the conventional conforming loan limits set by the Federal Housing Finance Agency (FHFA), which disqualifies them from traditional financing options.

While jumbo home loans are designed for those looking to purchase high-value homes, they are also typically associated with stricter requirements that make them more difficult to qualify for. That said, Griffin Funding is dedicated to making home loans more accessible to borrowers, offering competitive interest rates, more flexible terms, and five-star service.

What Is a Jumbo Loan?

If you are unfamiliar with the different types of mortgage options, you may be wondering what a jumbo loan is. The jumbo loan definition is that it is a type of home loan that allows borrowers to qualify for a mortgage that exceeds the conforming loan limits. The 2025 conforming loan limit is $806,500 in most states and $1,209,750 in high-cost areas. 

Put simply, a jumbo loan, also known as a jumbo mortgage, will offer high-end financing that traditional loans cannot. Using a jumbo mortgage loan, you can finance luxury real estate or buy a home in a competitive and expensive market.

 

 


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Primary Residence
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Second Homes
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Investment properties

Jumbo Loans: Requirements and Qualifications

As mentioned, jumbo loans generally have much stricter requirements because borrowers are being approved for a larger sum. Here are some of the most important jumbo loan requirements and qualifications to make note of:

  • Credit Score: Jumbo mortgages are not designed for high-risk borrowers. Instead, they are restricted to those who are fiscally equipped to repay such a large sum. For this reason, a higher credit score may be required. In many cases, this would be a good or even excellent credit score (700 or above).
  • Debt-to-Income Ratio: The debt-to-income ratio (DTI) is the percentage of debt you have compared to your income. Typically, the lower your DTI, the better. Some traditional home loans may allow up to 55% DTI, however jumbo loan applicants will typically need theirs to be significantly lower. In many cases the required DTI for jumbo mortgages must be lower than 43%—or sometimes even 36%.
  • Cash Reserves: In order to qualify for a jumbo mortgage, lenders typically want you to have substantial savings or liquid assets (that can be easily converted to cash). This should usually be enough to cover several months or even a year’s worth of mortgage payments.
  • Documentation of Financial Health: Before approving your loan application, your lender will likely request your W-2 tax forms and other documentation to verify your income and ensure you have substantial cash reserves. For those who are self-employed, this may be cause for concern as your total income is not always reflected through these types of financial documentation. However, at Griffin Funding, we can verify this information for self-employed borrowers using bank statements and other alternative income verification methods.
  • Property Appraisal: Before final loan approval on your jumbo home loan, you will typically need to schedule a property appraisal to confirm the value of the property and the soundness of the structure. For jumbo loans, you may also need a secondary appraisal.
  • Down Payment: How much is a jumbo loan down payment? Typically, a larger down payment will be required for jumbo loans because the lender is taking a larger risk by approving financing on a high-value property. A standard jumbo loan minimum down payment is 20%. However, down payment requirements vary based on personal financial circumstances, the cost of the home, and other loan terms. We do offer near miss jumbo loans with a down payment as low as 10% in some cases.

Jumbo vs. Conforming Loan Comparison

A jumbo loan is sometimes called a non-conforming or non-agency mortgage. This is because you do not have to follow the guidelines of Fannie Mae and Freddie Mac, which are government-sponsored entities (GSEs) that create standards for down payment, credit score, post-closing reserves, and loan amount.

Federal Housing Finance Agency (FHFA) Limits 

For 2025, the conforming loan limit is $806,500 in most areas, but goes as high as $1,209,750 in high-cost regions. However, unlike conforming loans, jumbo mortgages are not required to fall within these limitations. This is why this is the recommended loan type for luxury homes.

Jumbo Loan Rates

In today’s market, most jumbo loans are 30 year or 15 year fixed-rate mortgages. An adjustable-rate mortgage is one where your interest rate is set for a certain number of years (usually five or seven) and then after that period, the interest rate can increase or decrease based on market conditions. A fixed-rate mortgage is a loan that maintains the same interest rate over the life of the loan, whether that’s 15 or 30 years.

Jumbo loan rates are typically comparable to conforming loan rates, but several factors can influence the exact rate a borrower qualifies for. When comparing jumbo vs. conventional loans, lenders assess financial stability, market conditions, and loan specifics to determine the level of risk and set appropriate interest rates.

  • Credit Score: Borrowers with higher credit scores (typically 700+) are more likely to secure lower interest rates, while lower scores may result in higher rates or stricter loan terms.
  • Loan Amount: The size of the jumbo loan can affect rates, as larger loans may carry slightly higher interest rates due to increased lender risk.
  • Down Payment: A larger down payment (typically 20% or more) can help lower the interest rate by reducing the lender’s risk.
  • Debt-to-Income (DTI) Ratio: A lower DTI ratio (below 43%) demonstrates financial stability and can help borrowers qualify for more competitive rates.
  • Loan Type (Fixed vs. Adjustable): Fixed-rate jumbo loans often have higher initial rates compared to adjustable-rate jumbo loans (ARMs), which may start lower but can increase over time.
  • Market Conditions: Interest rates fluctuate based on economic factors, Federal Reserve policies, and overall demand in the mortgage market.
  • Cash Reserves: Lenders may require 6-12 months of cash reserves to cover mortgage payments, and having more reserves can result in better loan terms.

Pros and Cons of Jumbo Loans

For the right borrower, there are a variety of benefits of securing a jumbo loan—above and beyond being able to afford a luxury home. Below are some of the key pros and cons to take into account as you consider applying for a jumbo loan:

Pros

  • Higher Loan Limits: Jumbo loans allow borrowers to finance high-value homes that exceed conventional loan limits, making them ideal for buyers in luxury markets or real estate investors interested in buying high-end or multi-unit properties. These loans are a high-net-worth lending tool, offering affluent individuals the ability to secure larger financing amounts for luxury homes and properties.
  • Flexible Financing Options: Some lenders offer fixed-rate and adjustable-rate jumbo loans, giving borrowers options to choose the best structure for their financial situation.
  • Competitive Interest Rates: Borrowers with strong credit, low debt-to-income ratios, and substantial assets may qualify for interest rates comparable to or even lower than conventional loans.
  • No Private Mortgage Insurance (PMI) Requirement: Unlike conventional loans, many jumbo loans do not require PMI, even with a down payment below 20%, which can help reduce monthly payments.
  • VA Jumbo Loans: Eligible veterans and active-duty military members can benefit from VA jumbo loans, which offer competitive rates and the possibility of 100% financing for qualified buyers.

Cons

  • Stricter Qualification Requirements: Lenders typically require higher credit scores (often 700+), lower DTI ratios, and larger cash reserves, making it more difficult to qualify.
  • Larger Down Payment Needed: Many lenders require at least 10-20% down, which can be a significant upfront cost compared to conventional loans that allow for lower down payments.
  • Higher Closing Costs and Fees: Jumbo loans often come with higher origination fees, appraisal costs, and stricter underwriting, increasing the overall cost of obtaining the loan.
  • Potentially Higher Interest Rates: While competitive rates are possible, some borrowers may face higher interest rates compared to conventional loans, especially if they have borderline qualifications.
  • Near Miss Jumbo Loans: For those who nearly qualify for a jumbo loan but fall just short of the required limits, a near miss jumbo loan could provide an option to secure financing, though it may come with slightly higher rates or stricter terms.

Have more questions about how jumbo loans work or want to find out if you qualify? Speak with one of our knowledgeable loan officers today or use the Griffin Gold app to easily get started and explore your loan options.

Apply for a Jumbo Loan Today

Don’t lose hope on purchasing your dream home because it won’t qualify for a regular mortgage. Apply for a jumbo mortgage loan with Griffin Funding. We’ll work with you to make getting a jumbo loan as straightforward as possible.