If you are in the market for a luxury home and need mortgage financing, a jumbo loan may be your best option. Jumbo loans exceed the lending limits set by Fannie Mae, Freddie Mac and the Federal Housing Finance Agency.
For most of the country in 2019, the maximum conforming loan amount is $484,350, although there are higher limits up to $726,525 in some U.S. counties. These loan limits, also known as conforming loan limits, are adjusted yearly to reflect changes in the average prices of homes.
Jumbo loans may be referred to as nonconforming loans because they don’t fall under the guidelines set by Fannie Mae and Freddie Mac for loan approval. Qualifying requirements and interest rates vary widely by lender, making it important to understand how they work before you start to compare jumbo rate offers.