What Is a Jumbo Loan?
Another name for a jumbo mortgage is a non-conforming mortgage. This is a loan a lender makes you that doesn’t “conform” to the guidelines of Fannie Mae and Freddie Mac. Created by Congress in 1938 and 1970 respectively, Fannie Mae and Freddie Mac provide stability and affordability to the mortgage market by buying “conforming” mortgages from lenders, which gives lenders liquidity to make more mortgages.
Fannie Mae and Freddie Mac only buy mortgages meeting their guidelines for down payment, credit score, post-closing reserves, and loan amount.
In 2016, the conforming loan size limit for a one-unit home is $417,000 nationwide, with exceptions as high as $625,500 in certain high-priced markets. See the FHFA site here.
Loans greater than these limits are usually called jumbo mortgages, but can also be called non-conforming mortgages.
How It Works
Jumbo loan features
- Refinance or purchase up to $3,000,000, or do a cash-out refinance of up to $500,000 for your next big home project
- Credit scores as low as 700 may qualify
- Our VA jumbo loans give veterans added value – no money down for purchases and refinances up to 90% of your home’s value
How the jumbo loan works
- Any loan over the conventional loan limit ($424,100) is considered a jumbo loan
- Loan limits vary by county, and rates depend on where your property is located
- Your actual payment will vary based on your situation and the current interest rates when you apply
- Pay your mortgage at any time without pre-payment penalties