Definition of Jumbo loan:
The value of a jumbo mortgage varies by state—and even county. The FHFA sets the conforming loan limit size for different areas on an annual basis, though it changes infrequently. As of 2019, the limit was set at $484,350 for most of the country. That was increased from $453,100 in 2018. For counties that have higher home values, the baseline limit is set at $726,525, or 150% of $484,350.
A type of mortgage that exceeds the required limits set by Fannie Mae and Freddie Mac. Jumbo loans must be maintained in the lenders portfolio or be sold to private investors.
A jumbo loan, also known as a jumbo mortgage, is a type of financing that exceeds the limits set by the Federal Housing Finance Agency (FHFA). Unlike conventional mortgages, a jumbo loan is not eligible to be purchased, guaranteed, or securitized by Fannie Mae or Freddie Mac. Designed to finance luxury properties and homes in highly competitive local real estate markets, jumbo mortgages come with unique underwriting requirements and tax implications. These kinds of mortgages have gained traction as the housing market continues to recover following the Great Recession.
How to use Jumbo loan in a sentence?
- The average APR for a jumbo mortgage is often par with conventional mortgages, while down payments are roughly 10% to 15% of the total purchase price.
- A jumbo loan is a type of financing that exceeds the limits set by the Federal Housing Finance Agency and cannot be purchased, guaranteed, or securitized by Fannie Mae or Freddie Mac.
- Homeowners must undergo more rigorous credit requirements than those applying for a conventional loan.
- Approval requires a stellar credit score and a very low debt-to-income ratio. .
Meaning of Jumbo loan & Jumbo loan Definition