A loan is considered a “jumbo” if it exceeds the federal mortgage limit. What a jumbo loan would be for each individual depends on where they live and what their financial situation is. Typically, jumbo loans are for those who want to purchase more high-end and luxurious properties. To learn more about jumbo loans, keep reading below.

What Is a Jumbo Loan?

Depending on where you are located in the United States, a jumbo loan is any loan that exceeds the federal mortgage limit. The limit would depend per state, but it ranges from around $420,000 to $630,000.

What makes jumbo loans so different is not only that they are much larger than the standard loan. It is because of how big they usually are that they do not come with a Fannie Mae or Freddie Mac guarantee, making it a much higher-risk type of loan.

Do Jumbo Loans Require a Large Down Payment?

As most loans do require a down payment, you may suspect by now that jumbo loans would require a much bigger down payment. This is indeed correct, as most jumbo loans would require about 20-35% down payment on their loans. If you consider not only the percentage but also the total amount, you will see how big of a sum it can be.

While there may be some jumbo loan offerings that require only 5-10% of downpayment, these usually come with much higher interest rates. This is because it would turn out to be a very high-risk loan for the lender.

Can I Get a Jumbo Loan Even If I’m a First-Time Buyer?

Some first-time home buyers may think that the jumbo loan is not an option for them. However, most of the time, lenders do not look whether you are a first-time buyer or if this is your fifth home. Rather, they will assess you based on your credit score and your capacity to pay based on your financial situation.

The most important part about applying for a jumbo loan is being honest with yourself and the lender. You need to ensure that you have the ability to pay off the loan without any risk of being tight on money. You need to make sure that you have a lot of room in your budget in case of an unforeseen circumstance that would require you to adjust your financial situation.

Is Getting a Jumbo Loan a Good Idea?

Regardless if it is a jumbo loan or not, getting a loan will only be a good idea if you can pay for it. So if you know that you have the financial capacity and documents to prove it, then there is no problem with taking out a mortgage at all. However, if you are applying for a loan and you are in a tight financial situation, you may want to re-consider first because you might end up finding yourself snowballing into a lot of debt, and it can be difficult to get out of that.


If you are looking for a way to purchase a more expensive property, a jumbo loan is a good option if you have the money and the willingness to take a risk. While you may have to pay a little more, you can still get a great deal. So if you have the money to cover it, give it a shot and see what a jumbo loan can do for you.

If you are seeking a mortgage company in Utah, Clayson Mortgage is for you. We offer different kinds of mortgage solutions to our clients to help meet their needs without putting them in a tight financial spot. Contact us today to learn more about it.