What Is a Jumbo Mortgage?
By CNBC | Posted Mar 13th 2013 12:00PM
Sometimes financial terms sound complicated and arcane; other times they sound exactly like what they are. That’s the case with a jumbo mortgage. CNBC explains:
What is a jumbo mortgage?
A jumbo mortgage is a home loan whose value is larger than that of a conventional mortgage. A conventional mortgage is one that can be purchased by government-sponsored entities Fannie Mae and Freddie Mac. These two entities set the maximum value of loans they will purchase.
At what value does a mortgage become jumbo?
The current maximum value for a conventional loan is generally $417,000, but after the housing crash the limit was raised in certain designated “high cost” areas. At first it was raised to $729,750; but then in October 2011, it was reduced to $625,500.
Posted on 03/13/2013 in mortgages
