A Jumbo loan, or non-conforming mortgage, is a private loan that doesn’t conform to the guidelines set by Fannie Mae and Freddie Mac by exceeding the total loan limit for the area that you are buying in. You’ll need to check your specific location to see what the local limits are, or speak with a Loan Originator to find out if you need this special financing option.
If you need to borrow more than $453,100 (in most parts of the country), a jumbo loan can allow you to finance this non-conforming loan amount. While most borrowers will make a large down payment, you may be able to get a jumbo loan with as little as 5% down.
This type of loan is not secured by the federal government and can be much harder to qualify for than a conventional or FHA loan. You’ll need very good credit and money in the bank just to get approved, and you’ll likely still pay 0.5% - 1.% more in interest over a conventional loan. The more you can put down up front, the better interest rate you’ll be able to get.