3 Common Risks of Super Jumbo Loans

A super hard money jumbo loan is a type of loan that is used to buy large and pricey properties. The super hard money jumbo loans can also be used as a refinance. It is a type of loan that mostly amounts to at least $650,000.

last updated Friday, April 11, 2025
#Loan to Loan Ratio #Interest Rates

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by John Burson

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What are super hard money jumbo loans?

A super hard money jumbo loan is a type of loan that is used to buy large and pricey properties. The super hard money jumbo loans can also be used as a refinance. This type of loan mostly amounts to at least $650,000. This exact type is not as strictly regulated as in conventional hard money jumbo loans. 

The super jumbo loan is considered non-conforming and doesn’t have the standard government guidelines due to its large size. The hard money jumbo loan lenders have strict requirements to be met before they approve a loan this big. If you are funding an amount that falls into the classification of the super jumbo loan, you will probably need a substantial down payment, a long employment history, and a good credit score. Depending on your profile, The lender will grant you the super jumbo loan.

This type of loan carries a significant risk to both the lender and the borrower. You will have to get credit standards stricter than the traditional loan. The chances are as follows.

Locating a lender

Very few financiers are willing to work with clients who need this type of hard money jumbo loan. Parting with millions of dollars for just a piece of a residential luxury property is sometimes difficult for lenders. Therefore, it will be hard to get competitive interest rates. In most scenarios, you must work with a private investor to secure the funds.

Low Loan to Loan ratios

Working with a smaller loan-to-loan ratio is another risk of the super hard money jumbo loans. You will have to put up a significant amount of money to pay for the property. You will lose a substantial sum of money that you would have used to buy a home with a traditional loan if you can’t afford to make the payments on the house.

Interest rates

Hard money jumbo loan borrowers rarely focus on the interest rates. Most lenders charge one to two percent more than the standard hard money jumbo loan rates. The interest rates can be higher. This will depend on the amount of your hard money jumbo loans and the loan-to-loan value ratio. Because interest rates can be higher, many borrowers choose to get two different hard money jumbo loans to separate the amount they are borrowing, hence avoiding the high-interest rates.

 
 
 

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