Exceeding conforming loan limits
Jumbo loans are mortgages that exceed the $417,000 loan limit established by regulation in most states for conforming loans, such as those in Colorado. In the highest cost areas, the limit on jumbo loans jumps to $625,500. Jumbo loans are used to purchase high-end, luxury property. Due to the higher loan amount, jumbo loans require a lower debt-to-income ratio (43 percent or less is typical), higher credit score (700 or higher) and a larger down payment than conventional mortgages. Minimum down payment requirements for home purchases with a jumbo loan typically range from 15 to 30 percent. The underwriting process for jumbo loans is similar to the process for a conforming mortgage, with the exception that some jumbo lenders require two appraisals.