What It Takes to Refinance a Jumbo Loan

A loan-to-value ratio around 80%, a minimum 660 credit score and well-documented income history are common requirements.
Kate WoodApr 3, 2020

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Refinancing a jumbo loan isn’t for the faint of heart. Get ready for tough application requirements and extensive demands for documentation.

But the effort to refinance a — a mortgage that exceeds Freddie Mac’s and Fannie Mae’s conforming loan limits of $548,250, in most cases, and up to $822,375 or more in some high-cost areas — can be well worth it. Even a small drop in the interest rate can add up to big savings with these large loans.


With rising home prices pushing up , many homeowners are interested in refinancing their jumbo loan to pull cash out. Those who have adjustable-rate jumbo mortgages also may be looking to refinance. Of course, reducing a monthly payment and interest rate also are motivations for refinancing.

If you’re thinking of refinancing a jumbo loan, the first step is to crunch some numbers to see whether refinancing is worth it. If so, then you’ll want to understand the requirements.


Here’s what lenders and investors may require to refinance a jumbo loan:

Using bonuses and commissions to qualify? You'll need two years of documentation for those, too. If you're self-employed or in a partnership, you might be asked for a profit and loss statement and balance sheet. Also, you should be prepared to explain and document the source of any large or unusual deposits on your bank statements.

generally don’t vary much from conforming loan rates. Your credit score and loan-to-value ratio will play the biggest roles in determining the rate you're offered. It pays to shop multiple lenders, to see who'll give you the best rate: Even a fraction of a basis point can make a huge difference to the lifetime cost of a jumbo loan.

Jumbo loan fees and are similar to other mortgages. But since many fees are a percentage of the loan amount, you can end up paying more on a jumbo loan refinance. Plus, there’s this: Lenders may want two appraisals — especially on mortgages over $1 million — potentially doubling that fee.

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As home values rise, homeowners may refinance to extract some of their new wealth. A replaces your existing mortgage with a new mortgage for an amount that’s more than you owe on your home. You get to keep the extra amount in cash.

Banks vary in how much equity you’ll be able to extract, and rates can fluctuate slightly from day to day and bank to bank. So shop around for quotes, compare your offers and look for a mortgage advisor you have confidence in. The documentation involved in a jumbo refinance can be formidable, but your long-term savings could be well worth it.

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