Jumbo

Jumbo loans are loan amounts that are above the conforming loan limit in the area. In the San Francisco Bay area, where home prices are high, the maximum conforming loan limit for a single family home is $729,750.

All real estate financing is risk-based. If the lender perceives a greater risk on a loan, then the borrower must meet more stringent guidelines and pay a higher interest rate. Larger loans mean more money is at risk.

Loans above the conforming loan amount may require a larger down payment, such as 25% or more, and the interest rate will be higher. In some cases, the debt-to-income ratio allowed will be lower. Excellent credit is a must for Jumbo financing.