Top 5 Bankrate jumbo mortgage lenders

• Ally Bank – Best overall
• CIT Bank – Best bank lender
• First Mortgage Direct – Best no-fee lender
• Better.com – Best online lender
• PNC Bank – Best for refinancing

Methodology

Bankrate helps thousands of borrowers find mortgage and refinance lenders every day. To determine the top mortgage lenders, we analyzed proprietary data across more than 150 lenders to assess which on our platform received the most inquiries within a three-month period. We then assigned superlatives based on factors such as fees, products offered, convenience and other criteria. These top lenders are updated regularly.

Ally Bank – Best overall

Ally Bank is an online bank and lender that offers several benefits for borrowers seeking jumbo loans and other types of mortgages.

Strengths: Ally Bank displays interest rates and APRs on its website, and you’ll be able to get preapproved in as little as three minutes, with the typical closing taking place 10 days faster than the industry average, according to the bank. Notably, Ally allows restricted stock units to count towards jumbo loan reserve requirements.

Weaknesses: The bank doesn’t lend mortgages in 13 states (Alaska, Connecticut, Hawaii, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New York, North Carolina, Vermont, Virginia or Wyoming), and if you’re a first-time homebuyer seeking a jumbo loan, you’ll need at least 12 months’ reserves to qualify.

Read Bankrate's Ally Bank mortgage review

CIT Bank – Best bank lender

CIT Bank, which also does business as OneWest Bank in Southern California, has fixed-rate products ranging from 10- to 30-year terms, as well as adjustable-rate and interest-only loans. The bank also offers jumbo loans up to $2 million.

Strengths: If you’re a banking client, you can get a lower mortgage rate if you deposit a certain portion of the loan principal into your account, and $525 cash back after you close your loan. You can also view interest rates online after inputting some basic information.

Weaknesses: With the exception of OneWest branches, the bank doesn’t have physical locations if you’re seeking in-person assistance.

Read Bankrate's CIT Bank mortgage reviews

First Mortgage Direct – Best no-fee lender

First Mortgage Direct, the online division of First Mortgage Solutions, offers both purchase loans and refinancing.

Strengths: First Mortgage Direct has no hidden fees or limited-time offers, and you can receive a personalized rate within seconds through its website. Borrowers are also able to close in 30 days, which is in line with many other lenders’ timelines.

Weaknesses: First Mortgage Direct is available only in 19 states (California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Kansas, Missouri, Nebraska, New Jersey, Oregon, Pennsylvania, South Carolina, North Carolina, Tennessee, Texas, Virginia and Washington).

Read Bankrate's First Mortgage Direct review

Better.com – Best online lender

Better.com, also known as Better Mortgage, is an online mortgage lender. It ranks highly on Bankrate’s lists of best mortgage lenders overall, best online lenders and others.

Strengths: With Better, you can get a rate quote in seconds and a preapproval in as little as three minutes. The lender doesn’t charge unnecessary fees, either.

Weaknesses: There aren’t any branch locations, which can be a disadvantage if you’re looking for in-person support from a loan officer.

Better.com mortgage review

PNC Bank – Best for refinancing

PNC Bank is a bank offering an array of financial products, from high-yield savings accounts to different types of mortgages.

Strengths: PNC Bank can do jumbo purchase loans and refinances up to $5 million. The bank also offers online preapprovals (these take 20 to 30 minutes to generate) and showcases interest rates on its website. In addition, some clients have access to discounts on mortgage.

Weaknesses: Relationship pricing is only available to PNC Wealth Management and Hawthorn clients who have at least a $500,000 balance, which can be a barrier of entry for some borrowers.

Jumbo mortgage basics

What is a jumbo loan?

A jumbo loan is one that exceeds the limits for conforming loans set by the Federal Housing Finance Agency (FHFA). These conforming loans are those that can be serviced by Fannie Mae and Freddie Mac. Because a jumbo loan exceeds these limits, it's also called a non-conforming loan.

When you get a jumbo mortgage, your lender can’t rely on federally-backed insurance from Freddie and Fannie to reduce some of their risks. Many of the home loan programs provided by the government operate under the principle that lenders will be able to recoup some of their losses if a borrower defaults. At the very least, lenders know they can sell their loans to these government-sponsored enterprises, in part, to promote liquidity in the home loan market.

When should you consider a jumbo mortgage?

If you’re buying a high-priced house, and you’re able to qualify, a jumbo mortgage can be a good deal. For jumbo loans, lenders typically demand a stellar credit score, a spotless credit history and a down payment of 20 percent or more.

Jumbo loan requirements and qualifications

Each year, the Federal Housing Finance Agency reviews home prices to determine the conforming loan limit. The ceiling is based on home price increases, as well as where the homes are located, usually by county. Any mortgage above the conforming loan amount is considered a non-conforming loan — a jumbo loan. For 2021, the limit for most conforming loans is $548,250. However, there are some areas of the country that have a higher conforming loan limit — amounts up to $822,375 in the most expensive areas.

Keep in mind: the sale price of the property doesn’t really affect whether or not you need to get a jumbo loan; it’s all about how much you have to borrow. So, you can purchase a multimillion-dollar home, and if you only finance a small portion of it (below the limit in your area) you can still get a conforming mortgage.You can find the non-conforming loan limits for every state and county here.

Before you apply for a high-dollar mortgage, find out if you live in one of those high-cost areas. The FHFA offers an interactive map of all the counties in the United States, along with the conforming limits in those counties. If your mortgage exceeds the conforming loan limit, it’s a jumbo loan, and you’ll need to take that into account as you move forward.

You’ll have to meet certain qualifications to get a non-conforming loan.

When lenders make conforming mortgages, they know that they can sell the loans to Fannie and Freddie and offload some of the risks. However, with a non-conforming loan, that option isn’t available, so jumbo mortgage lenders often have stricter requirements for jumbo borrowers. These can include:

• A higher credit score than might be required for a conforming loan
• 20 percent minimum down payment
• Better debt-to-income ratio

What are the benefits of a jumbo loan?

The main benefit for borrowers is that a jumbo mortgage lets you borrow more than the limits imposed by Fannie and Freddie. For instance, if you’d like to borrow $1 million against a $1.5 million home, a jumbo loan makes it possible.

Some borrowers prefer to finance more of the home’s cost rather than tying up cash, making the jumbo mortgage a helpful financial tool and part of an overall investment strategy. You can still get a competitive interest rate and finance the home of your choice without being restricted by the dollar limit on conforming mortgages.

15-year vs. 30-year jumbos

Interest rates for 15-year fixed jumbo mortgage loans are usually somewhat lower than those for 30 years. Of course, monthly payments on 15-year jumbos — already high because of the values of the property involved — are considerably higher compared to a 30-year loan, because the payment schedule is compressed into half the time. But you’ll finish paying sooner, and your total borrowing costs will be lower.

How is the mortgage process different with a jumbo loan?

To get one of these large mortgages, you’ll probably have to jump through a few extra hoops. For instance, you’ll need to show you have a jumbo-sized salary and that you’ve saved enough to make the larger down payment, (as a percentage of the total amount financed) than is required for a conforming loan. Lenders often require a 20 percent down payment for jumbo loans, compared with as little as 5 percent — or sometimes less — for a conforming mortgage.

You’ll also probably need a better credit score. With a conforming loan, you might be able to get approved even with a credit score as low as 500. But for a jumbo loan, 700-plus is often required because lenders need assurance that you will be able to responsibly keep up with the high payments involved, especially because the lender assumes more risk with this kind of loan.

Additionally, you might need to go through a more rigorous vetting process for your income and assets with a jumbo mortgage. Depending on the lender requirements, it might take longer to close on a non-conforming loan than it would to close on a conforming loan.

Shopping around for the best jumbo mortgage rates

When getting a jumbo loan (or really any kind of loan), it’s a good idea to shop around. Bankrate is a good starting point. Because a non-conforming loan is usually for such a large amount, getting the best rate can make a big difference in the amount of interest that you pay.

Be sure to check with local financial institutions as well, since sometimes community banks or credit unions can have good rates. It’s also a good idea to work with a mortgage broker who specializes in jumbo loans.

As you solicit quotes from lenders and brokers, make sure you provide information that’s as accurate as possible. Because your credit score is going to be a big determinant of your rate, review your credit report before you start shopping around. If you see errors, have them fixed as soon as possible.

Be prepared to answer questions about your liquid and non-liquid assets, as well as how much you can afford for your down payment. You should also have an accurate idea of your income and your debt levels so you can let potential lenders know your debt-to-income ratio. The more accurate your information, the more accurate your preliminary mortgage rate quote will be.

Bottom line

If you plan to buy a home and need a loan that exceeds the conforming limit set by the FHFA, you need to understand jumbo loans. You’ll probably have a more involved and complicated process to go through to fund your home. However, if you move forward with the right lender, there’s a good chance that you’ll be able to get the home of your dreams — even if you use a non-conforming loan.

Learn more about jumbo mortgages

• Jumbo loan basics
• Differences between conforming and jumbo loans
• Compare mortgage lenders