What is a jumbo mortgage loan?


Quick Answer

A jumbo mortgage is any home loan that exceeds the current conforming financing limits set forth by Fannie Mae or Freddie Mac, according to Bankrate. The current conforming loan amount across most of the United States is $417,000 as of 2015, explains Fannie Mae.

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Full Answer

Jumbo mortgages allow borrowers to finance purchase or refinance transactions that fall under the category of “non-conforming”. Typically, borrowers use non-conforming jumbo mortgages to buy new homes or refinance existing mortgages on homes with values that exceed $417,000. Fannie Mae and Freddie Mac set the guidelines for banks and mortgage lenders who offer financing to borrowers of jumbo mortgages. Interest rates and fees are usually higher for jumbo mortgages, explains Bankrate.

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