Jumbo loan
A conventional loan larger than the conforming loan limit set by Fannie Mae and Freddie Mac. Usually needs a bigger down payment and stronger credit than a conforming loan.
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See how it worksWhere this comes up: on the market
Part 1 of 4
Why a seller cares
A buyer of a higher-priced home may need a jumbo loan, which usually means a larger down payment, tighter underwriting and a longer timeline. Their financing contingency deserves a longer window and a closer read.
Part 2 of 4
A simple example
Your home is under contract at $950,000. The buyer's loan is above the conforming limit, so it is a jumbo with 20% down and forty days to close.
| The jumbo loan | What it tends to mean |
|---|---|
| Underwriting | More documents, sometimes two appraisals, more time |
| Down payment | Usually 10% to 20% or more |
| The financing contingency | Often longer than the 21 days a conforming loan needs |
Jumbo loans are ordinary loans with more scrutiny and more days.
Part 3 of 4
What people get wrong
That jumbo buyers are riskier. They tend to be better qualified; what is bigger is the paperwork and the wait.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
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