What They are
Jumbo loans are one example of a conventional loan that does not meet Fannie Mae or Freddie Mac guidelines. A jumbo loan is a loan that exceeds the maximum price of $417,000 for a first mortgage. The average interest rates on jumbo mortgages are typically higher than those for conforming mortgages as they generally are considered higher risk due to the larger amount of money that is being borrowed.
The Details are Important
Loan to value ratios are often overlooked by home buyers. For most, the interest rate and loan term are the more important items. However, the loan to value ratio is a key factor in your application. Loan to value ratios vary depending on the type of property you are looking to purchase.