A Jumbo Mortgage is a loan for an amount exceeding the statutory limit placed on the size of loans that Freddie Mac and Fannie Mae can purchase. These loans must be maintained in the lender's portfolio or sold to private investors rather than Fannie or Freddie. Often associated with the purchase of luxury homes, jumbo mortgages differ from conforming loans.
A nonconforming loan is a type of home mortgage loan that does not meet the standards of, or is too large to be purchased by, the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC). Due to this, the interest rates on these loans are typically higher.
