Definition of a Jumbo Mortgage
Jumbo mortgages are defined by a loan amount that exceeds the maximum amount that Fannie Mae and Freddie Mac will loan, otherwise called the conforming loan limit. Currently, the conforming loan limit is set at $417,000, so if you are looking to obtain a mortgage above that amount, you must either pay for anything over $417,000 in cash or obtain a jumbo mortgage.
Benefits of a Jumbo Mortgage
Jumbo mortgages have one main benefit and that is the ability to obtain conventional financing above the conforming loan limit of $453,100.
Other Jumbo Mortgage Considerations
Tighter Qualification Standards
Jumbo mortgages have more stringent qualification standards than most other mortgages because the lender is taking on more risk by loaning a higher balance. Additionally, because payments are higher, more income and lower debt-to-income ratios are also generally required.
Jumbo mortgages typically higher interest rates than other mortgages as well. This is further risk protection placed by the lender.
of the final loan amount
MAXIMUM LOAN AMOUNT