When it comes time to buy or build your dream home, a conventional mortgage may not be the best option. For so many, finally purchasing their dream home means years of saving and preparing so that higher price tag isn’t a problem — it’s a way to make sure your home has everything you want and need. If the home you’re after has a price tag above the “conforming” loan limits set by government-sponsored loan entities, you’ll be hard-pressed to get approval for a conventional mortgage in the amount you need. Instead, a jumbo mortgage will likely be the better option for you.

As you probably imagine, jumbo mortgages are called this because they offer larger than average loan amounts. Jumbo mortgages are a subset of home loans issued by private lenders rather than government entities. Because jumbo mortgages are held by private institutions, there are fewer limits on how large a loan you can apply for. It also means jumbo mortgage lenders aren’t restricted by the same eligibility requirements set by government-backed loans. Often, this means higher loan amounts, better interest rates, and smaller down payment requirements.

Since jumbo mortgages are offered through private lenders, there isn’t a single set of limits or requirements across the board. Each lender gets to choose their own requirements, though they will follow similar guidelines as an industry best practice. Many of those requirements will depend on the amount of the loan you’re requesting as well as the amount you will provide for a down payment. Generally speaking, you’ll need to have a fair to good credit score and, as with any loan, it’s worthwhile to take a bit of time to raise your credit score if you can. A consistent income is also going to help you get a better interest rate, as will a low debt-to-income ratio. In particular for jumbo mortgages, you’ll need to have plenty of documentation to show potential lenders that you have enough income and assets to afford the monthly payments plus insurance, property taxes, and other expenses.

Since there is no single set standard for jumbo mortgages, the best way to find the right option for you is to work with a mortgage lender who works with multiple different lenders, like the team at Patriot Home Mortgage. Get in touch with our team to explore your home financing options, including jumbo mortgage options, and get a personalized quote.