Shopping luxury homes in Scottsdale and wondering if your mortgage will be a jumbo? You are not alone. Many purchases in North Scottsdale, DC Ranch, Troon, and McDowell Mountain Ranch cross the line where special financing applies. In this guide, you will learn what counts as a jumbo loan here, how rates and costs work, what lenders expect, and how to prepare so you can close with confidence. Let’s dive in.
Jumbo loans: what they are in Scottsdale
A jumbo loan is a mortgage with a loan amount above the current conforming loan limit set each year by the Federal Housing Finance Agency (FHFA). Loans at or below that limit are conforming. Loans above it are non-conforming and are often called “jumbo.”
As a reference point, the single-family baseline conforming limit for most U.S. counties in 2024 was $726,200. Maricopa County was not a high-cost county in that cycle, so many Scottsdale homes above that range required jumbo financing. The limit can change each year. Check the latest FHFA limit or ask your lender for the current number before you shop.
In Scottsdale, many luxury homes are priced from 1 million to 5 million and beyond. That puts a large share of buyers into jumbo loans, whether for a primary home, a second home, or an investment property.
Common jumbo loan options
You will find several product types in the local market:
- Fixed-rate jumbos (30-year and 15-year) with full documentation.
- Adjustable-rate jumbos (5/1, 7/1, 10/1) if you expect to refinance or sell within a set period.
- Portfolio loans from banks or credit unions that hold loans and can be more flexible with unique income or properties.
- Bank-statement or alternative-doc programs for self-employed buyers who prefer statement-based qualifying.
- Asset-depletion or asset-qualifying options for buyers with significant liquid assets and limited W-2 income.
- Cash-out jumbos for tapping equity, often with tighter limits and higher pricing.
What lenders look for
Jumbo underwriting is more detailed than conforming. Plan for the following:
- Credit score: Many lenders want scores in the high 600s to low 700s. You will see the best pricing and smoother approvals at 720 or higher.
- Down payment and LTV: For a primary home, 10 to 20 percent down is common. For a second home, many lenders want 20 to 30 percent down. Investment properties often require 25 to 30 percent or more.
- Debt-to-income ratio (DTI): Maximum DTIs often range from the low 40s to the mid 50s, depending on credit strength, reserves, and other factors.
- Reserves: Expect 6 to 12 months of PITI for a primary home. Second homes and investment properties often require 12 to 24 months or more. Larger loans and higher LTVs require more.
Documentation you should expect
Full documentation is standard for jumbos.
- W-2 employees: Two years of W-2s and tax returns, recent paystubs, employer verification, and 60 to 90 days of bank statements. Be ready to document large deposits.
- Self-employed: Two years of personal and business tax returns, profit and loss statements, balance sheets, and often bank statements for 12 to 24 months. Lenders may pull IRS transcripts.
- Alternative-doc and asset-qualify: Bank statements, asset statements, and calculations for asset-based income. These often require higher reserves and carry higher rates.
- Gift funds: Often allowed with a gift letter and source documentation. Rules vary by lender and whether gifts can cover reserves.
Appraisals for luxury homes
A full appraisal is typical for jumbo loans. Because the loan size is large and underwriting is manual, appraisal waivers are uncommon. For high-value or unique homes, a second appraisal or review may be required. Properties with custom finishes, guesthouses, acreage, or nonstandard features may need specialized valuation methods and experienced luxury appraisers.
Rates and what drives them
Jumbo rates move with investor demand, market interest rates, and risk. At times, jumbo rates can be slightly lower than conforming rates. At other times, they run higher. Pricing varies by lender and your profile.
Key drivers include:
- Credit score and credit history.
- Loan-to-value and down payment size.
- Loan amount and whether it exceeds investor size brackets.
- Occupancy type: primary usually prices better than second home, which prices better than investment.
- Documentation type: full doc usually beats bank-statement or non-traditional programs.
- Loan purpose: purchase or rate-term refi typically prices better than cash-out.
- Property type: single-family often prices better than condos or unique estates.
To get a true comparison, review the full cost quote, including rate, points, and lender fees, not just the rate.
Closing costs to plan for
Some costs run higher with jumbos because of valuation and loan size:
- Appraisal fees are higher for high-value homes or complex properties.
- Origination and processing fees can be similar in percentage terms but larger in dollars.
- Discount points are optional and can lower your rate. Pricing varies by lender and loan size.
- Initial escrow deposits and reserve requirements can increase total cash to close.
Timeline and how to stay on track
With a complete file, many jumbo loans close in 30 to 45 days. Complex profiles or unique properties can take 45 to 60 days or more. The slowest steps are often appraisal scheduling and review, verification of large assets, and manual underwriting.
You can save time by providing full documentation early, using secure digital uploads, and choosing a lender with proven jumbo capacity and Scottsdale experience.
Second homes and investors in Scottsdale
If you are buying a second home, plan for stricter terms than a primary residence. Down payments of 20 to 30 percent are common, and reserves often run 12 to 24 months. For investment properties, expect higher down payments, tighter DTIs, and higher rates. Asset documentation and property-level details like HOA dues and rental expectations matter.
Jumbo buyer prep checklist
Use this quick list to prepare before touring homes:
- Credit: Pull your reports, fix errors, and aim for a 720+ score if possible.
- Assets: Gather 12 to 24 months of bank, brokerage, and retirement statements. Document large transfers.
- Income: Provide two years of tax returns and W-2s. If self-employed, include business returns and current P&L.
- Explanations: Write brief notes for credit inquiries, employment gaps, and large deposits.
- Reserves: Confirm liquid assets to cover 6 to 24 months of PITI based on occupancy and loan size.
- Property research: Review HOA dues and any special assessments. Flag features that could affect valuation.
Choosing the right lender in Scottsdale
Compare more than the rate. Prioritize lenders with a strong record in jumbo underwriting and local luxury appraisals. Ask about:
- Typical timelines for your target loan size.
- Average reserve expectations at your down payment level.
- Appraisal strategy for high-value or unique homes.
- Experience with second homes, seasonal use, or investor programs.
- Availability of portfolio, bank-statement, or asset-qualifying options if needed.
It can help to obtain quotes from a national direct lender, a local or regional bank with portfolio products, and a broker who accesses multiple investors.
Common hurdles to avoid
- Insufficient or undocumented reserves.
- Large, unexplained deposits in accounts used for closing funds.
- Condo or HOA red flags, such as pending litigation or low reserves.
- Appraisal value below contract price, which is more likely with very custom homes.
- New debts or recent credit inquiries during underwriting.
Ready to explore jumbo financing for a Scottsdale home with a clear, finance-first plan? Connect with Regina Alvarez for local guidance, a tailored lender game plan, and white-glove support from search to close.
FAQs
What counts as a jumbo loan in Scottsdale?
- Any first mortgage above the current FHFA conforming loan limit is a jumbo; as a reference, the 2024 baseline was $726,200 and Maricopa County was not a high-cost area, so confirm the current year’s limit with your lender.
How much down payment do I need for a jumbo?
- For a primary home, 10 to 20 percent down is common; for a second home, 20 to 30 percent is typical; for an investment property, 25 to 30 percent or more is often required.
What credit score is required for jumbo approval?
- Many lenders look for scores in the high 600s to low 700s, with the best pricing and smoother approvals at 720 or higher.
How long does a jumbo loan take to close in Scottsdale?
- With a complete file, many jumbo loans close in 30 to 45 days; unique properties or complex profiles can take 45 to 60 days or more due to appraisal and manual underwriting.
Are jumbo rates higher than conforming rates?
- Sometimes they are higher and sometimes lower, depending on investor demand, market rates, and your profile; compare full quotes, including points and fees, across several lenders.
What documents will my lender require for a jumbo?
- Expect two years of tax returns, W-2s, recent paystubs, 60 to 90 days of bank statements, and extra documentation if you are self-employed or using alternative-doc programs.
