What is the difference between a conforming and a non-conforming (a.k.a. jumbo) mortgage?
A conforming mortgage is one that does not exceed the maximum mortgage limit of the two primary GSE’s (Government Sponsored Enterprises), Fannie Mae and Freddie Mac. The current conforming maximums are: $417,000 for a 1 unit property, $533,000 for a 2 unit property, $645,300 for a 3 unit property and $801,950 for a 4 unit property. These maximums apply to all states except Alaska and Hawaii. Therefore a jumbo mortgage is one that has a mortgage amount exceeding these limits. The interest rates on jumbo mortgages are typically between 1/4 – 5/8% higher than on conforming mortgages.
A conforming mortgage is one that does not exceed the maximum mortgage limit of the two primary GSE’s (Government Sponsored Enterprises), Fannie Mae and Freddie Mac. The current conforming maximums are: $333,700 for a 1 unit property, $427,150 for a 2 unit property, $516,300 for a 3 unit property and $641,650 for a 4 unit property. These maximums apply to all states except Alaska and Hawaii. Therefore a jumbo mortgage is one that has a mortgage amount exceeding the aforementioned limits. The interest rates on jumbo mortgages are typically between 1/4-5/8% higher than on conforming mortgages.
