Jumbo Loan Requirements: What You Need to Know 

Written by Banks Editorial Team
3 min. read
Written by Banks Editorial Team
3 min. read

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Are you looking to purchase a home with a hefty price tag? If you need to borrow more than the conforming loan limit, which is the maximum amount permitted in your local area for conventional mortgage products, a jumbo loan could be an option. Read on to learn how they work, what you’ll need to qualify and a mortgage lender worth considering when you’re ready to move forward with purchasing the property. 

Traditional and NQ Mortgage Loans

Are you looking to finance a home too expensive for a conventional loan? An Angel Oak Jumbo Loan can provide financing for up to $3.5 million.

What Is a Jumbo Loan?

A jumbo loan is a mortgage product that caters to prospective buyers looking to borrow an amount that’s higher than the conforming loan limit. For the year 2022, it’s $647,2000 for a one-unit property in most areas. This amount increases to $970,800 in high-cost areas. 

You can expect more stringent qualification criteria with jumbo mortgages. Still, it’s a viable option as it allows you to borrow a large amount without having to put down a massive down payment to meet the conforming loan limit in your area. Furthermore, you won’t have to pay mortgage insurance. 

Jumbo Loan Limits

Unlike conventional products, jumbo loans are not subject to the conforming loan limits established by the Federal Housing Finance Agency (FHFA). In fact, loan amounts of up to $3.5 million are permitted through lenders like Angel Oak Home Loans. 

Jumbo Loans vs. Conforming Loans

Although jumbo loans and conforming loans have many similarities, there are also some key differences to be aware of:

  • Minimum credit score: You could qualify for a conforming loan with a credit score as low as 620. However, the minimum credit score requirement for jumbo loans is typically higher – most lenders prefer at least a credit score no lower than 680 or 700. 
  • Minimum down payment: The lowest permissible down payment on a conforming loan is 3 percent or 20 percent if you’re looking to avoid mortgage insurance, but you’ll need between 10 percent and 30 percent for a jumbo loan. 
  • Maximum debt-to-income ratio (DTI): Your DTI is the percentage of your monthly income that’s used to cover your mortgage payment and other outstanding debt obligations. It’s capped at 50 percent for conforming loans and up to 43 percent for jumbo loans. 
  • Closing costs: Expect slightly higher closing costs for jumbo loans. 

Is A Jumbo Loan Right for You?

A jumbo loan could be a good fit if you have an excellent credit score, a steady source of income, a manageable debt load and an adequate sum of money saved up. But, of course, you should also be in good financial health before you apply. But if you check no to any of these boxes, it’s best to hold off. 

Jumbo Loan Requirements

If you decide a jumbo loan is a good fit to purchase your next home, familiarize yourself with the general requirements before you apply. 

Credit Score 

As mentioned above, you’ll generally need a credit score of at least 680 (or 700) to qualify for a jumbo loan. The lender will also examine your credit report to determine if any negative items are present. These include late payments, missed payments, delinquent accounts, bankruptcies and foreclosures. Depending on the severity of the item and the amount of time that’s passed, your loan application could be denied. 

Debt-to-income Ratio

Although a DTI of up to 43 percent may be acceptable to the lender, a lower DTI could increase your approval odds since it demonstrates to lenders that you have the means to comfortably afford your mortgage payments. On the other hand, if your DTI is on the higher end, you could still be a good fit for the loan you’re applying for if you have a strong credit score or hefty cash reserves. 

Traditional and NQ Mortgage Loans

Are you looking to finance a home too expensive for a conventional loan? An Angel Oak Jumbo Loan can provide financing for up to $3.5 million.

Down Payment

Prepare to make a down payment of at least 10 percent. If you can afford to put down more money, it won’t hurt. You’ll get a more affordable monthly payment, and your interest rate may be lower. 

Cash Reserves 

Your cash reserves should be adequate enough to cover between six and 12 months of mortgage payments. The lender will also want to see enough cash in your bank account to make your down payment and cover closing costs for the home purchase. 


When you’re ready to apply, gather these documents to help streamline the process: 

  • W-2s and tax returns for the past two years
  • Two most recent pay stubs 
  • Two most recent bank statements 
  • Financial statements for other forms of income, including bonuses, investment earnings and commissions 
  • A year-to-date profit and loss statement (if you’re self-employed) 

There’s always a chance the lender will request more information, but these documents are a good starting point to get the review process going. 


Before the underwriter can issue a “clear to close,” an appraisal is required to confirm the property’s value. This figure is used to compute the loan-to-value (LTV) and ensure it’s reasonable. 

Where To Get a Jumbo Loan

It can be challenging to find the right lender to secure a jumbo loan. Fortunately, Angel Oak Home Loans works hard to provide a seamless experience to qualified borrowers looking to purchase a home that exceeds the conforming loan limits set by the Federal Housing Finance Agency. 

There are three jumbo loan products that can be upset to purchase or refinance properties, to choose from: 

  • Gold Prime Jumbo Loan: Borrow up to $3.5 million with as little as 10 percent down to purchase a primary residence, second home or investment property. Your debt-to-income (DTI) ratio cannot exceed 50 percent, and there’s a minimum seasoning period of seven years if you have a past bankruptcy, deed-in-lieu, foreclosure or short sale.
  • Prime Jumbo Loan: The loan amount is capped at $3 million, and the same seasoning requirements for adverse credit items apply.
  • Non-QM Platinum Jumbo Loan: Also limited to $3 million, this loan product is a bit more flexible as you may qualify for a loan with the most recent tax return. It also has a seasoning period of just four years.

If you’re looking to buy a more affordable home that doesn’t warrant a jumbo loan. Angel Oak Home Loans can also assist you with your home buying needs. Submit an online inquiry today to discover other mortgage products that may be available to you.

Angel Oak

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