What Is a Jumbo Mortgage Loan?
Jumbo loans are also known as jumbo mortgages. Jumbo loans can be used as purchase loans, refinance loans or cash-out refinance loans. Eligible borrowers can apply for a jumbo mortgage with either a fixed or adjustable rate term. Overall, jumbo loans often have a slightly lower interest rate than other confirming loans, however, jumbo loans have stricter guidelines which typically include stringent income, credit and asset requirements for borrowers. There are jumbo loan program options available for both FHA and VA loan types because there are also conventional loans.
For most counties in the U.S., the conforming loan limit is $510,400. Government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac outline the financing amount that is considered a conforming loan. Jumbo mortgages are therefore non-confirming loans. Jumbo loans allow for mortgage financing which exceed the loan limits set by GSEs. Due to confirming loan limit restrictions, jumbo loans are not secured by the federal government.