What is a Jumbo Mortgage Anyway?
Even as a mortgage professional, I am sometimes overwhelmed by the number of different loan types available. FHA, VA, Conventional, Fannie Mae, Freddie Mac… All those words seem to run together and can become quite confusing. However, when you start browsing loans, one loan type is likely to jump out at you—and probably not in a good way.
The term jumbo loan just does not sound good, does it? It brings to mind huge payments, bloated interest, and overall scariness. However, it is important that every homebuyer understand what a jumbo loan is and is not—because this loan type may be more important to you than you think!
What is a Jumbo Loan?
According to Bankrate.com, the definition of a jumbo loan is: “A jumbo mortgage is a home loan with an amount that exceeds conforming loan limits imposed by Fannie Mae and Freddie Mac, the two government-sponsored enterprises that buy mortgages from lenders.”
So, quite simply the term jumbo loan refers to the amount borrowed on a home loan. It has nothing to do with what the payments on the loan are, or what the interest rate is. If it makes you feel better, you can call it a non-conforming loan—as it does not conform to the normal standards for home loans.
How Big is Jumbo?
It is important to realize that the term jumbo loan will be used differently in different housing markets. This makes sense because, for instance, an average home in the San Francisco, California market is much more expensive than the average home in the Cody, Wyoming market. That being said, the standard rate for a home loan being considered a jumbo loan is $417,000.
Jumbo Loans in Louisville, Kentucky
If you are purchasing a house and need to borrow more than $417,000 in the Louisville, Kentucky area, you will need a jumbo loan. The team at Liberty Financial would be happy to help you with the process. We have helped many buyers throughout the Louisville metro area obtain the perfect loan so they can purchase the home of their dream. Give us a call today and we can help you get started.