Everything You Need To Know About Rocket Mortgage Jumbo Loans

When looking to buy a high-priced home, you may need to get a jumbo loan Rocket Mortgage offers jumbo loans to help buyers purchase properties that exceed conforming loan limits set by Fannie Mae and Freddie Mac

In this comprehensive guide, we’ll explain what a Rocket Mortgage jumbo loan is, what the requirements are, how to qualify, and more Whether you’re buying your dream home in an expensive market or just need to borrow above conforming limits where you live, read on to see if a Rocket Mortgage jumbo mortgage is right for you

What Is A Jumbo Loan From Rocket Mortgage?

A jumbo loan is a home loan that is above the conforming loan limits set by the Federal Housing Finance Agency (FHFA) each year. The conforming loan limit for a single-family home is $647,200 in most U.S. counties for 2022.

Any mortgage over that amount is considered a jumbo loan. The limits are higher in certain high-cost areas like New York and California.

Rocket Mortgage offers 15-year and 30-year fixed rate jumbo mortgages as well as 7/1 adjustable rate mortgages. Their jumbo loan program is called the Jumbo Smart Loan. It comes with the same online mortgage experience and helpful tools that Rocket Mortgage is known for.

Jumbo Loan Requirements From Rocket Mortgage

Rocket Mortgage has certain eligibility requirements borrowers must meet to qualify for their jumbo mortgage program:

• Down payment – At least 10% down required on loans up to $2.5 million. 15% down on 2-4 unit properties.

• Credit score – Minimum credit score varies by loan term. 30-year fixed requires 680. 15-year fixed and 7/1 ARM require 740.

• Debt-to-income ratio – Your total monthly debt payments, including the new mortgage, cannot exceed 45% of your gross monthly income.

• Loan limits – $2.5 million on 1 unit properties. $3 million on 2-4 unit properties.

• Reserves – Must have reserves equal to 18 months of mortgage payments. Retirement funds can count toward this.

• Property – Primary residence, second home, investment property allowed. Condos and co-ops also eligible.

Compared to conforming loans, jumbos require more cash reserves, a higher credit score, and lower debt-to-income ratio. But the requirements are still reasonable for most luxury home buyers to meet.

Jumbo Loan Rates At Rocket Mortgage

Jumbo mortgage rates at Rocket Mortgage are competitive with average industry rates. As of March 2022, here are sample interest rates:

• 30-year fixed rate jumbo – 4.25%
• 15-year fixed rate jumbo – 3.5%
• 7/1 adjustable rate jumbo – 3.25%

Rates are just slightly higher than conforming loan rates. The rate difference usually ranges from 0.25% to 1% higher for jumbos.

Always comparison shop to find the best jumbo mortgage rates. Applying with multiple lenders also helps ensure you get approved.

How To Qualify For A Rocket Mortgage Jumbo Loan

If you meet the basic requirements outlined above, follow these steps to qualify for a Rocket Mortgage jumbo mortgage:

1. Check your credit scores – It’s key to know your credit score before applying since jumbos require higher scores. Shoot for at least a 680 FICO score before applying. Order your free credit reports and check for errors.

2. Reduce debt – Pay down balances on credit cards and other revolving debts. This helps lower your debt-to-income ratio. Pay off collections or judgements if possible.

3. Gather documents – Have 2 years of W-2s and tax returns, bank statements, investment account statements, and other financial documents ready.

4. Save for your down payment – Come up with at least 10% down by saving diligently and potentially tapping other sources like gifts, grants, or your current home’s equity.

5. Apply online – Complete Rocket Mortgage’s online jumbo loan application and submit all required documents electronically.

6. Lock your interest rate – During underwriting, you can lock in an interest rate for up to 90 days so it doesn’t rise before closing.

Follow these tips and you’ll be on your way to getting approved for a Rocket Mortgage jumbo loan!

Pros And Cons Of Rocket Mortgage Jumbo Loans

Rocket Mortgage jumbo loans have unique advantages but also some potential drawbacks to weigh:

Pros

• Online application and document upload
• Rate locks up to 90 days
• Low 10% down payment on 1 unit properties
• Payoff second mortgages and student loans in reserves
• Refinances available up to $3 million

Cons

• Requires high credit score of 680+
• Manual underwriting so can’t get instant approval
• Higher interest rates than conforming loans
• Must have 18 months reserves
• High minimum loan amount in some markets

Look at both the pros and cons to determine if a Rocket Mortgage jumbo mortgage is your best option.

Alternatives To Jumbo Loans

If you don’t qualify for a jumbo, consider these alternatives for buying a high-priced home:

• Conforming loan – If you can afford a lower priced home, conforming loans have easier requirements.

• Two mortgages – Get a conforming first mortgage and a second mortgage like a home equity loan for the rest.

• Portfolio lender – Smaller lenders that keep loans on their books may offer more flexible jumbos.

• FHA loan – FHA loans limits go up to nearly $1 million in some county limits.

• VA jumbo loan – Eligible veterans can get VA jumbo loans up to $2 million.

• Hard money loan – Asset-based loans from private lenders can help those with past credit issues. Higher rates.

• Sell assets – Tap investments, rental properties, or businesses you own to come up with a larger down payment.

Look at all your options and talk to lender before assuming a jumbo mortgage is your only route. An alternative solution could get you to your homeownership goals.

Common Questions About Rocket Mortgage Jumbo Loans

Many homebuyers considering a jumbo have questions about the details. Here are answers to some frequently asked questions:

How long does approval take?

Jumbo loans require manual underwriting so approval can take 1-2 weeks once you submit a complete application with all documents. Allow extra time during busy markets.

Can I get a jumbo cash-out refinance?

Yes, you can tap your home equity with a cash-out refinance up to $3 million with Rocket Mortgage. Requirements are stricter than purchase or rate-and-term refinance jumbos however.

What fee and closing costs apply?

Jumbos have origination fees of 0-1% and third-party closing costs apply like appraisal and title fees. Fees vary by state and loan amount.

Can I remove PMI with a jumbo?

Yes, you can request PMI removal once you reach 20% equity. An appraisal is required to confirm your home value and current loan-to-value ratio.

How do I check jumbo loan status?

You can check your application status 24/7 by logging into your account. Rocket Mortgage also provides dedicated loan officers to keep you updated.

The Bottom Line – Rocket Mortgage Jumbo Loans Make Sense For Luxury Homes

If you need to buy a high-cost property that exceeds conforming loan limits, a Rocket Mortgage jumbo loan allows you to achieve your dreams of homeownership.

Jumbos offer low down payments, competitive rates, and flexible terms. Rocket Mortgage brings speed and ease to the jumbo process with their online application and support.

Use this guide to understand requirements, benefits, and alternatives before choosing the right loan for your luxury home purchase. With preparation and expert help, you can overcome the hurdles jumbos present and join the ranks of luxury homeowners.