What is the difference between conventional financing and jumbo financing?

If you are financing over $548,250 for your home, its best to know your options.

Conventional High Balance
In 2021, the loan limit on conventional financing is $548,250.  A conventional high balance loan allows you to finance up to $822,375. This type of loan may offer an interest or annual percentage rate (APR) lower than jumbo financing. Like traditional financing, high balance financing may offer down payments as low as 5%, lower FICO scores and higher debt-to-income ratios. If you have less than a 20% down payment, you will be required to pay mortgage insurance (PMI)*. We do offer options that reduce or eliminate PMI. If the home you are purchasing is an existing home with a history of appraised values, you may be able to avoid the cost of an onsite appraisal.

Jumbo Financing
Premia Relocation Mortgage offers a variety of jumbo financing options for loan amounts greater than $822,375. We work with investors who have flexible requirements such as low-down payment options and varying debt to income ratios. We can finance up to $2 million and 90% of the property value with options to avoid or limit PMI.

While some people believe that self-employed borrowers can’t qualify for a jumbo loan, we offer a variety of options that may meet your unique needs. In addition to more flexibility with income requirements for freelancers or business owners, we are now able to consider your assets as part of your income.
Jumbo borrowers should expect their mortgage lender to do a final check on their pre-approval documentation to ensure nothing has changed in their financial situation, as well as last-minute employment verification, before heading to the closing table.

As a reminder, credit scores are important in determining the interest rate that homebuyers or refinancing homeowners receive for a mortgage. The interest rate then impacts the amount of your monthly mortgage payment for the term of your home loan. You can receive a free credit report from each of the credit agencies from so you can see your credit score and check that there are no errors on your credit report before you meet with a mortgage lender.
*Some loans require mortgage insurance if the Loan-to-value exceeds 80%, which will increase the monthly payment.
- Jan 29, 2021