I’m explaining the difference between conventional and jumbo loans.
I receive this question all the time: What is a jumbo loan? Typically, across the country, there is a loan amount that will be considered a conventional loan if you stay below it, and if you exceed that amount, it will generally be considered a jumbo loan. The reason that’s important is that conventional loans have the most aggressive rates and easiest underwriting guidelines.
Once you get into a jumbo loan, things start to get a little harsher. Guidelines tighten, interest rates increase, turn times frequently increase, and you may even need a second appraisal. Here in Colorado, that loan limit is $510,400.
However, there is a nationwide, high-balanced proprietary program, where, regardless of your location in the country, your loan amount can actually go up to $765,000 and still be basically considered a conventional loan. This is crucial for some who may not get approved for jumbo loans. This could be an excellent option for some people, depending on the purchase price of the home. With this program, you can only put down 10% and not need private mortgage insurance (PMI).
I would be glad to go over the guidelines and rates with you, just reach out to me. If you just have any questions about types of loans or real estate in general, feel free to reach out to us as well. We would love to help you.