Jumbo Loan Down Payment Minimum

Although homebuyers can access these programs nationwide, the specific loan requirements may vary slightly from state to state. The 5% down options are available for refinancing loans as well as Jumbo purchase transactions. Home buyers will want to be aware of the crucial loan application requirements, which are all detailed below. Please call us at (800) 962-0677 seven days a week if you have any questions, or you can use the Quick Contact form on this page.

Freddie Mac and Fannie Mae, the government-sponsored organizations that buy loans from lenders and banks, have established conforming (conventional) loan limits. In the majority of U S. In states like Texas, Illinois, Arizona, and others, Fannie Mae and Freddie Mac have set a $726,200 conforming limit for 2023. For specified high-cost locations in California, Hawaii, Colorado, NYC, Florida, etc., this cap rises to $1,089,300.

5% Down Jumbo Loan Benefits:

For home buyers looking for more expensive luxury homes, jumbo loans are ideal. By covering the entire cost of the loan, these loans are intended to make it simpler for borrowers to purchase homes in pricey markets without depleting their cash reserves. Similar to conventional mortgages, jumbo loans can be obtained with a 30, 15, or 3/1, 5/1, 7/1, or 10/1 ARM adjustable rate term.

Due to the increased risk borne by the lender or bank, interest rates on higher loan-to-value jumbo programs have been slightly raised. However, as the secondary market keeps growing and becomes more liquid, the interest rate difference between jumbo and conventional mortgages has been narrowing more.

No PMI (Monthly Mortgage Insurance) requirements

Both 80-15 combo loans and a single 95% LTV jumbo loan are offered – along with an array of 90%, 80-10 options

Fix or adjustable rates are available with no “early payoff” or prepayment penalties.

Approval Requirements 5% Down Jumbo Mortgage:

The criteria for a jumbo loan’s loan approval are discussed below. To qualify, a borrower should expect:

Minimum 5 percent down payment

Minimum 680 credit score to qualify for any jumbo loan programs. 720 credit score may be required for higher loan amounts that exceed $2 mil

Full income documentation is required for income and assets ( tax returns and/or W2’s for regularly employed borrowers)

The maximum borrower-debt ratio should not be more than 45 percent

Homebuyers should have at least 3-6 months’ worth of mortgage payment reserves (after down payment) in a documented account after closing. Oftentimes non-liquid investment retirement accounts like IRA and 401K do satisfy this requirement. Lenders like to see borrowers’ reserves as it enables them to ensure that the borrower has the ability to make monthly loan payments. The exact amount can vary depending on the loan amount, and the borrower’s credit profile, among other factors. Higher loan amounts exceeding $2mil will generally require greater reserves.

Eligible properties include single-family homes, townhomes, and select condos used as primary residences. Vacant land, farms, and investment properties are not eligible.

Jumbo Down Payment & Loan Limit Caps:

Both jumbo purchases and rate-reduction refinances are eligible for these programs.

95% Jumbo Financing – 5% down available up to $2,000,000 *depending on location. (700 credit required)

90% Jumbo Financing – 10% down available up to $3,000,000 (700 credit required)

85% Jumbo Financing – 15% down available up to $3,500,000 (720 credit required)

Buyers can expedite their request (7 days a week) by filling out the Quick Contact form on this page if they want to learn more about qualifying.

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Questions? Please submit the Quick Contact Form on this page to connect with a specialist 7 days a week.

FAQ

Can you put down 5% on a jumbo loan?

Does a Jumbo Loan still require a 20% down payment? No longer. As little as 5% down is required to qualify for a jumbo loan. Of course, there are limitations such as credit, income, and loan amount caps, but there are options available, and the rates are extremely competitive.

Can you put 3.5 down on a jumbo loan?

Jumbo financing options have continued to expand in 2022. The resulting increase in financing LTV limits from 95% to 96 5%. This new 3. Jumbo loans with 5% down have a few extra qualifying requirements not present in programs with higher down payments.

Are jumbo loans harder to qualify?

Jumbo mortgages are substantial loans that exceed the federal loan cap. These loans can offer competitive interest rates, but they are typically more difficult to qualify for than conforming loans. They’re also an easy way for borrowers to obtain the funds they require to buy pricey homes.

How can I avoid PMI on a jumbo loan?

Making a down payment that is at least one-fifth of the home’s purchase price, or 80% of the mortgage’s loan-to-value (LTV) ratio, is one way to avoid paying PMI. For instance, if your new house costs $180,000, you would need to make a down payment of at least $36,000 to avoid paying PMI.