Definition
A jumbo loan is a conventional loan that exceeds the loan limits set by government-sponsored enterprises. It's used for high-cost properties where the loan amount is larger than what a standard mortgage can cover.
Understanding Jumbo Loans
A jumbo loan appears in the mortgage process when a home buyer is purchasing a high-priced property. It works like a regular mortgage but is used for amounts that exceed local conforming loan limits. These loans often require a higher credit score and a larger down payment. It's not just for luxury homes; it's for any property that exceeds the standard limits in your area. Remember, jumbo loans don't guarantee better interest rates or easier approval compared to regular loans.
