Benefits of a Jumbo Loan
For individuals with higher incomes, obtaining a mortgage can present unique challenges. Those seeking to purchase a more luxurious home will typically require a larger mortgage loan. However, conventional loans often have limits that can make securing the necessary amount more difficult. This is where jumbo loans come into play—as the name implies, a jumbo loan enables qualified borrowers to access significantly larger sums than a standard loan allows. There are several distinct features that set jumbo loans apart from conventional ones.
Let’s explore the benefits of jumbo loans in Utah and discover how our offerings at American Home Loans can meet your needs.
What Is Considered a Jumbo Loan?
The maximum amount you can borrow on a single mortgage, known as the “conforming loan limit,” varies depending on your state or region. The 2024 limit for conventional financing is $766,550. Anything higher than this amount is considered a “jumbo loan.” The main differences between a jumbo vs non jumbo loan is the amount of money that you can borrow.
Is A Jumbo Loan More Expensive?
Yes, jumbo loans typically result in higher monthly payments due to several key factors. Firstly, the principal amount borrowed is significantly larger than that of a conforming loan, leading to higher total repayment amounts. Secondly, lenders often impose higher interest rates on jumbo loans to compensate for the increased risk associated with lending larger sums of money. This increase in interest rates further contributes to the elevated monthly payment. Additionally, jumbo loans often have stricter qualification criteria, which may require a higher credit score, greater financial reserves, and a larger down payment—factors that can add to the overall cost of the loan.
What Is the Required Credit Score for a Jumbo Loan?
Allowing borrowers to well exceed the “conforming loan limit,” does come with a few trade-offs, particularly with jumbo loans and credit score. Firstly, mortgage rates are usually higher due to the larger risk of it being assumed by the lender, and you’ll often need a higher credit score and lower outstanding debt than traditional loans. At American Loans & Mortgages, we typically require a 700 credit score or better for a jumbo loan in Utah.
Jumbo Loan Limit
If you qualify, the key benefit to a jumbo loan is how much more you can get. One of the most common questions we are asked is “what is a jumbo loan amount?” Our jumbo programs range all the way up to $2,000,000 for qualified borrowers and up to 80 percent of home value. Instead of being forced to secure multiple conventional loans, you can get all the funds you need in one shot. To learn more about the jumbo loan limit in Utah, check out our rates page!
Other Jumbo Loan Benefits
There are several other benefits to jumbo loans as well. We offer a lot of flexibility in income qualifications, and many of our jumbo loans come with no private mortgage insurance attached. Fixed rates will often begin as low as 4 percent, and there are no county restrictions in our programs.
Contact American Home Loans for More Information on How Jumbo Loans Work
American Home Loans is the top mortgage company in Utah, dedicated to providing personalized loan solutions that meet your unique financial needs. Whether you’re interested in purchasing a high-value property and require a jumbo loan, or you’re exploring other mortgage options, our experienced team is here to guide you through the process. Our knowledgeable brokers are adept at explaining the nuances of various loan programs, ensuring you have all the information necessary to make informed decisions.
To learn more about our competitive jumbo loans or to explore the wide range of other mortgage programs we offer, reach out to one of our expert brokers today. We’re committed to helping you achieve your homeownership goals with the confidence and support you deserve.