Resources > Glossary > Jumbo Loan

Glossary of Notary Public, Mortgage, Signing Agent, and Loan Signing Terms.

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Common Terms 1   Common Terms 2

Jumbo Loan

Function: noun

Definition 1:
A loan which is larger than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans cannot be funded by these two agencies, they usually carry an interest rate that could be .25 to .50% higher. A loan of more than $650,000 is referred to as a super jumbo mortgage. Jumbo loans are higher risk than other loans due to the fact that if the borrower defaults, its harder to sell a luxury residence quickly for full price. A jumbo loan is an example of a non-conforming loan. Jumbo loans also generally require a higher down payment since they are considered to be a riskier type of loan.