Why a Jumbo Loan Might Be the Right Choice for Your Next Home

If you’re looking to buy a high-value property, a jumbo loan could be your solution. Jumbo loans are mortgages that exceed the conforming loan limits set by Fannie Mae and Freddie Mac, making them ideal for buyers in high-cost areas or those seeking luxury homes.

Unlike conventional loans, jumbo loans are not guaranteed by government-backed entities, which means lenders take on more risk. This often results in stricter qualification requirements, including higher credit scores, larger down payments, and more documentation of income and assets. Despite this, jumbo loans allow you to finance properties that might otherwise be out of reach.

Jumbo loans are flexible, available for primary residences, second homes, and investment properties. They can come in fixed or adjustable rates, giving you options to align your mortgage with your financial goals. While the monthly payment may be higher due to the larger loan amount, the benefit of securing the home you want—or expanding your investment portfolio—can far outweigh the cost.

At the River City Lending Team, we help clients navigate the complexities of jumbo loans, ensuring you understand your options, and find the loan that makes the most sense for your unique situation. If your dream home requires a jumbo loan, let’s talk about how we can make it a reality.

FAQs

  • A jumbo loan is a mortgage that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac. These loans are typically used for high-value properties.

  • Limits vary by location, but in most areas, any loan above $726,200 (2025 conforming limits) is considered jumbo. Some high-cost areas allow loans over $1 million. If you need financing above that limit, you’ll need to use Jumbo Financing.

  • Interest rates can be slightly higher than conventional loans because jumbo loans are not guaranteed by Fannie Mae or Freddie Mac, making them riskier for lenders.

  • Most lenders require strong credit—usually a score of 700 or higher—but exact requirements vary.

  • Down payments typically start at 10–20%, but the exact amount depends on the lender, property type, and your financial profile.

  • Yes, many lenders offer jumbo loans for primary residences, second homes, and investment properties, though requirements may be stricter for non-owner-occupied properties.

  • The process is the same, but the product terms can be stricter and more restrictive making them harder to qualify for.

  • Both are available. Fixed-rate loans offer predictable payments, while adjustable-rate mortgages may offer lower initial rates with potential for future adjustment.

  • Monthly payments can be higher due to larger loan amounts and sometimes higher interest rates, but your payment depends on the rate, term, and down payment.

  • Homebuyers looking to purchase high-value properties or properties in high-cost areas, or those who want to leverage larger amounts of capital for real estate investment, are good candidates.