For 2022, the conforming loan limit is $647,200 in most areas but can go as high as $970,800 for places deemed to be high-cost counties. Conforming loan limits vary by location, and any home loan over the limit in your area would be considered a jumbo loan. Because jumbo loans have more stringent requirements than other loan programs, jumbo mortgage rates are on par and sometimes lower than conventional mortgages. Learn more about how jumbo mortgages work, the benefits these types of loans offer, and how to qualify for the best jumbo mortgage rates.
Today’s Best Jumbo Mortgage Rates
When you apply for a jumbo loan, the process is the same as any other mortgage. The loan goes through an underwriting process in which the lender looks at your credit score, debt-to-income ratio, and other financial factors. The key difference is that with a jumbo loan, lenders have stricter requirements because the amount you’re borrowing is much higher. For example, applicants might have to meet additional eligibility criteria, such as having larger cash reserves or providing extra documentation. Jumbo mortgage borrowers also usually have higher closing costs, and you might have to make a larger down payment than is required with some other types of home loans. There are different term lengths available on jumbo loans, with 30-year mortgages being the most common. They have either fixed or adjustable rates. Because lenders are taking on more risk, jumbo loans typically have higher qualification standards than conforming loans. Qualifications may vary by lender, but you expect a higher credit score requirement than you’d need for a conventional or government-backed loan. In addition, because you have to meet tougher standards, jumbo mortgage rates tend to be comparable to and sometimes even lower than conforming loans. Finally, with jumbo mortgages, you may not be required to pay private mortgage insurance (PMI), which protects your lender if you default on the loan. PMI is not required on conventional mortgages if you make a down payment of 20% or if you have more than 20% equity. And some lenders don’t require PMI for jumbo mortgages even if the lender has lower down payment standards. VA-backed home loans have no limits on the amount you can borrow, as long as you meet income and credit history requirements, and they don’t require a down payment. In general, if a mortgage amount is less than the loan limits, it is considered a conforming loan. Loans above that limit are jumbo mortgages.
Credit score: A higher credit score demonstrates a more responsible credit user, so lenders will offer you lower rates.Debt-to-income ratio: The lower your debt-to-income ratio (DTI), the more confident the lender will feel that you have the ability to make your loan payments.Down payment: The more you put down, the more equity you will have in the home. Putting down a large amount of cash often leads to lower rates.
Once you’re confident in your financial standing, try to get quotes from a few lenders to ensure you’re getting the best possible jumbo mortgage rates for your current situation. Next, we looked at the lowest rates available from more than 200 of the nation’s top lenders to mimic the results an actual consumer would get when shopping for a jumbo mortgage. Keep in mind that mortgage rates can change frequently, and this data is for informational purposes only. Your own personal credit and income profile will determine the interest rates available to you. Loan rates do not include additional taxes or insurance premiums, and lender terms vary.
