Jumbo Loans

What are Jumbo Loans?

Jumbo loans are conventional, non-conforming loans that are above the conforming loan limit set by Fannie Mae and Freddie Mac. Because these loans are not “backed” by Fannie, Freddie or any standard guidelines, the programs and rates can vary greatly from one lender to the next. Shortly following the mortgage meltdown of 2008, the Consumer Financial Protection Bureau (CFPB) came up with some general guidelines that lenders should follow on all loans and – fortunately – those guidelines are followed by most jumbo lenders. Because these loans involve lending larger amounts of money, most lenders like to go through a very through underwrite to minimize the financial risk. It’s important to note that jumbo loans often require higher down payments and better credit scores than their conforming counterparts. Jumbo loan interest rates are often slightly higher than Fannie Mae or Freddie Mac backed loans. Because there are so many moving parts and a greater risk involved, it’s important that the borrower takes the time to fully understand the loan and get pre-approved by a qualified loan officer to avoid any hiccups along the way. Mortgage Atlanta loan specialists welcome the opportunity to explain the benefits and potential pitfalls of a jumbo loan to help you decide if it’s the right fit for you.
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