Jumbo
A jumbo loan is a mortgage that exceeds the conforming loan limits set by Fannie Mae and Freddie Mac. Loans above these limits are considered jumbo loans and are not backed by Fannie Mae or Freddie Mac, meaning they have different lending requirements.
Benefits of a Jumbo Loan:
Higher Loan Amounts – Jumbo loans allow borrowers to finance more expensive properties without needing multiple smaller loans.
Competitive Interest Rates – Despite being non-conforming, many lenders offer competitive interest rates on jumbo loans, often similar to conventional loan rates for well-qualified borrowers.
No Private Mortgage Insurance (PMI) Required – Unlike conventional loans, many jumbo loans do not require PMI, even with a down payment below 20%.
Flexible Loan Options – Borrowers can choose from fixed-rate or adjustable-rate (ARM) jumbo loans, allowing for tailored financing solutions.
Luxury & High-Value Property Financing – Jumbo loans make it possible to purchase luxury homes, investment properties, and multi-unit residences that exceed standard loan limits.
Refinancing Available – Homeowners can refinance existing jumbo loans to secure lower interest rates or better terms.
Customizable Loan Terms – Some lenders offer flexible repayment terms, such as 10-, 15-, 20-, or 30-year loans, depending on the borrower's needs.