Thinking about a Deerfield home that pushes past the usual loan limits? You are not alone. Many North Shore move‑up buyers discover that their price range calls for a jumbo mortgage and that can raise questions about down payments, reserves, and lender options. In this quick guide, you will learn what counts as a jumbo in 2024, how lenders evaluate these loans, what to expect for cash to close and savings on hand, and how to shop lenders with confidence. Let’s dive in.
What counts as a jumbo in Deerfield
A jumbo mortgage is any home loan that exceeds the Federal Housing Finance Agency’s conforming loan limits for the year. For 2024, the one‑unit baseline limit is $766,550. In Deerfield and nearby North Shore suburbs, many single‑family homes can sit near or above that number, so a first mortgage above $766,550 is considered a jumbo.
Jumbo loans are not purchased by Fannie Mae or Freddie Mac the same way conforming loans are. That means underwriting standards and pricing vary by lender. Always confirm the current year’s FHFA limits and compare them to your target price range.
Multi‑unit limits for 2024
If you are considering a 2 to 4 unit property, here are the 2024 baseline conforming limits:
- 2‑unit: $981,850
- 3‑unit: $1,186,725
- 4‑unit: $1,475,550
Anything above these amounts for the respective property type is a jumbo.
What lenders look for on jumbo loans
Jumbo underwriting is usually more selective than conforming. Lenders set their own standards, so the details can vary, but these patterns are common on the North Shore.
Credit score and DTI
- Credit scores: Most jumbo programs look for minimums near 700, with the best pricing often at 740 to 760 and above.
- Debt‑to‑income ratio: Caps often fall in the 43 to 50 percent range, depending on your credit profile, reserves, and program type. Strong compensating factors can allow more flexibility with some lenders.
Income and assets
- Wage earners: Expect recent pay stubs, two years of W‑2s, and employer verification.
- Self‑employed: Count on two years of personal and business tax returns, profit and loss statements, and possibly 1099s. Underwriting is often more detailed than for conforming loans.
- Assets: You will provide bank, brokerage, and retirement statements. Retirement accounts can count toward reserves if distributions are allowed, sometimes with discounting. Gift funds may be allowed for down payment with full source documentation.
Appraisals and local property nuance
Jumbo loans require a standard appraisal, and unique or high‑end properties can trigger deeper valuation reviews or additional comparable sales. In Deerfield and nearby North Shore micro‑markets, lot sizes, custom renovations, and street‑by‑street comps matter. Lenders also pay close attention to total monthly housing costs, including Lake County property taxes and insurance, since those drive your qualifying numbers and reserve needs.
Down payment and reserves: what to expect
Down payment and post‑closing reserves are two of the biggest differences you will notice with jumbo financing. Plan ahead so the funds you intend to use are seasoned and well documented.
- Primary residences: Many lenders price most competitively at 20 percent down. Some well‑qualified borrowers can find options with 10 to 20 percent down, but these often come with stricter requirements on credit, debt‑to‑income, and reserves.
- Second homes and investment properties: Expect larger down payments, often 25 percent or more, and tighter reserve requirements.
- Reserves: Lenders commonly want 6 to 12 months of PITI (principal, interest, taxes, and insurance) in verified assets after closing. Larger loan amounts, higher DTIs, or self‑employment can push reserves above 12 months.
- PMI: Standard private mortgage insurance is typically not available at higher jumbo loan sizes. Lenders may offset risk with higher rates or larger down payments rather than PMI.
Real‑world examples
- Borrower A: $900,000 purchase, 20 percent down ($180,000), loan $720,000. With a 760 credit score, 6 to 12 months of reserves, and DTI under 45 percent, this buyer might see competitive jumbo pricing.
- Borrower B: $1,200,000 purchase, 10 percent down ($120,000), loan $1,080,000. This larger jumbo often requires higher reserves, stronger credit, and tighter documentation. Pricing may be higher than smaller jumbos or loans with more money down.
Rates and pricing strategies for North Shore buyers
Jumbo rates have not always been dramatically higher than conforming rates. The spread can be small or even negligible at times, but it moves with market conditions and lender liquidity. Your personal pricing hinges on several factors.
- Your profile: Higher credit scores and lower loan‑to‑value ratios improve pricing. Occupancy matters too. Primary homes usually price better than second homes, which price better than investment properties.
- Loan size and program: Some lenders offer sharper pricing across certain loan bands. Very large loans can carry a premium. Full‑documentation conventional jumbos often price better than non‑QM or portfolio programs that offer added flexibility.
- Market conditions: Rates respond to macro interest rates and bank balance‑sheet appetite. When lenders tighten, product menus can shift and pricing can widen.
- APR vs note rate: Compare the annual percentage rate, not just the headline rate. Fees, discount points, and buydowns can make a low advertised rate more expensive once you add everything up.
- Lock strategy: Ask about lock length, float‑down options, and any lock fees. Larger jumbos sometimes need longer locks to allow for appraisal and underwriting timelines.
How to shop lenders on the North Shore
You will get the best result by comparing a few different types of lenders. Each has strengths, and the winner for your file depends on your credit, assets, income type, and timing.
- Mortgage brokers: Broad access to wholesale jumbo products and quick comparisons.
- Regional or community banks active locally: Familiar with North Shore properties. Some offer portfolio jumbos and relationship pricing.
- National banks: Standardized underwriting and processing. Less flexible at times, but efficient.
- Credit unions and private banks: Can be competitive for deposit or investment clients and may be more flexible on reserves or assets.
Questions to ask every lender
- What 2024 conforming limit applies to my property type, and does my loan size make this a jumbo?
- What are the quoted interest rate and APR for my credit score, down payment, and loan amount, and what fees are included?
- What is the minimum credit score and documentation you require for this program?
- How many months of PITI reserves will I need, and which assets qualify?
- Do you sell or service the loan, and do you offer any portfolio or non‑QM jumbo options if needed?
- How do you underwrite self‑employed income for jumbos?
- What appraisal requirements are typical for Lake County properties?
- What lock lengths are available, do you offer a float‑down, and are there lock fees?
- What is your typical purchase timeline from application to closing in this market?
Compare pre‑approval letters side by side
When you have two or three pre‑approvals, review them line by line. Each letter should list the proposed program, loan amount, loan‑to‑value, required reserves, the credit score used, and any conditions like appraisal or income verification. Compare APRs and lender fees using the Loan Estimate so you are making an apples‑to‑apples decision.
Your jumbo pre‑approval checklist
Gather and organize documents up front. A clean file speeds up underwriting and helps you move fast when the right Deerfield home hits the market.
- Pull your credit and scan for errors. Resolve issues early if possible.
- Two months of statements for checking, savings, brokerage, and retirement accounts.
- Income documentation: recent pay stubs and two years of W‑2s for wage earners. Two years of personal and business tax returns plus year‑to‑date profit and loss for self‑employed.
- A written summary of your asset picture and which accounts will fund the down payment and reserves.
- A clear target price range, neighborhoods of interest in Deerfield and the North Shore, and an estimate of taxes and insurance for budgeting.
- If you own now, outline whether you plan to sell first or buy first and how you will handle the down payment in either scenario.
Timing strategy for move‑up buyers
Decide early how you want to sequence your sale and purchase. The choice influences your down payment plan and your lender conversations.
- Sell first: This can simplify your financing and reduce the need for short‑term borrowing. Work with your lender and agent to line up timelines so you are ready to write on the new home once you have a contract on your current one.
- Buy first: Be ready for a higher down payment and larger reserves. Some owners access equity from their current home through a separate financing solution. Discuss pros and cons with your lender.
Either way, early pre‑approval gives you leverage and clarity. Sellers take your offer more seriously when your finances are settled and your jumbo plan is in place.
Next steps
If your Deerfield search is likely to exceed the 2024 conforming limit, start the jumbo conversation now. Map your down payment sources, get a handle on reserves, and talk with two or three lenders so you can compare options with confidence. With a clear budget and a strong pre‑approval, you will be ready to act when the right North Shore home comes to market.
When you want a calm, data‑driven partner on the real estate side, reach out to Haylee Stone for local guidance and a streamlined plan from search to close.
FAQs
What loan amount is considered a jumbo in Deerfield for 2024?
- For a one‑unit home, any first mortgage above $766,550 is a jumbo. Limits change annually, so check the current FHFA figures when you start your search.
How much down payment do North Shore jumbo loans usually require?
- Many buyers put 20 percent down for best pricing. Some well‑qualified borrowers can find options with 10 to 20 percent down, often with higher reserves and stricter criteria.
How many months of reserves will I need for a jumbo?
- For a primary residence, 6 to 12 months of PITI is common. Larger loans, higher DTIs, or self‑employment can push reserves above 12 months.
Are jumbo rates much higher than conforming rates?
- Not always. The spread can be small and depends on market conditions, your credit, down payment, and loan size. Compare APRs and fees across several lenders.
Who should I talk to for a jumbo pre‑approval in Deerfield?
- Speak with a mortgage broker, a regional or community bank active on the North Shore, and a national lender. Compare programs, APRs, reserve requirements, and timelines before choosing.
