Jumbo loans may be more practical for the average buyer
Large-balance mortgage loans – "jumbo" loans – are becoming less expensive than conforming loans. Traditionally, jumbo loans carried higher interest rates, but since mid-2013 that has been gradually changing, and they were less expensive than a conforming mortgage loan by an average of 33 basis points during the first quarter, according to CoreLogic, a real estate data firm. In response, jumbo loans have been growing, and their share of the mortgage market has reached its highest rate since 2009 – about 15 percent of home-purchase originations, CoreLogic reports. And in 2009, the jumbo share was just 6 percent. Jumbo loans are ones that exceed the high-balance conforming loan limit under Fannie Mae and Freddie Mac, which the Federal Housing Finance Agency set at $453,100 for most of the U.S. in 2018. In a few areas designated as high-cost, conforming loans stretch up as high as $679,650. CoreLogic researchers say one of the reasons that the jumbo-to-conforming ra