What Is A Jumbo Loan In Texas? 

Jumbo loans are mortgages that are larger than the restrictions established by the Federal Housing Finance Agency, often known as “conforming loans.” (FHFA). As of 2021, the maximum loan amount for a single-family house in Texas is $647,200 with a conforming loan. Therefore, any mortgage above this limit would be considered a jumbo loan in Texas. These loans are often used to finance luxury houses or residences in high-priced real estate areas where the average property price is too high to qualify for a conventional mortgage. Jumbo loans typically have stricter eligibility requirements and higher interest rates than conforming loans, making them a more significant financial commitment for borrowers.

Jumbo Loan Eligibility Requirements

A jumbo loan is a mortgage loan that exceeds the limits set by Fannie Mae and Freddie Mac. Because jumbo loans are larger than the standard conforming loan limit, they typically have stricter eligibility requirements.

Some of the typical prerequisites for obtaining a jumbo loan are as follows:

Credit score: Jumbo loans have stricter lending requirements than conventional mortgages. Scores of 700 and higher are often expected.

Income: Jumbo loan borrowers must have a stable source of income and demonstrate their ability to make their mortgage payments.

Debt-to-income ratio: Monthly debt payments (including the mortgage payment) should not exceed 43% of a borrower’s monthly income, since this is the threshold at which most lenders would refuse to provide credit.

Down payment: The down payment for a jumbo loan is often more than that of a conforming loan. Depending on the lender, a down payment of 10% to 20% of the home’s price may be necessary.

Appraisal: Jumbo loans require a more thorough appraisal process, which may include inspecting the property.

It’s important to note that these eligibility requirements can vary depending on the lender and the specific jumbo loan program. If you’re interested in a jumbo loan, it’s best to speak with a lender directly to learn more about their specific requirements.

Jumbo Loan Pros and Cons

Jumbo loans are mortgages that are larger than the maximum loan amount allowed by Fannie Mae and Freddie Mac (548,250 in most of the United States as of this writing). 

Jumbo loans are typically used for expensive homes or homes in high-cost areas, but they come with both pros and cons. Here are some of them:


Higher Loan Limits: Jumbo loans allow borrowers to finance more expensive homes than they could with a conforming loan.

Flexibility: Jumbo loans offer greater flexibility than conforming loans. They may have looser requirements, such as a smaller down payment or a larger debt-to-income ratio.

Competitive Rates: While jumbo loans often have higher interest rates than conforming loans, the rates can still be competitive, especially for borrowers with good credit.


Jumbo loans often have higher interest rates than regular loans. Borrowers’ overall interest payments will go up as a consequence.

Larger Down Payment: A bigger down payment is customary for jumbo loans compared to conforming loans. This may make it more challenging for certain potential borrowers to be approved.

Stricter Requirements: Jumbo loans often have stricter requirements than conforming loans. This can include higher credit score requirements, more cash reserves, and stricter debt-to-income ratios.

Limited Availability: All lenders do not offer Jumbo loans, and some may have more stringent requirements than others.

In summary, jumbo loans offer higher loan limits and greater flexibility, but they come with higher interest rates, larger down payments, and stricter requirements. Borrowers should consider their financial situation carefully and weigh the pros and cons before choosing a jumbo loan.

Jumbo Loan Application Process

There are certain extra stages and regulations when applying for a jumbo loan compared to a regular loan.  Here is a general overview of the jumbo loan application process:

Pre-Qualification: Before applying for a jumbo loan, borrowers should consider pre-qualification. This process involves providing basic financial information to a lender, who will assess the borrower’s ability to qualify for a jumbo loan.

Application: Once the borrower has identified a potential lender and is prepared to apply for a jumbo loan, an application must be submitted. For this, specifics about your income, job history, and property holdings will be needed.

Documentation: Jumbo loan applicants must provide more documentation than conventional loan applicants. Financial documents, tax records, and other evidence of wealth may fall under this category.

Underwriting: After the borrower has completed the application and provided the necessary documentation, the lender will conduct a thorough underwriting process to assess the borrower’s creditworthiness and ability to repay the loan.

Appraisal: Jumbo loan lenders will require a home appraisal to determine the property’s market value. A licensed appraiser must conduct the appraisal.

Closing: If the lender approves the jumbo loan, the borrower must sign the loan documents and provide any necessary funds for closing costs and the down payment.

In summary, the jumbo loan application process is similar to a conventional loan but may require more documentation and a more thorough underwriting process. Borrowers need to work with a lender with experience with jumbo loans and can guide them through the process.


If you want to finance a high-end property or a home in an expensive real estate market in Texas, a jumbo loan may be your best option. However, it is important to note that jumbo loans have stricter eligibility requirements and higher interest rates than conforming loans. Researching and understanding all the terms and conditions of a jumbo loan before applying for one is crucial. With the right preparation and guidance from a trusted lender, you can secure the financing you need to purchase your dream home in Texas. Get in touch with us right now to learn more about the jumbo loan services we provide.


What is the maximum amount I can borrow with a Jumbo loan in Texas?

The maximum amount you can borrow with a jumbo loan in Texas depends on factors such as your credit score, debt-to-income ratio, and the lender’s guidelines. Generally, lenders in Texas offer jumbo loans up to $3 million or more.

What are the requirements for getting a jumbo loan in Texas?

A strong credit score, a low debt-to-income ratio, and a sizable down payment are normally required to get a jumbo loan in the state of Texas. In order to confirm your income and assets, lenders may ask for extra paperwork like tax returns and bank records.

How does a jumbo loan differ from a conventional loan?

Jumbo loans are non conforming loans since their loan amounts exceed those imposed by the Federal Housing Finance Agency. (FHFA). In addition to higher interest rates and more stringent underwriting standards, jumbo loans are seldom available.

What are the benefits of getting a jumbo loan in Texas?

The primary advantage of a Texas jumbo loan is the increased borrowing capacity over a regular loan. This can be particularly helpful if you’re looking to buy a high-priced home or live in an area with a high cost of living.

Are there any drawbacks to getting a jumbo loan in Texas?

Jumbo loans have higher interest rates and more stringent underwriting criteria than regular loans, which is the biggest downside of receiving one in Texas. As a result, you may have a more difficult time being approved for a loan and end up paying more in interest over the course of the loan.

How can I find the best jumbo loan rates in Texas?

To find the best jumbo loan rates in Texas, you should compare rates from several lenders. A mortgage broker can assist you in finding the most suitable loan for your individual requirements and financial circumstances.

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