Just like it sounds, a jumbo loan is just bigger. A loan is considered jumbo if it exceeds the conforming high-balance loan limits set by Fannie Mae and Freddie Mac. The current conforming loan limit for a single-family home is $417,000 in Illinois.
Jumbo mortgage loans are considered higher risk for lenders due to their larger size. The idea is that if a jumbo mortgage loan defaults, it may be harder to sell a luxury home quickly for full price.
It’s a big deal because it is literally a bigger deal.
Lenders may require a higher down payment from a jumbo loan borrower. Many lenders may require two appraisals on a jumbo mortgage loan.
If you have any questions on jumbo loans, just give us a call at 312.642.7979.