Jumbo Loans

A jumbo loan is a mortgage that is used to pay for homes that are too expensive for a regular loan. The Federal Housing Finance Agency says that the most a conforming loan can be for is $548,250 in most counties (FHFA). A jumbo loan is needed for homes that cost more than the local conforming loan limit.

Jumbo loans, which are also called non-conforming conventional mortgages, are riskier for the jumbo loan lenders because Fannie and Freddie can't back them. This means that if a borrower defaults, the lender could lose money. Most of the time, you can get a best rate jumbo loan with either a fixed interest rate or an adjustable interest rate, and the terms can vary.