The Quick Read: A signed contract on your old home helps, but a signature alone rarely removes the old mortgage payment from your ratios. Many lenders look to the agency approach: they want the fully executed contract plus proof that the buyer’s contingencies, especially financing, are cleared. Each jumbo investor sets its own rules, so the exact treatment depends on the program and the file. If the old payment stays in, you are qualifying on two housing payments at once.
What Makes a Loan “Jumbo” in the First Place?
A loan is jumbo when the loan amount, not the purchase price, sits above the conforming limit for the county. The FHFA Conforming Loan Limit FAQs define that limit as the highest amount Fannie Mae or Freddie Mac can acquire, and mortgages above it are known as jumbo loans.
Jumbo payment estimate
The starting figures are an example price in the jumbo range with ten percent down on a thirty-year fixed. Replace them with yours.
Editable benchmark: 7.40% as of October 15, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a jumbo loan quote.
Illustrative starting assumptions: a $1,000,000 price in the jumbo range, ten percent down on the top-leverage lane, a thirty-year fixed structure at the current Freddie Mac conforming benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conforming benchmark, a market reference and not a jumbo loan quote; jumbo rates are set by the lender and the lane at lock and differ from the conforming benchmark. An adjustable-rate scenario is shown at the benchmark for the whole term; the rate after the initial period is unknown. Reserve months and appraisal counts follow the lane sheet for the amount band; the automated finding may require more. Taxes, insurance and dues are editable estimates; closing costs are not included. On most lanes the conforming limit for the county decides whether a loan is jumbo at all; two lanes start at a stated dollar floor instead. Licensed in sixteen states for consumer mortgages.
The limit is set county by county. A loan can be conforming in a high-cost county and jumbo in a lower-cost one, even when the house price is the same. Check your own county on FHFA’s site before you assume which side of the line you are on.
Because neither company buys a jumbo loan, the lender or investor writes its own guidelines. That matters for this topic. The pending-sale rules most people quote come from the agencies, and a jumbo lender may borrow them, tighten them, or set something different.
Lendmire’s jumbo loan programs are arranged through wholesale lenders. Across the programs the brokerage places files with, the headline lane takes a 660 decision score, leverage to 90%, and loan amounts up to $5,000,000. Several lanes reach 89.99% combined LTV, and the rest stop at 80%. The ratio ceiling is 50% on the fixed lanes, 45% on the adjustable lanes, and 43% on the interest-only lanes. Every figure is subject to lender guidelines and full file review, and none of it is a commitment to lend.
Key Terms Defined
PITIA: Principal, interest, taxes, insurance and association dues. It is the full housing payment, not just the mortgage bill.
Debt-to-income ratio (DTI): Your monthly debts divided by your monthly income. It is the number most affected by carrying two homes.
Contingency: A condition in a sales contract that must be met before the sale is firm. The buyer’s financing and inspection are common ones.
Reserves: Liquid assets left after the down payment and closing costs, measured in months of the full payment.
Pending sale: An old home under a signed contract that has not yet closed.
How Does a Lender Count Two Houses?
By default, the lender counts both. If your old home will not close before the new purchase, the underwriter adds the old PITIA to the new proposed PITIA. Your ratio then reflects two housing payments.
The Fannie Mae Selling Guide B3-6-06 spells out the agency version. When the current residence is pending sale but will not close before the new purchase, both payments are used in qualifying. The exception: Fannie Mae will not require the old PITIA if the lender holds the executed sales contract and confirmation that any financing contingencies have been cleared.
Freddie Mac’s Guide section 5401.2 is similar. The payment on the property pending sale may be excluded from the ratio when the file holds an executed contract. If that contract has a financing contingency, the file must show it has cleared, or include a lender’s commitment to the buyer.
Two things stand out. A contract alone is not enough, and the “clearing” is about the other side of the deal, not yours. Your buyer’s loan approval is part of your qualification.
Listed, Under Contract, or Closed: What Each Stage Means
Each stage of the old sale changes what the underwriter wants to see. The table below summarizes the typical pattern, built from the agency approach and the way wholesale jumbo lenders usually treat a file. Individual investors differ.
| Stage of old home | What the lender wants | Old payment likely counted? |
|---|---|---|
| Listed, no contract | Proof you can carry both | Yes |
| Contract, contingencies open | Executed contract, status of each contingency | Usually yes |
| Contract, contingencies cleared | Executed contract plus clearance evidence | Often excluded |
| Sold and closed | Settlement statement | No, proceeds verified |
A listing does not change the picture. Neither does a verbal offer. The lender is looking for paper that shows the sale is firm.
What Makes a Contract “Firm” Enough?
A firm contract is fully signed by both sides, with the buyer’s contingencies cleared. The financing contingency gets the most attention because it is the one most likely to fall apart late.
Practical items a lender may ask for:
- the fully executed sales contract and any addenda;
- written evidence that the financing, appraisal and inspection contingencies are cleared;
- for a Freddie Mac-style file, a commitment from the buyer’s lender can stand in for clearance;
- confirmation that the contract is still in force as closing approaches.
The addenda matter. A contract can look clean on page one and carry an amendment that reopens a contingency. Read yours before you send it.
Step by Step: Qualifying With the Old Home Pending
Here is the sequence a typical file follows.
1. Confirm the loan is jumbo. Compare your loan amount with the county limit.
2. Run both scenarios. Ask your loan officer to show the ratio with the old payment counted and with it excluded. If it only works excluded, you know how much rides on the contract.
3. Document the old sale. Gather the executed contract and clearance evidence.
4. Line up assets and reserves. Down payment and closing costs may have to come from savings, since sale proceeds arrive later.
5. Appraise the new home. Above a lane’s threshold amount, two appraisals are required. The old home generally needs only the contract.
6. Recheck before closing. Expect the lender to confirm the old contract is still in force. You will also get the Closing Disclosure at least three business days before you close, per the CFPB.
That Closing Disclosure is where a delayed old sale shows up. Its cash-to-close figure tells you how much you must bring on your own.
Reserves and Down Payment: Where Does the Cash Come From?
Reserves are the piece many sellers underestimate. In the wholesale programs this brokerage works with, reserves are measured in months of the full payment and rise with the loan amount. Larger loans ask for more.
If the old payment stays in your ratio, the lender is also testing whether you can close without leaning on proceeds you do not yet have. Fannie Mae’s guidance on anticipated sales proceeds says a lender may qualify a borrower on anticipated proceeds for a listed but unsold home, but must document the actual proceeds received. That page is older, so treat it as a general principle, not a jumbo rule.
Watch for double-counting. The same dollars cannot be your down payment and your reserves. If the sale proceeds will fund the down payment, they are spoken for.
Worked Example Without Dollar Figures
Picture a household buying a new home with a jumbo loan at 80% of the price. Their old home is under contract, and they still owe a mortgage on it.
With the old payment counted, their total housing payments take a large share of income. The ratio lands near the lane’s ceiling, or above it. With the old payment excluded, the ratio drops to a comfortable level.
Now the buyer’s financing contingency clears and the paperwork shows it. The old payment comes out and the file works. If instead that contingency is still open, the lender keeps both payments in, and the same borrower may need a smaller loan, a larger down payment, or a later closing.
Same contract, same borrower, different outcome. The difference is a single piece of paper.
Where the General Rule Breaks
The agency framework is a starting point, and these cases bend it.
Contingency not cleared. Under both agency guides the old payment stays in the ratio. Freddie Mac’s alternative is a commitment from the buyer’s lender.
Sale closes first. If the old home closes before your purchase, the pending-sale rule is moot. Proceeds are verified from the settlement statement.
Bridge or swing loan. Fannie Mae treats a bridge loan as a contingent liability counted in the ratio, per B3-6-05. It waives that if the file has an executed contract and cleared contingencies.
Employer relocation buyout. Freddie Mac has allowed an unexecuted buyout agreement to exclude the old payment when its requirements are met, per Bulletin 2019-17. It is an older bulletin, so confirm it is current before relying on it.
Keeping the old home. If you plan to keep it as a rental or second home, the pending-sale exception does not apply. Occupancy decides the leverage in the jumbo lanes, and that is a separate conversation.
Jumbo overlays. Some investors honor the agency exception. Others want more reserves, or want the old sale closed first. There is no uniform rule, and it is worth asking before you write an offer.
What If the Sale Falls Through?
If the old buyer’s financing collapses after the old payment was excluded, you are carrying two homes. The lender may re-review the file, and the old payment can return to the ratio.
That risk is real and it is yours. A few ways to protect yourself:
- keep reserves beyond the minimum, not just at it;
- confirm in writing how the lender will treat a failed sale before you commit;
- avoid stretching the ratio so far that a collapsed sale breaks your budget.
If the numbers only work when the sale closes on schedule, that is a signal to reconsider the timeline. It is not a reason to hope harder.
Does the Old Home’s Mortgage Always Hurt?
Not always, and not forever. A temporary spike in ratio is the cost of buying first. If the old sale is firm and clears, that cost may never reach your file. If it does reach the file, a smaller loan, more down payment, or a later closing date can bring the numbers back into range.
Selling first is the cleanest for qualifying, because the old payment is gone and proceeds are verified. The tradeoff is timing: you may need temporary housing. Buying first gives you the new home but leaves you exposed to the old one. Neither is wrong. The right answer depends on how much cushion the household holds.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Documents to Gather
Have these ready early:
- the executed sales contract with all addenda;
- evidence that contingencies are cleared;
- the current mortgage statement on the old home;
- statements for the accounts funding your down payment and reserves;
- the listing agreement and, later, the settlement statement.
A tidy file moves through review with fewer questions. That is the point of gathering it before the lender asks.
Questions to Ask Your Loan Officer
- Does this investor honor the pending-sale exception, or set its own rule?
- Which contingencies must be cleared, and what proof counts?
- How many months of reserves apply at my loan amount?
- If the old sale fails, what happens to my approval?
- Can I see the ratio both ways before I make an offer?
For a closer look at how a signed contract changes the picture, see Lendmire’s piece Can You Get a Jumbo Loan Once Your Old Home Is Under Contract?.
Frequently Asked Questions
Does a signed contract on my old home remove the old mortgage from my ratio?
Not by itself. The agency guides want the executed contract and proof that the buyer’s contingencies, financing in particular, are cleared. Freddie Mac also accepts a commitment from the buyer’s lender. A jumbo investor may set its own version.
Can a jumbo lender use sale proceeds I haven’t received yet?
Sometimes a lender may qualify you on anticipated proceeds, but the actual proceeds must be documented. You should not plan on unreceived funds as your only source for the down payment or reserves.
Is a jumbo loan defined by the purchase price?
No. It is defined by the loan amount against your county’s conforming limit. A larger down payment can bring a loan under the limit, and the same price can be jumbo in one county and conforming in another.
What if I want to keep the old home?
The pending-sale exception does not apply to a home you keep. Occupancy then decides the leverage and the rules, and the old payment stays in your ratio.
Will the lender look at more than the ratio?
Yes. Lenders must make a documented ability-to-repay determination, and credit scores, reserves and residual income all matter. For jumbo loans that means the lender’s own underwriting, not an agency shortcut.
If you are buying a home and want to see whether a jumbo loan fits your file, Lendmire can help you compare the options and what each one asks of the file.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Lendmire arranges FHA, VA, conventional and jumbo purchase and refinance loans through wholesale lenders; every file is underwritten by the lender under the applicable program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. FHFA Conforming Loan Limit FAQs
2. Fannie Mae Selling Guide B3-6-06
4. CFPB: What is a Closing Disclosure?
5. Fannie Mae Selling Guide B3-4.3-10
6. Fannie Mae Selling Guide B3-6-05
This article is part of Lendmire’s jumbo loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Qualify for a Jumbo Loan on a Condo or Co-Op With Less Down · Can You Get a Jumbo Loan on a Second Home With Little Income? · How to Qualify for a Jumbo Loan While You Still Own the Old Home
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.