Do you need a mortgage for a more expensive home and you're being told that it will require a jumbo loan in order to do it? If so, you'll want to know the following things.

What Makes A Home Require A Jumbo Loan?

Each county has its own limits when it comes to how much you can borrow with a conforming loan. A jumbo loan is necessary when you need to borrow more than what is possible with a conforming loan. Keep in mind that this is not the total value of the home, but the loan value after you provide a down payment. Since conforming loan limits change every single year, it is best to look up what those loan limits are where you live. 

Is The Credit Requirement Different? 

If you previously had no issues qualifying for a conforming loan, know that a jumbo loan is going to be a bit different. This is because jumbo loans are not regulated by Fannie Mae or Freddie Mac, so it is all up to the lender to decide if they want to give you a loan. The higher loan value also means that the lender is going to be more strict with their lending requirements. For example, you may find that one lender is looking for a credit score higher than what you have. This does not mean that you can never get a jumbo loan, but you'll need to shop around to find the right lender for you. 

Is There A Down Payment Requirement? 

Once again, the lender will determine what kind of down payment requirement is required since they are not bound to any federal guidelines. However, you'll typically find that a lower down payment will come with more strict credit requirements in order to get the loan. Provide a larger down payment and it's possible for those credit requirements to loosen up. 

How Is The Interest Rate Different With A Jumbo Loan? 

A jumbo loan doesn't have a fixed interest rate like an FHA, where the interest rate will be the same no matter where you get your loan. The interest rate can be different from lender to lender based on your down payment and credit score. However, interest rates on jumbo loans tend to be close to interest rates for conventional loans.

These are just a few things that you may be wondering about jumbo home loans. Reach out to your local lender for more information about how a jumbo loan would apply to the property you are interested in.