A jumbo loan is a mortgage that exceeds the loan limits set by Fannie Mae and Freddie Mac, the two government-sponsored enterprises that purchase most U.S. mortgages. These agencies buy loans from lenders to increase liquidity in the housing market, but when a loan amount surpasses their limits, it is classified as a jumbo mortgage. These loans typically require higher credit scores and larger down payments due to their size and risk factors.
Below is a helpful summary of the conventional mortgage loan process. While individual circumstances can slightly change the order or requirements, this guide gives you a clear view of what to expect: