Jumbo vs Conventional Loans?
Jumbo and conventional mortgage loans are two types of home loans that differ in terms of loan amounts, eligibility requirements, and interest rates. Here's a brief overview of each:
Conventional mortgage loans: These are home loans that conform to the loan limits set by the Federal Housing Finance Agency (FHFA). In 2022, the loan limit for conventional mortgages is $647,200 for most counties in the United States. Conventional loans typically have more stringent eligibility requirements, such as a higher credit score and a lower debt-to-income ratio, than government-backed loans like FHA or VA loans. Interest rates for conventional loans may vary based on the borrower's creditworthiness and other factors.
Jumbo mortgage loans: These are home loans that exceed the loan limits set by the FHFA. In 2022, the jumbo loan limit is $970,800 for most counties in the United States. Jumbo loans often have more relaxed eligibility requirements than conventional loans, but they also typically have higher interest rates due to their larger loan amounts and increased risk for lenders.
Ultimately, whether you choose a conventional or jumbo mortgage loan depends on your financial situation and the cost of the home you're looking to purchase. If you're buying a more expensive property, you may need to consider a jumbo loan to finance the purchase. However, if your loan amount falls within the conventional loan limit and you meet the eligibility requirements, a conventional loan may be a more affordable option with lower interest rates. Contact our team at NW Alternative Mortgage to discover what lending options are best for you!