What is the difference between a Conforming and a Jumbo Loan?
Conforming refers to loans up to a federally set limit of (currently) $275,000. Loans above that amount are considered Jumbo loans. For most people, the amount of the loan they are seeking is already determined by the amount of down-payment they can afford and the sales price of the home (or existing loan balance in the case of a refinance). Those borrowers whose proposed loan amount is near this $275,000 limit, or those who have significant flexibility in determining their down-payment, should consider keeping their loan balance below this limit so that they may secure a Conforming loan. Conforming loans are most often (though not for all lenders) offered at lower rates than their Jumbo counterparts.
