Does the cost of your dream house exceed the amount of conventional conforming loan limits? If that is the case, then a Jumbo Loan is for you. The Jumbo Loan is usually the best choice if the mortgage exceeds $424,100, the amount imposed by Fannie Mae and Freddie Mac in Texas.

Jumbo Home Loans require larger down payments because they have no Private Mortgage Insurance (PMI). They are not secured by either Fannie Mae, Freddie Mac or FHA. Instead, they are guaranteed by private investors.

For this type of loan, the borrowers must have documents proving their income and assets. To get a good chance of approval, the borrower should have a 45 percent debt-to-income (DTI) ratio. Borrowers must also have a high credit score, no lower than 700 in most cases. Unlike some government loan types that only require one or two months reserves after closing, the jumbo loan requires a reserve amount for at least six months.