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Mortgages

These are 4 of the best lenders if you need to borrow more than $726,200 to buy a home

Jumbo loans are meant for those who need to borrow more than the conforming loan amount of $726,200.

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Historic row houses in Columbia Heights neighborhood of Washington.
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Mortgages are meant to make the homebuying process a little more affordable if you don't have the money to purchase a home for full price in cash. For 2023, standard mortgage loan amounts typically go as high as $726,200, meaning this is as much as you can borrow to buy a home. However, if you think you'll need to borrow an even higher amount for a home purchase (especially if you live in a higher-cost-of-living area like New York City or Hawaii), your mortgage may be classified as a jumbo loan.

Jumbo loans are mortgages that exceed the conforming loan limit of $726,200 for 2023 (the limit can be higher depending on the area and the type of home). These loans often have stricter qualification standards, like requiring a higher credit score or a much lower debt-to-income ratio. You also typically need to be able to make a down payment of at least 10% or more of the home's value for a jumbo loan.

CNBC Select rounded up a list of some of the best mortgage lenders that offer jumbo loan options. We evaluated lenders based on the types of loans offered, minimum down payment amount and customer support, among other factors (see our methodology below).

Just keep a few things in mind when you're looking to apply for a mortgage. Firstly, mortgage interest rates can fluctuate quite often, however, the rate you are likely to receive will heavily depend on your location, credit score and credit report. While you can take a look at each lender's website to get an idea of what interest rates they charge, the best way to get a solid idea of what you will be charged is to provide the necessary information to check your rate.

The mortgage approval and acceptance process comes with many fees, collectively called "lender fees." These can include an origination fee, processing fee, application fee and an underwriting fee. In addition to lender fees, you may also pay a document preparation fee, an appraisal fee, title search fee, title insurance and more. According to ValuePenguin, lender fees can run you an average of an additional $1,387.

Lastly, it's important to do your homework so you can be sure you're choosing the lender that best suits your needs whether you're a first-time homebuyer or purchasing an investment property. We have included an FAQ section below to help you familiarize yourself with some aspects of the process, but if you have other more specific questions, reach out to a representative or an advisor at your desired lender.

The best mortgage lenders for jumbo loans

Best for lower credit scores

Rocket Mortgage

  • Annual Percentage Rate (APR)

    Apply online for personalized rates

  • Types of loans

    Conventional loans, FHA loans, VA loans and Jumbo loans

  • Terms

    8 – 29 years, including 15-year and 30-year terms

  • Credit needed

    Typically requires a 620 credit score but will consider applicants with a 580 credit score as long as other eligibility criteria are met

  • Minimum down payment

    3.5% if moving forward with an FHA loan

Already have a mortgage through Rocket Mortgage or looking to start one? Check out the Rocket Visa Signature Card to learn how you can earn rewards

Pros

  • Can use the loan to buy or refinance a single-family home, second home or investment property, or condo
  • Can get pre-qualified in minutes
  • Rocket Mortgage app for easy access to your account

Cons

  • Runs a hard inquiry in order to provide a personalized interest rate, which means your credit score may take a small hit
  • Doesn't offer USDA loans, HELOCs, construction loans, or mortgages for mobile homes
  • Doesn't manage accounts for jumbo loans after closing

Who's this for? Rocket Mortgage is one of the biggest U.S. mortgage lenders and has become a household name. Most mortgage lenders look for a minimum credit score of 620, but Rocket Mortgage accepts applicants with lower credit scores at 580.

This lender offers an option called the Jumbo Smart Loan, which is geared toward those who need to borrow a larger amount of money for their home purchase. This loan is offered for up to $3 million. The minimum down payment amount for this type of loan is 10.01%, which is just slightly higher than that of other lenders on this list. One huge draw, however, is that you won't have to pay private mortgage insurance (PMI) on your jumbo loan.

Best for flexible loan options

Chase Bank

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included

  • Types of loans

    Conventional loans, FHA loans, VA loans, DreaMaker℠ loans and Jumbo loans

  • Terms

    10 – 30 years

  • Credit needed

    620

  • Minimum down payment

    3% if moving forward with a DreaMaker℠ loan

  • Terms apply.

  • Offers first-time homebuyer assistance?

    Yes — click here for details

Pros

  • Chase DreaMaker℠ loan allows for a slightly smaller down payment at 3%
  • Discounts for existing customers
  • Online support available
  • A number of resources available for first-time homebuyers including mortgage calculators, affordability calculator, education courses and Home Advisors

Cons

  • Doesn't offer USDA loans or HELOCs
  • Existing customers discounts apply to those who have large balances in their Chase deposit and investment accounts

Who's this for? For those interested in conforming loans (loans for $726,200 or less), Chase offers a slew of options, including a loan option called the DreaMaker loan. It allows homebuyers to make a down payment that's as low as 3%. (By comparison, the FHA loan requires borrowers to make a 3.5% down payment.)

If you're going for a jumbo loan and need to borrow more than $726,200, Chase still has options that try to make it as affordable as possible. Existing Chase customers can qualify for an APR discount of up to 0.5% as part of their Relationship Pricing Program for mortgages. To qualify, you need to have at least $500,000 in a Chase deposit account.

Chase also offers an interest-only mortgage option for jumbo loans. With this option, you'll pay a fixed interest rate for the first 5, 7 or 10 years, and you choose your term. During this period, you're only required to pay the interest. With other traditional mortgage options, you must pay the principal and the interest amount. After the initial term, you'll get a variable rate with the principal amount for the next 20 years.

Additionally, if you don't close on your jumbo loan on time, Chase will give you $5,000.

Best for no fees

Ally Home

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included

  • Types of loans

    Conventional loans, HomeReady loan and Jumbo loans

  • Terms

    15 – 30 years

  • Credit needed

    620

  • Minimum down payment

    3% if moving forward with a HomeReady loan

Terms apply.

Pros

  • Ally HomeReady loan allows for a slightly smaller downpayment at 3%
  • Pre-approval in just three minutes
  • Available in all 50 U.S. states
  • Online support available
  • Doesn't charge lender fees

Cons

  • Doesn't offer FHA loans, USDA loans, VA loans or HELOCs

Who's this for? It's common for lenders to charge a number of fees on mortgage applications, including an application fee, origination fee, processing fee and underwriting fee — which end up costing a significant amount during the homebuying process. Even when applying for a jumbo loan, Ally Bank doesn't charge lender fees, so you won't pay for the application, origination, processing or underwriting.

Ally offers down payment options for a jumbo loan as low as 10.01%, and you can choose between adjustable-rate and fixed-rate mortgages. Homebuyers can also submit their online application in just 15 minutes as long as they have all the necessary documents handy.

Best for discounts and no PMI

SoFi

  • Annual Percentage Rate (APR)

    Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included

  • Types of loans

    Conventional loans, jumbo loans, HELOCs

  • Terms

    10 – 30 years

  • Credit needed

    620

  • Minimum down payment

    3%

Terms apply.

Pros

  • Fast pre-qualification
  • Provides access to Mortgage Loan Officers for guidance
  • 0.25% price reduction when you lock in a 30-year rate for a conventional loan
  • Offers up to $9,500 cash back if you purchase a home through the SoFi Real Estate Center

Cons

  • Doesn't offer FHA, VA or USDA loans
  • Mortgage loans are not available in Hawaii

Who's this for? SoFi offers jumbo loans for up to $2.5 million, according to the lender's website. This lender also allows you to make a down payment that's as low as 10%. Regardless of your down payment amount, however, you won't be charged PMI. Borrowers who go with a SoFi jumbo loan can choose between a 30-year or 15-year fixed-rate mortgage.

Mortgage FAQs

1. What is pre-approval and how does it work?

Pre-approval is a statement or letter from a lender that details how much money you can borrow to purchase a home and what your interest rate might be. To get pre-approved, you may have to provide bank statements, pay stubs, tax forms and employment verification, to name a few. Once you're pre-approved, you'll receive a mortgage pre-approval letter, which you can use to begin viewing homes and start making offers. It's best to get pre-approved at the start of your homebuying journey before you start looking at homes.

2. How do mortgages work?

A mortgage is a type of loan that you can use to purchase a home. It's also an agreement between you and the lender that essentially says that you can purchase a home without paying for it in full upfront — you'll just put some of the money down upfront (usually between 3% and 20% of the home price) and pay smaller, fixed equal monthly payments for a certain number of years plus interest.

For example, you probably can't pay $400,000 for a home upfront, however, maybe you can afford to pay $30,000 upfront; a mortgage would allow you to make that $30,000 payment while a lender gives you a loan for $370,000 (the remaining amount) and you agree to repay that amount plus interest to the lender over the course of 15 or 30 years.

Keep in mind that if you choose to put down less than 20%, you'll typically be subject to private mortgage insurance (PMI) payments in addition to your monthly mortgage payments. However, you can usually have the PMI waived after you've made enough payments to build 20% equity in your home.

3. What is a conventional loan?

A conventional loan is a mortgage that's not backed by a government agency. It's the most common type of loan and some lenders may require a down payment as low as 3% or 5% for this loan.

4. What is an FHA loan?

A Federal Housing Administration loan (FHA loan) is a loan that typically allows you to purchase a home with looser requirements. For example, this type of loan may allow you to get approved with a lower credit score and applicants may be able to get away with a higher debt-to-income ratio. You typically only need a 3.5% down payment with an FHA loan.

5. What is a USDA loan?

A USDA loan is a loan offered through the United States Department of Agriculture (USDA) and is aimed at individuals who want to purchase a home in a rural area. A USDA loan requires a minimum down payment of 0% — in other words, you can use this loan to buy a rural home without making a down payment.

6. What is a VA loan?

A VA loan is provided through the U.S. Department of Veterans Affairs and is meant for service members, veterans and their spouses. They require a 0% down payment and no mortgage insurance.

7. What is a jumbo loan?

Homebuyers who need to borrow more than $726,200 to purchase a single-family home (in most areas) will need to qualify for a jumbo loan. Jumbo loans typically have stricter borrower requirements and you must have a larger down payment compared to other types of mortgage loans.

8. How is my mortgage rate decided?

Mortgage rates change almost daily and can depend on market forces such as inflation and the overall economy. While the Federal Reserve doesn't set mortgage rates, mortgage rates tend to move in reaction to actions taken by the Fed on its benchmark rate.

Market forces may influence the general range of mortgage rates but your specific mortgage rate will depend on your location, credit report and credit score. The higher your credit score, the more likely you are to be qualified for a lower mortgage interest rate.

9. What is the difference between a 15-year and a 30-year term?

A 15-year mortgage gives homeowners 15 years to pay off their mortgage in fixed, equal amounts plus interest. By contrast, a 30-year mortgage gives homeowners 30 years to pay off their mortgage plus interest. With a 30-year mortgage, your monthly payments will be lower since you'll have a longer period of time to pay off the loan. However, you'll wind up paying more in interest over the life of the loan since interest is charged monthly. A 15-year mortgage lets you save on interest but you will likely have a higher monthly payment.

Our methodology

To determine which mortgage lenders are the best, CNBC Select analyzed dozens of U.S. mortgages offered by both online and brick-and-mortar banks, including large credit unions, that come with fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.

When narrowing down and ranking the best mortgages, we focused on the following features:

  • Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed-rate APR, you lock in an interest rate for the duration of the loan's term, which means your monthly payment won't vary, making your budget easier to plan.
  • Types of loans offered: The most common kinds of mortgage loans include conventional loans, FHA loans and VA loans. In addition to these loans, lenders may also offer USDA loans and jumbo loans. Having more options available means the lender is able to cater to a wider range of applicant needs. We have also considered loans that would suit the needs of borrowers who plan to purchase their second home or a rental property. 
  • Closing timeline: The lenders on our list are able to offer closing timelines that vary from as promptly as two weeks after the home purchase agreement has been signed, to as many as 45 days after the agreement has been signed. Specific closing timelines have been noted for each lender.
  • Fees: Common fees associated with mortgage applications include origination fees, application fees, underwriting fees, processing fees and administrative fees. We evaluate these fees in addition to other features when determining the overall offer from each lender. Though some lenders on this list do not charge these fees, we have noted any instances where a lender does charge such fees. 
  • Flexible minimum and maximum loan amounts/terms: Each mortgage lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
  • No early payoff penalties: The mortgage lenders on our list do not charge borrowers for paying off the loan early. 
  • Streamlined application process: We considered whether lenders offered a convenient, fast online application process and/or an in-person procedure at local branches. 
  • Customer support: Every mortgage lender on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
  • Minimum down payment: Although minimum down payment amounts depend on the type of loan a borrower applies for, we noted lenders that offer additional specialty loans that come with a lower minimum down payment amount. 

After reviewing the above features, we sorted our recommendations by best for lower credit scores, flexible loan options, no fees and discounts and no PMI.

Note that the rates and fee structures advertised for mortgages are subject to fluctuate in accordance with the Fed rate. However, once you accept your mortgage agreement, a fixed-rate APR will guarantee interest rate and your monthly payment will remain consistent throughout the entire term of the loan, unless you choose to refinance your mortgage at a later date for a potentially lower APR. Your APR, monthly payment and loan amount depend on your credit history, creditworthiness, debt-to-income ratio and the desired loan term. To take out a mortgage, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.

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Information about the Sofi Checking and Savings has been collected independently by Select and has not been reviewed or provided by the issuer prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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