Jumbo loan
A mortgage larger than the conforming loan limit for the area, so it cannot be sold to Fannie Mae or Freddie Mac. Lenders often require higher credit scores, larger down payments and more reserves.
Also called: jumbo mortgage, non-conforming loan, jumbo
Related terms
A conventional loan that meets Fannie Mae and Freddie Mac guidelines, including a maximum loan size set each year by the FHFA. The limit is higher in high-cost counties. Loans above it are jumbo loans.
A mortgage not insured or guaranteed by a government agency such as FHA, VA or USDA. Most follow Fannie Mae and Freddie Mac rules and require private mortgage insurance when the down payment is under 20%.
Savings left over after closing, often measured in months of mortgage payments. Lenders may require reserves for jumbo, investment and multi-unit loans to show you can handle a setback.
The part of the purchase price you pay in cash rather than borrow. A larger down payment lowers the loan amount and can remove the need for mortgage insurance on a conventional loan.
A number, usually from 300 to 850, that summarizes how you have handled debt. Lenders use it to decide whether to approve a loan and what rate and mortgage insurance cost to charge.