If you’re shopping for a particularly pricey home or you live in one of the country’s more expensive communities, you may need to obtain a non-conforming mortgage—otherwise known as a jumbo loan. These loans can be useful because they allow you to borrow far more money for a home purchase than traditional mortgages do.
Obtaining a jumbo loan, however, can be challenging because there are stricter underwriting requirements and qualification guidelines than conforming mortgages. Applicants are typically required to have higher credit scores, savings account reserves, and a more substantial down payment. You may also pay a higher interest rate on a jumbo loan than a traditional mortgage. But for those purchasing a luxury property or who are home shopping in a region where home prices are especially steep, jumbo loans are an important option.
