When it comes to purchasing a home, buyers may have difficulty finding financing beyond the conforming loan limit. In this instance, you may need to apply for a jumbo loan. Whether your sights are set on a new construction home in Boise or a cabin home in McCall, let’s break down what a jumbo loan is in Oklahoma, the 2023 conforming loan limits, and what’s needed to qualify for this type of loan.
What is a jumbo loan?
What exactly is a jumbo loan in Idaho? A jumbo loan is a specialized type of mortgage that comes into play when you’re seeking financing for a home that surpasses the conforming loan limits (CLL) established by the Federal Housing Finance Agency (FHFA). Typically, this type of loan is necessary for upscale, luxurious properties or those situated in pricey housing markets.
If you need to borrow more than the conforming loan limit, you’ll need a jumbo loan. Idaho jumbo loans allow you to borrow more money to buy a more expensive home, but they also come with higher interest rates and stricter requirements than conventional loans.
What is the jumbo loan limit in Idaho?
In 2023, the conforming loan limit for a single-family home in most U.S. markets is $726,200. However, this limit can be higher in areas where the median home price is significantly above the national average.
- $726,200 is the conforming loan limit in most Idaho counties
- $1,089,300 is the maximum limit in Idaho’s more expensive counties
Keep in mind that the amount being borrowed is what determines whether or not you’ll need a jumbo loan, not the price of the home. So, if you were to put $50,000 down on a $750,000 home in Boise County, the mortgage would be $700,000, which is under the conforming loan limit for this area. In this case, your loan wouldn’t be considered a jumbo loan.
The following counties in Idaho have a conforming loan limit beyond $726,200 for 2023:
| County | Conforming Loan Limit |
| Blaine County | $740,600 |
| Camas County | $740,600 |
| Teton County | $1,089,300 |
To identify the conforming loan limits where you’re considering buying a home in Idaho, check out this FHFA map.
What are the requirements for a jumbo loan in Idaho?
As previously mentioned, the requirements for a jumbo loan are much more stringent than a conforming loan. The specific requirements can vary from lender to lender, but below are the typical requirements for borrowers seeking a jumbo loan in Idaho.
Higher credit score: When it comes to applying for a jumbo loan, credit score requirements are typically more stringent than for conventional mortgages. While some lenders may be willing to accept a lower score, a credit score of at least 720 is generally required to qualify for a jumbo loan. It’s important to have a strong credit profile and a solid financial history to increase your chances of being approved for a jumbo loan.
Larger down payment: Buying a high-priced home usually requires a larger down payment from the buyer. Conventional loans may offer programs for down payments as low as 3%- 5%, but jumbo loans require a minimum down payment of 10%, with some lenders requiring up to 30%. If the homebuyer puts down less than 20%, they will likely need to pay for private mortgage insurance (PMI).
More assets: Idaho jumbo loan borrowers are typically required to have additional assets. In particular, lenders may require borrowers to demonstrate sufficient liquid assets or savings to cover one year’s worth of loan payments.
Lower debt-to-income ratio (DTI): Mortgage lenders consider a borrower’s debt-to-income ratio (DTI) when evaluating their eligibility for a jumbo loan. To qualify for a jumbo mortgage in Idaho, borrowers typically need a DTI below 43%, though closer to 36% is preferred. The DTI represents the borrower’s monthly debt payments divided by their gross monthly income.
Additional home appraisals: For a jumbo loan, mortgage lenders may require a second appraisal to ensure that the property’s value is accurate. This is particularly true in areas where there are few comparable home sales. The home appraisal acts as a second opinion and helps the mortgage lender to mitigate their risk. It’s important to note that the cost of a secondary appraisal may be higher than a typical home appraisal, particularly in areas with fewer sales.
This post first appeared on Redfin.com. To see the original, click here.