This is a different mortgage loan all together. Basically this is a very high money loans and the interest rates for this type is usually higher than the conventional loans. Jumbo loans are also called as non conforming loans. Since, these loans carry very high amount, Fannie Mae, Freddie Mac and large financial institutions like government agencies do not prefer these loans. Since these loans exceed the normal level of loan limits they carry more risk also than conventional loans. Normally the conventional loan limits are till $250,000 and not more than that but the jumbo loans are all lot more than that. So due to the nature of the jumbo loans they are very rarely found in the housing market.
Since these jumbo loans carry very high loan limits than any other type of loans, it needs very good credit score to qualify for jumbo loan to issue. Minimum credit score for this loan to qualify is 680 and usually the financial agencies require credit score of 700. Now a days, as the financial crises are lifting every where, the financial agencies may not afford this huge loan limits. So they demand very good credit score which is around 750 or more than that some times.
Jumbo mortgage requires more down payments comparatively. This mortgage requires 20-25 percentages in most of the real estate markets where as it is very much flexible in the conventional loans. If you are deciding to take jumbo loan, make sure you have to consider all your income and expenses and your ability to repay the mortgage loan before going to make a large pledge. Because the repayment would be just a double or triple in compare to other loans.
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