Buying a North Shore home and not sure if your mortgage will be jumbo or conforming? You are not alone. On higher-priced Wilmette properties, the loan type you choose can change your rate, cash-to-close, and how quickly you get approved. In this guide, you will learn how conforming limits work in Cook County, what jumbo lenders expect, and practical strategies to structure your financing with confidence. Let’s dive in.

Conforming vs. jumbo explained

A conforming loan is a mortgage that meets Fannie Mae and Freddie Mac rules, including the dollar limits set each year by the Federal Housing Finance Agency (FHFA). Because lenders can sell these loans to the agencies, they tend to carry more standardized terms and competitive pricing.

A jumbo loan is any mortgage amount above the conforming limit for the property’s county. Jumbos are not eligible for sale to Fannie or Freddie. Lenders often hold them in portfolio or sell them into different investor channels, which can change pricing and underwriting.

What counts as jumbo in Cook County

The FHFA sets a national baseline conforming limit each year and publishes a county-by-county table. Some high-cost counties receive higher limits. Cook County, where Wilmette sits, generally follows the baseline rather than a high-cost adjustment. Still, limits change annually, so always check the FHFA county lookup and confirm the current year before you write an offer.

If you are looking in nearby Lake County, follow the same process. County limits can differ from year to year, and your loan type is based on the county where the property is located.

Why the limit matters for Wilmette buyers

Where your first mortgage lands relative to the county limit can influence your rate, down payment, and documentation. Keeping the first mortgage at or below the limit can open up conforming pricing and more program options. If you exceed the limit, you will likely need a jumbo, which can mean higher reserve requirements and a tighter approval.

What jumbo lenders look for

Credit score

• Conforming loans typically accept a wide range of scores and price best with scores of 700 or higher.
• Jumbo loans usually expect stronger credit. Many lenders target 700 to 740 or above for best pricing, with some flexibility case by case.

Down payment and LTV

• Conforming purchases can go as high as 95 to 97 percent loan-to-value for eligible borrowers and programs. Many buyers choose 80 to 95 percent LTV depending on private mortgage insurance.
• Jumbo lenders often set maximum LTV at 80 to 90 percent. Some allow higher LTVs for top-tier borrowers but may require higher rates or large reserves.

Cash reserves

• Conforming loans sometimes require a few months of reserves depending on the file.
• Jumbo loans often require more, commonly 6 to 12 months of principal, interest, taxes, and insurance. Higher LTVs or complex profiles can push this higher.

Debt-to-income ratio

• Conforming approvals often allow DTIs up to roughly the mid-40s and sometimes 50 percent with compensating factors.
• Jumbo programs typically set lower caps around 43 to 45 percent, with exceptions for exceptionally strong files.

Documentation and assets

Jumbo underwriting is usually more detailed. Expect full tax returns, pay stubs, W-2s or K-1s, bank and retirement statements, and verification of large deposits. Self-employed buyers and those using bonus or RSU income should plan for extra documentation.

Mortgage insurance

• Conforming loans above 80 percent LTV usually require private mortgage insurance.
• Jumbos rarely use PMI. Instead, lenders may price the loan to reflect the risk or suggest a second mortgage to split the financing.

Rates: how jumbo pricing compares

Historically, jumbo rates carried a small premium over comparable conforming loans. In some markets, big banks price jumbos very competitively, and the spread can be minimal. The difference can range from a few basis points to several tenths of a percent and varies by credit score, LTV, loan product, and the lender’s appetite to hold loans in portfolio.

The best way to know where you stand is to request live quotes from more than one lender. Compare a conforming option against a jumbo option for the same property and see how the full cost and monthly payment stack up.

Smart strategies for North Shore price points

The right structure can keep your costs down and your approval smooth. Here are practical approaches that often work well for Wilmette buyers.

Strategy A: Keep the first mortgage conforming

If your target price is near the county limit, adjust the down payment so the first mortgage stays at or below the conforming cutoff. This can unlock better pricing and simpler underwriting.

• Illustrative example: Home price $900,000. If the 1-unit conforming limit were $766,550, you would need a down payment of $133,450 to keep the first at $766,550 or below. That is roughly 14.8 percent down. Always verify the current Cook County limit before using these figures.

Strategy B: Use an 80-10-10 piggyback

Split the financing between a first mortgage at 80 percent, a second mortgage or HELOC at 10 percent, and 10 percent down. This can avoid PMI and keep the first mortgage conforming.

• Illustrative example: $900,000 purchase. First at 80 percent is $720,000, second at 10 percent is $90,000, and the down payment is $90,000. Confirm that $720,000 sits within the current conforming limit for Cook County.

Pros: avoids PMI, can lower the first-mortgage rate. Cons: second-lien rates are often higher, terms can change over time, and the structure adds complexity.

Strategy C: Conforming first plus HELOC second

Pair a conforming first mortgage with a HELOC to cover part of the purchase. This can be useful when you expect bonuses, equity events, or sale proceeds to pay down the HELOC later. It keeps your primary mortgage in the conforming market.

Strategy D: Explore portfolio lenders and community banks

Local banks and credit unions that hold loans in portfolio can be flexible with reserves, DTI, or cash-flow analysis. On Wilmette properties, a community lender may offer a competitive jumbo solution when national pricing is tight.

Strategy E: Consider ARMs or interest-only options

Adjustable-rate mortgages, like 5-year or 7-year terms, often start with lower rates than 30-year fixed loans. Interest-only options can further reduce the initial payment. These tools work best if you plan a refinance or sale within the fixed period and understand reset risk.

Strategy F: Bridge financing for move-up buyers

If you need the equity from your current home to buy in Wilmette, a short-term bridge loan can help you close first and sell after. These loans cost more than traditional financing, so weigh the speed and certainty against the extra interest and fees.

Strategy G: Time your approval around FHFA updates

The FHFA announces new limits late each year, with changes typically effective January 1. If your home price is close to the cutoff, a new limit can change your loan type. Ask your lender how they apply the updated limit at funding and whether you should update your pre-approval as limits change.

When a jumbo is unavoidable

On higher-priced Wilmette homes, a jumbo may be required even with a large down payment.

• Illustrative example: $1,200,000 price with 20 percent down is a $960,000 first mortgage. That amount will exceed most baseline conforming limits, so you should plan on jumbo underwriting and reserves.

If a jumbo is your best path, focus on strengthening your file: shore up credit, increase verified reserves, and compare at least two lenders so you can choose between the best rate and the most flexible approval.

Step-by-step game plan

1. Confirm county limits

• Check the FHFA county lookup for Cook County or Lake County and note the effective date. Keep a screenshot or PDF for your file.

2. Get a real pre-approval

• Request full pre-approval, not a quick pre-qualification. If you may need a jumbo, get quotes from a large bank and a local portfolio lender and compare.

3. Organize documents

• Gather two years of tax returns, recent pay stubs and W-2s, two months of bank and retirement statements, and documentation for large deposits. If self-employed, include business returns and a year-to-date P&L if requested.

4. Choose your structure early

• Decide whether you will pursue conforming-plus-second, an 80-10-10 piggyback, a pure jumbo, or an ARM. Match the structure to your cash, time horizon, and risk comfort.

5. Price the full payment

• Compare the total monthly cost, including principal, interest, taxes, insurance, and any second-lien payment. Ask lenders for payment scenarios across rate and term options.

6. Ask the right underwriting questions

• What are the reserve requirements? What is the max LTV and DTI? Do they sell or keep the loan? How do they handle vested RSUs, bonus income, or rental offsets?

7. Watch the calendar

• If limits are rising and you plan to fund after they take effect, confirm that your lender will underwrite to the new limit and update your pre-approval letter.

Common pitfalls to avoid

• Not verifying the current county limit before you make an offer.
• Relying on a pre-qualification instead of a full pre-approval.
• Underestimating reserve requirements for a jumbo.
• Ignoring second-lien costs when using an 80-10-10 or HELOC.
• Choosing an ARM without a clear refinance or sale plan before the rate adjusts.

Work with a local advisor who knows the numbers

On the North Shore, winning the house often comes down to clean financing and confidence in your numbers. You deserve advice that blends lifestyle fit with technical expertise. Our team brings hands-on construction insight and data-driven guidance to help you choose the smartest loan structure, write stronger offers, and negotiate with clarity.

Ready to map out your Wilmette purchase strategy or compare jumbo versus conforming options? Reach out to Matt Brugioni & Susan Duffey for a personalized consultation.

FAQs

What is the current conforming loan limit in Cook County?

• The FHFA sets this annually. Cook County often follows the national baseline, but you should check the current FHFA county lookup and confirm the effective date with your lender.

Do jumbo loans always cost more than conforming?

• Not always. The spread can range from a few basis points to several tenths of a percent and depends on your profile and the lender. Get live quotes from multiple lenders.

Can I avoid PMI on a high-priced Wilmette home?

• Yes. Options include a larger down payment, an 80-10-10 piggyback, or a conforming first plus a HELOC. Each reduces or removes PMI but comes with trade-offs.

How many months of reserves will I need for a jumbo?

• Many jumbo programs require 6 to 12 months of principal, interest, taxes, and insurance. Exact requirements vary by lender, LTV, property type, and credit strength.

Is an ARM a smart choice for a jumbo?

• It can be if you expect to refinance or sell within the fixed period. ARMs often start with lower rates, but you should plan for possible increases after the initial term.

Should I time my purchase around FHFA limit updates?

• If your price is near the cutoff, timing can help. New limits typically take effect January 1. Ask your lender how they apply upcoming limits at underwriting and funding.