Credible
Get Rates
  • Refinance Student Loans
    • Compare Options
      • Best Refinancing Companies
      • Lender Reviews
      • Refinance Student Loans
      • Student Loan Consolidation
    • Learn the Basics
      • Fixed vs. Variable Rates
      • Forgiveness Programs
      • Consolidation vs Refinancing
      • Repayment Plans
      • More on Student Refi
    • How to
      • Consolidate Your Student Loans
      • Pay Off Your Student Loans
      • Lower Your Interest Rate
    • Tools
      • Current Student Loan Refi Rates
      • Refinancing Calculator
      • Repayment Calculator
      • Student Loan Score Calculator
  • Student Loans
    • Compare Options
      • Private Student Loans
      • Parent Student Loans
      • Law School Loans
      • Medical School Loans
      • Graduate Student Loans
    • Learn the Basics
      • Student Loan Limits
      • Living Expenses
      • Applying for FAFSA
      • Federal Student Loans
      • Student Loan Interest Rates
      • More on Student Loans
    • How To
      • Pay for College
      • Take Out Student Loans
      • Apply Without Cosigner
      • Apply for Student Loans
      • Pay for Grad School
    • Tools
      • Best Private Student Loans
      • Current Student Loan Rates
      • Student Loan Interest Calculator: Estimate Payments
      • Lender Reviews
  • Personal Loans
    • Compare Options
      • Best Personal Loan Lenders
      • Lender Reviews
      • Get Personal Loan Rates
    • Learn the Basics
      • How to Qualify
      • How to Get a Loan
      • Where to Get a Loan
      • Personal Loans with Cosigner
      • Pay Off Credit Card Debt
      • More on Personal Loans
    • Best for
      • Credit Card Consolidation
      • Debt Consolidation Loans
      • Home Improvement Loans
      • Good Credit
      • Fair Credit
      • Bad Credit
    • Tools
      • Current Personal Loan Rates
      • Personal Loan Calculator
  • Mortgages
    • Compare Options
      • Mortgage Refinance
      • Home Loan
      • Best Mortgage Refinance Companies
      • Best Mortgage Lenders
      • Mortgage Preapproval
      • Mortgage Payment Calculator
    • Compare Rates
      • Mortgage Refinance Rates
      • 30-Year Fixed Refinance Rates
      • 15-Year Fixed Refinance Rates
      • Home Loan Rates
      • 15-Year Fixed Mortgage Rates
      • 30-Year Fixed Mortgage Rates
    • Learn the Basics
      • How to Buy a House
      • How to Refinance Your Mortgage
      • How to Get the Best Rate
      • Cash-Out Refinancing
      • More on Home Loans and Refi
    • Pay Off Mortgage
      • Home Equity to Pay Off Debt
      • Paying Off Mortgage Early
      • Mortgage Refinance Cost
  • Insurance
    • Insurance Products
      • Insurance Products
      • Learn more about home insurance
    • Compare Options
      • Compare Insurance Quotes
      • Home Insurance Guide
    • Learn the Basics
      • What Home Insurance Covers
      • How Much Home Insurance You Need
      • Estimate Your Home Replacement Cost
      • How to Change Home Insurance
  • Company
    • About
    • Reviews
    • Blog
    • Lenders
    • Editorial Guidelines
    • FAQs
    • Press
  • Find My Rate
Advertiser Disclosure

How to Refinance a Jumbo Loan

Refinancing your jumbo loan can help you lower your rate, lower your monthly payment, or allow you to take cash out of your home.

Josh Patoka Josh Patoka Edited by Chris Jennings Updated March 28, 2022

Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as "Credible."

Jumbo loans are mortgages that exceed the conforming loan limits set by Fannie Mae and Freddie Mac. In most parts of the country, this means a loan larger than $647,200 on a single-unit property. In some higher-priced counties, though, conforming loans can go as high as $970,800.

Because jumbo loans don’t adhere to Fannie and Freddie’s guidelines, they’re not eligible to be purchased by these companies. That, plus their higher balances, makes them a higher risk for lenders. This typically means borrowers must meet stricter standards when applying to refinance.

You can also usually expect to need a strong credit score and several months of cash reserves to refinance your home loan, though these standards vary by lender.

Here’s what else you should know about refinancing a jumbo loan:

  • How to refinance a jumbo loan
  • Requirements to refinance a jumbo loan
  • Benefits of refinancing a jumbo loan
  • Drawbacks of refinancing a jumbo loan
  • Jumbo loan refinance rates
  • When you should refinance a jumbo loan
  • Don’t skip shopping around

How to refinance a jumbo loan

The process for refinancing a jumbo loan is similar to that of your original mortgage. You should:

  1. Compare several lenders: Get quotes from at least three lenders to ensure you’re getting the best jumbo refinance rates and terms. A personalized quote through Credible is free, only takes a few minutes, and doesn’t hurt your credit score. With Credible, you can easily compare your interest rate, monthly payment, and lender fees to choose your best option.
  2. Gather your financial documentation: Submit the application paperwork including your tax returns, bank statements, assets, proof of income, and credit report. Your loan officer can help you acquire the proper documents.
  3. Await your appraisal: Your lender typically requires an appraisal to determine your property value and the minimum loan-to-value ratio (LTV) to avoid private mortgage insurance (PMI).
  4. Attend your closing appointment: You’ll schedule a closing appointment to finalize your mortgage refinance. You’ll receive a Closing Disclosure a few days before the closing date with your new rate and term, and you’ll sign a number of documents pertaining to your loan on the closing date. The appointment can take a few hours to complete.
  5. Pay your refinance closing costs: You’ll need to pay several closing costs including origination fees, title fees, and escrow fees. You can usually pay these via wire transfer or cashier’s check. It’s possible to roll some of these fees into the loan if you’re willing to pay a higher annual percentage rate (APR).
Success! Once you’ve done this, your old loan will be paid off, and you’ll begin paying your new lender — in the new amount — moving forward. Make sure you update any autopayments appropriately if necessary, too.

Learn More: How to Refinance Your Mortgage in 4 Easy Steps

Requirements to refinance a jumbo loan

Jumbo loan requirements vary from one lender to the next, but you can generally expect to be held to higher standards than you would on a conforming loan or FHA loan.

Here’s a look at some general requirements you might need to meet to qualify:

Min. credit scoreSometimes as low as 680, but typically 700 or higher
Max debt-to-income ratio38% to 43%
Loan-to-value ratioUp to 90%
Cash reserves6 to 18 months of payments
Properties
  • Primary residence
  • Second homes
  • Investment properties

Find Out: How to Refinance an Investment Property

You’ll also need to provide some financial documents to qualify for the mortgage refinance, including:

  • Your most recent W-2s, 1099s, and tax returns
  • Proof of employment
  • Recent paystubs
  • Statements for any bank accounts and retirement accounts

Closing costs are also required. You can usually expect to pay between 2% to 5% of the total loan balance in closing costs, though these vary by lender.

In some cases, you might qualify for a no-closing-cost refinance, which essentially means your closing costs are rolled into the loan balance.

Benefits of refinancing a jumbo loan

Here are some ways refinancing your jumbo loan can affect your mortgage:

  • Lower interest rates: You can lower your interest rate which may also reduce your monthly payment. Paying less lifetime interest gives you more money to pay for other expenses.
  • Get a fixed interest rate: If you currently have an adjustable-rate loan, switching to a fixed-rate loan protects yourself from rate adjustments. Your monthly payment and interest costs remain the same for the entire loan term.
  • Modify your repayment term: Opting for a shorter-term loan means a higher payment, but a faster payoff. You can also keep or extend your current repayment term if you need a smaller monthly payment.
  • Tap your home equity: With a cash-out refinance, you take out a new loan that’s higher in balance than your current one and can withdraw some of your current equity. You then receive the difference as a lump-sum payment to use for many purposes including home improvements and consolidating debt.
  • Available in high-cost areas: Jumbo mortgages are available to homeowners in expensive regions where home values exceed Federal Housing Finance Agency (FHFA) conforming limits and you don’t qualify for a conventional mortgage. Many property types qualify including primary residences, second homes, and investment properties.
Tip: It’s possible to combine many of these effects, as well. But your options depend on your personal situation, how much equity you have in the home, and the lender you choose.

Keep Reading: How Often Can You Refinance Your Mortgage?

Drawbacks of refinancing a jumbo loan

Here are several disadvantages of refinancing your jumbo mortgage:

  • Stricter underwriting guidelines: Jumbo mortgage loans exceed the conforming loan limits and aren’t purchased by Fannie Mae or Freddie Mac. As a result, your lender may require an excellent credit score, higher annual income, more cash reserves, and a lower debt-to-income (DTI) ratio.
  • Higher closing costs: Just like your original home purchase loan, you’ll pay several closing costs including origination costs, underwriting fees, appraisal fees, title insurance, and prepaid taxes and escrow. Since jumbo loans are more expensive than conforming loans, you can expect higher closing fees. Total closing fees typically range between 2% and 5% of the loan amount.
  • Higher interest rates: Because of strict jumbo loan requirements and higher loan amounts, this loan type usually has higher APRs than conforming loans.
  • More lifetime interest: You may pay more interest over the life of your loan if you extend your repayment term. This is a possibility even if you secure a lower interest rate.
  • Private mortgage insurance: Your lender will require PMI payments if your home equity is below 20%. This fee increases your mortgage payment and can also make it harder to qualify for financing if you cannot afford the additional amount.

Jumbo loan refinance rates

Jumbo loan rates fell to a historic low in December 2020, with 30-year fixed jumbo rates dropping to approximately 2.812%, according to data from the Federal Reserve Bank of St. Louis.

To illustrate how current jumbo loan refinance rates compare to other mortgage loan types, here’s a recent sample of fixed refinance rates found on Credible:

Loan typeInterest rate
30-year fixed jumbo3.500%
15-year fixed jumbo3.125%
30-year fixed2.990%
20-year fixed2.875%
15-year fixed2.250%
10-year fixed2.125%

Jumbo loans are also available as adjustable-rate mortgages (ARMs). With an ARM, you have a fixed-rate for the first portion of the loan before the loan’s interest rate can adjust periodically.

When you should refinance a jumbo loan

Refinancing a jumbo loan can be smart a smart decision if:

  • Mortgage rates are lower than your current rates. This is probably the most popular reason people choose to refinance: to save money on interest.
  • You have a change in your financial situation. If you’re making more money, for example, you might consider refinancing into a shorter-term loan, allowing you to pay off the loan sooner (and with less interest).
  • You want a different loan type. If you want to refinance into a fixed-rate loan from an ARM, for example, you can do that by refinancing.
  • You want to take cash out of your home. You could get a cash-out refinance which would allow you to refinance your loan at a higher amount than the current one — then you would get a check for the difference.
Tip: The most important thing to think about when deciding if you should refinance, is your “breakeven point,” though.

Since refinancing comes with closing costs, you’ll want to make sure you’ll be in the home long enough to break even on those fees. Basically, you should be saving more money than you paid to refinance the loan.

Loading widget - mortgage-refi-calculator
Find out if refinancing is right for you

  • Actual rates from multiple lenders – In 3 minutes, get actual prequalified rates without impacting your credit score.
  • Smart technology – We streamline the questions you need to answer and automate the document upload process.
  • End-to-end experience – Complete the entire origination process from rate comparison up to closing, all on Credible.

Find My Refi Rate
Checking rates will not affect your credit

Trustpilot

Learn more: Mortgage Refinancing Calculator

Don’t skip shopping around

Jumbo loans can be risky products for lenders, so they tend to vary greatly from one company to the next. Make sure you compare multiple lenders to ensure you’re getting the best loan for your needs and budget.

Credible makes it easy to see what refinance offers you’re eligible for and compare them — and you can do it all at once without having to visit multiple lenders.

Loading widget - refi-rate-table

Aly J. Yale contributed to the reporting for this article.

About the author
Josh Patoka
Josh Patoka

Josh Patoka is a personal finance authority and a contributor to Credible. His work has been published on Fox Business and several award-winning personal finance blogs including Well Kept Wallet, Wallet Hacks, and Frugal Rules.

Read More

Home » All » Mortgages » How to Refinance a Jumbo Loan

Home Refinance Options


  • Choose the Right Refi Option
  • Rate and Term Refinance
  • Cash-Out Refinance
  • Limited vs. No Cash-Out Refi
  • No-Closing-Cost Refinance
  • No Appraisal Refinance
  • Refinancing to a 15-Year
  • Refinancing to an ARM
  • Refinancing for Bad Credit

Options by Loan & Property Type

  • Refinance a Jumbo Loan
  • Refinance an FHA Loan
  • Refinance a VA Loan
  • Refinance a Home Equity Loan
  • Refinance a Rental Property
  • Refinance an Investment Property

Mortgage Refi Guides

  • How to Refinance Your House
  • When to Refinance

Tools and Resources

  • Refinance Your Mortgage
  • Best Refinance Companies
  • Pay Off Your Mortgage Early
  • Today’s Mortgage Refi Rates
  • How to Find the Best Lender
  • Lender Reviews

  • Click to share on Facebook (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on Twitter (Opens in new window)
  • Click to email a link to a friend (Opens in new window)

Related Articles

Mortgages

Conforming Loans: What They Are and How They Work

Mortgages

Jumbo Loans: Requirements, Limits, and Rates

Mortgages

Conventional Mortgage: Everything You Need to Know

  • Read More
    • Refi Student Loans
    • In School Loans
    • Personal Loans
    • Mortgages
    • Insurance
  • Resources
    • Lender Reviews
    • Loan Calculators
    • Student Loan Score Calculator
    • Data Insights
    • Debt Statistics
    • Sitemap
  • Compare
    • Student Loan Refinance
      • Current Student Loan Refi Rates
    • Student Loan Consolidation
    • Private Student Loans
      • Current Student Loan Rates
    • Personal Loans
      • Current Personal Loan Rates
    • Refinance Mortgage
      • Mortgage Refinance Rates
        • 15-Year Fixed Refinance Rates
        • 30-Year Fixed Refinance Rates
    • Home Loans
      • Home Loan Rates
        • 15-Year Fixed Mortgage Rates
        • 30-Year Fixed Mortgage Rates
    • Insurance
  • Top Lenders
    • Best Student Loan Refi Companies
    • Best Private Student Loans
    • Best Personal Loans
    • Best Mortgage Lenders
    • Best Mortgage Refinance Companies
  • Company
    • About
    • Reviews
    • Blog
    • Editorial Staff
    • Editorial Guidelines
    • News
    • Press
  • Legal
    • Terms of Use
    • Privacy Policy

© 2023 Credible


Credible Operations, Inc. NMLS ID# 1681276 | NMLS Consumer Access | Licenses and Disclosures
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Disclosure

Affiliated Business Arrangement Disclosure

Credible Operations, Inc., (“Credible”) has a business relationship with Young Alfred, Inc., (“Young Alfred”), an insurance broker. Please click here for the full Affiliated Business Arrangement disclosure form. You are not required to use Young Alfred as a condition for settlement of your loan.

Similarly, Young Alfred has a business relationship with Credible, a mortgage broker. Please click here for the full Affiliated Business Arrangement disclosure form. You are not required to use Credible as a condition to obtain access to any settlement services, such as homeowners or other insurance products.

Acknowledgement

By clicking “Accept” below, I/we acknowledge that I/we have read the applicable full disclosure form, and understand that any referrals by Credible for insurance settlement services or any referrals by Young Alfred for mortgage settlement services, may result in Credible, Young Alfred, its parent company, and/or its affiliates receiving a financial or other benefit.